The Marine Retailers Association of America is urging its members to contact the White House in support of extending loans usually reserved for small businesses to dealers, making it easier for them to borrow money to acquire new and used boats.
The MRAA met this week with the National Association of Guaranteed Government Loans, which administers the SBA 7(a) loan program for floorplan financing, to discuss the need for federal assistance for boat dealer floorplanning.
The meeting occurred immediately after a special meeting the Small Business Administration had in the White House to present its plan for expansion of the 7(a) loan program to floorplanning at boat, car, and RV dealerships. The White House Office of Management and Budget is now considering the SBA proposal, the MRAA says.
Under the proposal to free up these funds, the SBA is proposing a pilot program of $1.6 billion. Current law limits 7(a) loans to $2 million per business. This is enough money for 8,000 floorplan loans at the maximum loan value. The final financial terms of the proposal are still being discussed, but it is anticipated the SBA would require dealers to collateralize the loans with 10 percent of the loan for new boats and 20 percent for used boats.
Dealers may also have to pledge personal assets, but most of the financial terms are dependent on individual banking requirements.
It is anticipated OMB will review the SBA proposal and issue its decision as early as Friday, with an effective date projected between May 17 and June 1, according to the MRAA.
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