The Small Business Administration's revamped Dealer Floor Plan Program is much improved and has more support among the lending community, SBA program specialist Patrick Kelley said during a webinar Wednesday.
Representatives of the SBA and the National Marine Manufacturers Association hosted the webinar to explain new details of the program and answer questions.
"We think we have something in place that's not going to deter large lenders from participating," Kelley said. "[The revised program] is something that there's significant interest in."
The new program, which will continue until Sept. 30, 2013, raises loan caps from $2 million to $5 million and provides a loan guarantee of 75 percent on floorplan lines of credit with a 100 percent advance rate.
The increase from $2 million to $5 million makes the program much more attractive to larger lenders, Kelley explained. Larger lenders "wouldn't play" under the $2 million cap, he said, but the increase "makes this a viable option."
Kelley said that about 90 loans of approximately $90 million in volume were originated under the original pilot program, but only five or six were for marine dealers.
These changes, and others, should reverse that trend.
Another big difference is that lenders, if they qualify, can become delegated authorities for the program. After their first loan under the program, banks can make subsequent loans mostly using their own policies and procedures without pre-approval from the SBA.
To qualify, lenders must have at least $1 billion in their floorplan portfolios in all of their inventory lines, not just marine.
Even for lenders that do not achieve this status, the process of approving these loans should be faster and more efficient, the SBA said.
"We want you to succeed to be able to do what you do best," Kelley told webinar participants.
Asked how to get lenders interested, Kelley advised manufacturers and dealers to knock on doors and "force [lenders] to take a second look because we think we have something worth their while."
He advised those who have questions about finding participating lenders or starting the process to contact their local SBA office. It can be found on the agency's website.