SBA re-launches Dealer Floor Plan loan program
Feb. 7, 2011 — The U.S. Small Business Administration (SBA) on Feb. 8 plans to re-launch a loan program meant to increase access to inventory financing for dealerships.
First made available in July 2009, the Dealer Floor Plan (DFP) pilot loan program was originally offered as a way to expand the availability of floor plan financing during the credit crunch of the time, said SBA Deputy Administrator Marie Johns. The Small Business Jobs Act of 2010 included a provision for re-launching the program with a maximum loan increase from $2 million to $5 million.
“Dealerships are a cornerstone of local business communities,” Johns said. “As we continue to see our economy recover, the re-launch of this pilot provides another tool, alongside SBA’s other programs, to help them succeed and create jobs in their local communities.”
DFP financing is a revolving line of credit that allows dealerships to get financing for automobiles, RVs, boats and other inventory that can be titled, according to the SBA. As inventory is sold, a loan advance against each item is repaid, and the dealer can borrow against the line of credit to add new inventory.
The program is available to qualifying small businesses. Rules and regulations for the program will be posted Feb. 8 on The Federal Register website and a procedural guide to the program will be posted on the SBA site.