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NADA asks SBA to improve dealer floor plan initiative

November 10, 2010

By Ray Scarpelli Sr., Metro Chicago NADA Director

Joined by commercial lending executives from four major national banks, NADA representatives met with the Small Business Administration on March 11 to discuss ways to make the SBA’s dealer floor plan pilot program work more effectively.

"The SBA clearly recognizes the importance of helping the retail auto industry. But significant changes need to be made to the agency’s dealer floor plan program to make it work," said NADA Chairman Ed Tonkin, who participated in the meeting with other NADA representatives.

"We appreciate the opportunity," Tonkin said, "to meet with the SBA to discuss potential modifications to this program, which could lead to improvements that will benefit both lenders and borrowers,"

Bankers and the NADA urged the SBA to make the pilot program permanent, to simplify the program so that it’s more user-friendly, and to allow loan advances of up to 100 percent of inventory value with the maximum SBA guarantee.

"We appreciate the valuable input provided by the banking representatives and the receptiveness to their ideas on the part of the SBA," Tonkin said.

In other NADA news . . .

• In a letter to all NADA members earlier this month, Chairman Ed Tonkin justified the NADA dues increase and urged dealers to invest in the future of their dealerships and their industry by renewing their memberships in 2010.

Tonkin outlined the association’s key achievements in 2009, including: initiating the "cash for clunkers" program and securing an additional $2 billion in funding; freeing TALF funds for inventory floor planning; providing wind-down and terminated dealers recourse through arbitration; and providing substantial input leading to a dialing back of GM’s requirements for go-forward dealers.

"Now that the economy is improving and our industry has begun to stabilize, the NADA is still working just as hard on your behalf – taking on dealer issues, ensuring fairness in the marketplace, and protecting us from overreaching legislation," Tonkin wrote. In order to maintain and enhance the level of service and value that NADA members have come to expect, an increase in membership dues is necessary, Tonkin explained.

"We have worked hard to make this increase as small as possible while still meeting our responsibilities to you," he wrote. Questions about 2010 dues can be directed to the NADA Membership Department at (703) 821-7113 or

• Members of the NADA and the ATD who enroll in NADA University will receive substantial instruction and resources free. Complimentary benefits include the Resource Toolbox’s complete online series of Driven management publications and Learning Hub’s six essential online courses that address cash reporting, cash flow management, diversity education, the FTC "Red Flags" Rule, OSHA safety requirements and EPA standards for hazardous air pollutants.

• NADA University now publishes its Driven Management Series online. "A Dealer Guide to Preventing and Detecting Fraud" teaches dealers, general managers, controllers and CFOs how to detect and prevent employee fraud. The various types of fraud are covered in detail, with specific real-life scenarios and detection methods. Also discussed are the internal controls necessary to prevent fraud, insurance coverage, leading indicators of white-collar criminals, and recent statistics on workplace fraud.

NADA and ATD members must enroll in NADA University to gain access to the Driven publications.

• The NADA marked an important milestone March 12 when Chairman Ed Tonkin and immediate past Chairman John McEleney celebrated the graduation of their children, Nancy Tonkin and Drew McEleney, from the NADA-ATD Academy.

Nancy Tonkin and Drew McEleney represent the fourth generation of their respective family businesses. The event marked the first time a current NADA chairman and a former NADA chairman had children graduate from the academy together. It was also historic because Tonkin and McEleney are the first NADA chairmen to have been preceded by their fathers in the position. Tonkin’s father, Ron Tonkin, was head of NADA in 1989. And McEleney’s father, Warren McEleney, led the organization in 1971.

"You are today’s young lions and lionesses," Tonkin said. "You bring skills and knowledge to this industry that we’ve never seen before." McEleney also struck a positive tone, telling the graduates "you’ve lived through a very difficult time, and I think [because of that] the education you received will mean more to you."

•, the NADA’s new online magazine, is fast becoming the go-to source for timely and comprehensive news about the auto industry. More than 44,000 visitors went to in its first month of operation. The magazine features expanded coverage of auto industry news, quotes from industry leaders and auto stock quotes. It complements the association’s daily e-newsletter, NADA Headlines.