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SBA launches program for commercial real estate refinancing

March 4, 2011
By Mark Scarpelli, Chicago Metro NADA Director
Small businesses facing the maturity of commercial mortgages or balloon payments before the end of 2012 may be able to refinance their loans under a new program by the Small Business Administration. 
The new loan-refinancing program comes less than a month after the SBA rolled out a new dealer floor plan (DFP) loan guarantee program strongly supported by the NADA. The refinancing loan program, which the NADA also backs, is designed to respond to another financing need often expressed by dealers: the refinancing of commercial real estate. 
"The new refinancing loan is structured like the SBA’s traditional 504, with borrowers committing at least 10 percent equity and working with third-party lending institutions and SBA-approved certified development companies in the standard 50 percent/40 percent split," the SBA said in a statement. But a key feature of the new program is that it does not require an expansion of the business to qualify. The program, authorized under the Small Business Jobs Act, will be in effect through Sept. 27, 2012. Questions regarding either program can be directed to NADA Regulatory Affairs at (703) 821-7040 or
Loan Marketing Scheme
Dealers are warned to be on the lookout for possible fraudulent activity related to dealers’ retail loan portfolios. Certain individuals have recently targeted dealers with a scam involving a promise to "bundle a dealership’s car loans and market them to investors," essentially selling the car dealers’ collectible debt. 
The individuals then require dealers to pay car buyers’ first two to three months’ payments up front. These individuals collect the fees, but never market the loans. 
One such group of individuals in Washington state recently was sentenced in federal court for its role in such a scheme. This group operated under several names including Auto Credit Solutions, Sub-Prime Financial Services, Easy Credit Store, Instant Funding Systems, Great Northwest Financial Services and Western Empire Financial Services. 
Dealers are encouraged to be diligent in selecting business partners. A dealer who suspects such fraud should contact the Internal Revenue Service Criminal Investigation, the U.S. Postal Inspection Service or a local police department.
In other NADA news . . .
• NADA Chairman: Auto Dealers ‘On the Way Back’ 
With auto sales expected to reach nearly 13 million units in 2011, the outgoing chairman of NADA said last month that the nation’s auto dealers have a renewed sense of optimism about the auto industry. "We are on the way back," said Ed Tonkin, a multi-franchise dealer from Portland, Ore., who ended his term Feb. 7, passing the gavel to Utah dealer Stephen Wade at the NADA Convention and Expo in San Francisco. "Our challenge now is to do everything in our power to keep things moving forward," Tonkin said.
• NADA University Launches Three New Online Courses
New offerings posted to the NADA University Learning Hub include courses in the legal and parts categories
o "Complying with the FMLA" provides up-to-the-minute Family and Medical Leave Act compliance information for dealers, general managers, and HR personnel. The course explains the FMLA and its provisions, and covers regular FMLA leave and military family leave. 
o "Overcoming Obsolescence" provides training in basic parts theory, and demonstrates how obsolescence occurs, how to stop it, and how to move obsolete parts. 
o "Unlocking Frozen Capital" discusses how to free up cash—and keep it flowing—in all areas of the parts department. Parts courses are intended for dealers, general managers, department managers, and controllers. 
All three new courses are available to NADAvt subscribers, who have access to all Learning Hub online courses, two years of paid webinars, and two years of NADA and ATD Convention workshops (2011 NADA workshops to be posted in March). NADAvt subscriptions as well as individual courses, workshops, and webinars may be purchased online at the NADA U Store.
• Enroll Now for Spring Dealer Academy 2011 Classes
Spring 2011 classes include:
o ATD Truck Dealer Academy, starting April 4
o Dealer Candidate Academy, starting May 9 or June 6
o General Dealership Management Academy, starting May 16
Download an application for those programs here. Individual Academy classes (e.g., Financial, Parts, Service and Variable Parts 1 & 2) are also open to department managers, who may attend a week of classes even if they don’t have a student in the Academy program. Download an application for the Department Manager Program here. You can also call 800.557.6232, ext. 2, or e-mail for an application.
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