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Small Business Admin. asked to improve floorplan initiative

November 10, 2010

A more effective dealer floorplan pilot program was the focus of commercial lending executives from four major national banks, when they joined the National Automobile Dealers Association March 11 for a meeting with the Small Business Administration.

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

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

The bankers and the NADA urged the SBA to make permanent the pilot program, to simplify the program so that it is 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 order to enhance the eligibility of dealerships for SBA programs, the NADA also stressed the importance of shifting from a gross receipts-based dealership size standard to one based on the number of dealership employees.

Tonkin said he expects the SBA will render a decision later this year.

 

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