NADA, AIADA and NAMAD Again Press SBA for Help on Flooring
The major national organization representing franchise auto dealers met with the administrator of the Small Business Administration earlier this month to once again ask for help in getting franchised auto dealers easier access to capital and floor plan loans. The request comes even as the SBA has been trying to provide dealers with loans under legislation passed last year where the SBA would guarantee floor plan loans for dealers. That program, however, has had minimal success as the guarantees have been insufficient to mitigate the reduction in credit scores for many dealers who have been set back in the recession.
NADA, NAMAD and AIADA proposed to SBA that it initiate a Pilot Floor Plan Program, wherein the loan limit for dealers is set at a minimum of $5 million and parameters to extend loans are clearly set.
They also called on SBA to modify the Size Standard lending regulations such that automobile dealers would qualify if they had fewer than 200 employees as opposed to current regulations which turn on gross revenue. Additionally, they asked the SBA to create Americas Recovery Capital (ARC) for automobile dealers to provide viable small businesses suffering from immediate financial hardship a $500 million facility to assist minority owned auto dealers with loans of up to $1 million with a 100% SBA guarantee. Finally, SBA was asked to create a direct loan program for dealers, consisting primarily of loan guarantees and direct loans designed to provide immediate access to working capital.
The dealer organizations and SBA are looking at non-legislative solutions to get the changes made, since invoking congressional action would take more time than many dealers have to get relief.
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