The Small Business Association launched a new small business loan program that would allow auto, RV and other dealerships to get a small business loan against inventory and increase cash flow.
The SBA-guaranteed floor plan financing provides a revolving line of credit for small businesses dealing in titled inventory such as autos, RVs, boats, manufactured homes and trailers. As each piece of collateral is sold by the dealer, the loan advance against that piece of collateral is repaid. As the loan is repaid, the dealer can borrow against the line of credit to add new inventory, according to a Small Business Association press release.
Dealer Floor Plan loans are available for a minimum of $500,000 and up to a maximum of $2 million. With a maximum repayment term of five years, the loans come with at 60 to 75 percent government guarantee. The pilot program runs through Sept. 30, 2010, and then the SBA will determine if the program will continue.
Borrowers interested in obtaining a DFP loan should register on Biz2Credit and submit a loan application to get matched with an SBA contact their lender or their nearest SBA field office to get a list of SBA-approved lenders in their area who may be participating in the program. Local district offices and contact information can be obtained at the SBA Web site at
This article was submitted by Katie Kapler, Director of Online Strategy for Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to firstname.lastname@example.org.