In these tough economic times motorcycle dealers have extreme difficulties to borrow to finance the purchase of the new motorcycles they feature on the floor of their dealerships. Not having the cash flow to auto finance their flooring many of them have drastically reduced their inventory and some were even obliged to close by lack of products to be presented to potential clients. On July 1st, 09 the U.S. Small Business Administration (SBA) will offer motorcycle dealers the tools and resources they need to survive in the current economic climate.
SBA will conduct a program called the Dealer Floor Plan (DFP), offering government guaranteed loans to finance inventory. DFP loans will be available for a minimum of $500,000 up to the $2 million. With a maximum repayment term of five years, the loans will come with a 75 percent government guarantee. Borrowers will also benefit from the temporary elimination of loan fees made possible by the American Recovery and Reinvestment Act of 2009. All loans (lines of credit) will be made through SBA lenders to creditworthy dealerships that meet the lender’s requirements and demonstrate sound finances and a viable business plan. Small Business Administration.