Shaheen Praises SBA Decision to Offer Floor Plan Financing to Auto Dealers

Press Release

SHAHEEN PRAISES SBA DECISION TO OFFER FLOOR PLAN FINANCING TO AUTO DEALERS

"Shaheen led a bipartisan group of 32 Senate colleagues in calling on President Obama to make floor plan financing available through the SBA"

U.S. Senator Jeanne Shaheen today applauded an announcement that the U.S. Small Business Administration that will offer government guaranteed loans to finance auto dealer inventory, a measure Shaheen has been fighting to change for months. In April, Shaheen led an effort in the U.S. Senate urging the SBA and the Obama Administration to increase auto dealers' access to credit. The SBA loans for Dealer Floor Plan (DFP) financing will be available beginning July 1st.

"New Hampshire auto dealers are facing serious challenges and great uncertainty," said Shaheen. "With thousands of jobs across the state supported by this industry, today's decision could not have come soon enough. We must to do everything we can to make sure this important industry to the Granite State's economy not only survives, but thrives."

In March, Senator Shaheen met with New Hampshire auto dealers in Dover to discuss what they needed to survive in this recession. Following that meeting, she led a bipartisan group of senators in calling on President Obama to authorize the SBA to guarantee loans to auto dealers for floor plan financing.

"In these difficult times for New Hampshire Auto Dealers, this decision comes as very welcome news," said Peter McNamara, President of the New Hampshire Automobile Dealers' Association. "Floor plan financing is the life-line for auto dealers, and will go a long way towards helping dealers secure the credit they need to survive. The New Hampshire Automobile Dealers' Association is greatly appreciative for all Senator Shaheen has done to help make today's decision a reality."

Shaheen and her colleagues efforts resulted in the recently announced temporary change to the size standard of the SBA 7(a) loan program. That effort has directly led to today's announcement, as the SBA will provide these new DFP loan guarantees through its expanded 7(a) program. According to the SBA, DFP loans will be made through SBA lenders only for titled inventory, including autos, RVs, manufactured homes, boats and motorcycles. The pilot program will begin July 1 and will be available through Sept. 30, 2010, at which time the SBA will review the program and determine if it will be extended.

DFP loans will be available for a minimum of $500,000 up to the $2 million allowable under the 7(a) program. 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 fees on 7(a) loans made possible by the American Recovery and Reinvestment Act of 2009.

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