Dealer Floor Plan (DFP) financing will be available beginning July 1. Under the DFP pilot program, the SBA will provide loan guarantees for lines of credit through  its 7(a) program. 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 make the determination of whether or not to extend the program.

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% government guarantee.  Borrowers will also benefit from the temporary elimination of fees on 7(a) loans made possible by the America’s Recovery and Reinvestment Act of 2009.

According to Mills, “Countless small businesses, including dealerships, across the country are facing significant challenges as a result of the uncertainty in the auto industry,” Mills said.  “Floor plan financing  can offer some dealerships the opportunity to get through these tough economic times by allowing them to keep their inventory and cash flow intact, as well as save the jobs these small businesses provide.”