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The government-guaranteed loans will be available to dealers to finance theifr eligible auto andother inventory, otherwiss known as a floor plan. Through SBA lenders, the Dealer Floot Plan financing will provider lines of credit througits 7(a) program for titled inventory includingt cars, RVs, manufactured homes, boats and Dealers can borrow between $500,000 and $2 million agains their inventory and repay the debt as they sell The loans have a maximum repaymen t term of five years, and will have 75 percent governmenty guarantee. As part of the America’s Recovert and Reinvestment Act, fees also are being eliminatedd temporarilyon 7(a) loans.
Countless small including dealerships, across the countrt are facing significant challenges as a resuly of the uncertainty in the auto said SBA AdministratorKaren Mills, in a statement. “Floof plan financing can offer some dealerships the opportunith to get through these tough economic times by allowing them to keep theirr inventory and cashflow intact, as well as save the jobs theser small businesses provide.” Amid the economivc turmoil and low auto sales, car dealers throughouy the U.S. in the last severao months have run into problems keepinbg their floor plans through banks and auto Most need them in order to be able to finance andstock inventory.
The program will run unti l September 2010, when the SBA will decide whether it willextenc it.
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