Washington, DC – Today, Congressmen Joe Donnelly and Fred Upton introduced the Dealer Floor Plan Program Extension and Improvement Act of 2010, which would extend and improve the U.S. Small Business Administration (SBA)’s Dealer Floor Plan Financing Pilot Program designed to provide loan guarantees for titleable assets. 

“I’ve heard from dealers, manufacturers, and lenders back home that while the Dealer Floor Plan Financing Pilot Program is well-intentioned, it needs to be extended and the government guarantee needs to be raised,” said Donnelly.  “This bill would make the changes the RV, auto, and marine industries and lenders have identified as necessary to increase participation in the program.  I’m pleased to partner with my friend Congressman Upton on the important issue of increasing lending opportunities to Indiana and Michigan businesses.”

“It is critical that credit is available to local dealers as we work to get our region’s economy moving again and help create jobs,” said Upton.  “The expiration of this program in September would deal a severe blow to many of our local dealers.  This measure provides the certainty necessary to many small businesses that are on the frontlines of our economic recovery.”

Under the Dealer Floor Plan (DFP) Financing Pilot Program established in July 2009, the SBA provides loan guarantees for lines of credit through its 7(a) loan program.  DFP loans are made through SBA lenders only for inventory that can be titled, such as autos, RVs, boats, and trailers.  Currently, the DFP Pilot Program is set to expire on September 30, 2010, and the DFP loan guarantees range from 60-75 percent. 

In February, Congressman Donnelly hosted an event with members of the RV, auto, and marine industries as well as lenders to discuss how the pilot program was going and what could be done to improve it.  From these and other conversations with the affected industries, Donnelly and Upton heard that the program would be more successful if lenders knew the program would extend past September 2010 and if the government’s guarantee was greater. 

The Dealer Floor Plan Program Extension and Improvement Act of 2010 would improve the SBA’s Dealer Floor Plan Financing Pilot Program by:

• extending the Dealer Floor Plan program for 5 years, until September 30, 2015;
• increasing the government guarantee to 90%; and
• giving the SBA the authority to revise the program to address barriers to participation by lending institutions and dealers after consulting with representatives from these industries.

###