Government-Guaranteed Loans Help Dealer Cash Flow

Through the Dealer Floor Plan (DFP) financing pilot program, the U.S. Small Business
Administration (SBA) offers government-guaranteed loans to finance inventory for eligible
auto, recreational vehicle, boat, manufactured home and other dealerships. The 7(a) loan
program is designed to make it easier for dealers to borrow against their inventory and
increase cash flow. In this pilot program, dealers can borrow against retail inventory,
while the loan acts as a revolving line of credit for a dealer to obtain financing for
retail goods. The dealer repays the debt as the inventory is sold and can borrow against
the line of credit to add new inventory. SBA has also expanded its size standard for its
7(a) loan program, which means that more than 70,000 additional small businesses –
including about 75 percent of RV dealers – are now eligible to apply for an SBA 7(a) loan.
Further details of the DFP program along with FAQs, a program Fact Sheet, and the SBA’s
Federal Register notice on the DFP program is available at: http://www.sba.gov/floorplanfinancing/index.html. Visit www.sba.gov for
more information on SBA-guaranteed programs.

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