The Small Business Administration launched a program Wednesday to guarantee portions of the loans automobile dealers use to purchase inventory for their dealerships.
The agency provided details of its Dealer Floor Plan Pilot Initiative, through which it will guarantee 75% of floor plan loans to automobile, boat, RV and manufactured home dealers.
Loans worth between $500,000 and $2 million with a maximum term of five years will be eligible for the guarantee. As long as the elimination of borrower fees provided by an allotment of stimulus money endures, the floor plan loans will also be exempt from borrower fees.
Lenders will be allowed to charge the standard 7(a) interest rates and fees on floor plan loans.