The U.S. Small Business Administration announced Thursday that it will soon offer government-guaranteed loans to struggling dealers of vehicles, RVs and more.
Beginning July 1, dealers will be able to apply for floor plan financing that allows them to borrow against their inventory and then repay that debt as they sell the products. They can also borrow against the line of credit to add new inventory, the SBA said in a news release.
The pilot loan program will allow offer a minimum of $500,000 up to $2 million. The loans will have a maximum repayment term of five years and come with a 75-percent government guarantee. The federal stimulus package also has temporarily waived fees on these types of loans.
This pilot program will be available through Sept. 30, 2010.
For more information, visit www.sba.gov.