SBA lenders are already very involved with the auto, recreation vehicle, boat and other industries that will benefit from DFP. Since 2000, SBA lenders have extended more than 4,250 7(a) and 504 loans worth $1.125 billion to borrowers in these industries.
We believe that the DFP pilot program will provide the access to capital many viable auto dealerships need at this critical time as they go through the transition brought on by larger changes within their industry. The DFP financing will also help dealerships in a number of other industries that are facing restricted access to capital.
Because of the severe decrease of dealer floor plan financing over the last several months, each of these loans most likely will keep open a viable business that would have otherwise closed.
This pilot initiative also gives SBA the opportunity to assess and evaluate DFP financing and then determine whether or not to extend the pilot initiative.