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Dealers to receive up to $5M in SBA-guaranteed loans under Senate bill

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Dealers to receive up to $5M in SBA-guaranteed loans under Senate bill

Neil Roland

Automotive News -- September 16, 2010 - 5:57 pm ET

WASHINGTON -- Small auto dealers would be able to receive federally guaranteed loans of as much as $5 million - up from $2 million - under an Obama administration-backed bill that passed the Senate today.

The provision is part of a small-business jobs bill that seeks to increase lending and would provide $12 billion in tax cuts to small businesses.

The dealer portion of the legislation seeks to loosen credit by increasing the maximum size of a federally guaranteed loan that can be extended by the Small Business Administration.

It would affect the SBA's year-old floorplan financing program for dealers, which has struggled to attract lender participation.

The credit crisis has made it difficult for many dealers to obtain floorplan financing from lenders, especially since U.S. auto sales plunged to 27-year lows last year and have been slow to recover.

“Dealers strongly urge the House to take up and quickly pass the Senate bill unamended,” Bailey Wood, a National Automobile Dealers Association spokesman, said today.

President Obama also urged the House to quickly pass a bill identical to the Senate legislation.

The vote today was 61-38, with two Republican senators - George Voinovich of Ohio and George LeMieux of Florida - joining the Democratic majority.

Senate Small Business Committee Chairwoman Mary Landrieu, who sponsored the bill, hailed passage of the bill as “a long-awaited victory for the 27 million small businesses in America

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100916/RETAIL07/100919875/1203#ixzz0zkWWOFeS

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