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What is the SBA’s Dealer Floor Plan Financing Pilot Program and how does it work?

April 26, 2017Dealer financing floor pilot Plan program SBA

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What is the SBA’s Dealer Floor Plan Financing Pilot Program and how does it work?

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The SBA’s DFP Pilot Program provides access to capital through the SBA’s 7(a) loan program. DFP loans can be made by all SBA-approved lenders. Under this pilot program, DFP loans are available for a minimum of $500,000 up to a maximum of $2 million (the statutory maximum limit for 7(a) loans). Borrowers receive the fee reduction benefit provided under the Recovery Act on 7(a) loans. The maximum guaranty level on DFP loan is 75 percent, not the maximum 90 percent provided under the Recovery Act for some 7(a) loans. The maximum term for a DFP loan is five years. Loans can only be made for inventory that can be titled. Lenders are expected to control title transfer as a means of risk mitigation.