Why is there a minimum and maximum loan amount for DFP loans?
• • Based on our discussions with the various dealership associations, we believe that the limits set for this pilot program provide a range that will be beneficial to dealers who are in need of this type of financing at this time. • • Under the 7(a) program loan amounts are set at the legal maximum of $2 million. The minimum loan amount (set at $500,000), along with limiting the DFP loans to only inventory that can be titled, are steps taken to help reduce risk for lenders and SBA. Why is this only a pilot initiative? SBA has not traditionally offered loans for floor plan financing, so the pilot program will allow the agency to determine the effectiveness of the program and determine whether it should be made a permanent part of SBA’s lending programs. Why is SBA offering a floor plan financing program now? A number of large floor plan lenders have exited the market recently due to their inability to sell the loans into the secondary market. This has decreased access to capital for a
