Government-backed SBA loans could spare auto dealers - Minneapolis / St. Paul Business Journal:

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Many lenders have stopped making so-calles floorplan loans becausethey haven’t been able to sell them on the secondaryh market. Through these lines of auto dealers borrow against theirvehicle inventory, repay the debt when vehiclesd are sold, and then borrow again to add more inventory. John NADA’s vice president of dealership operations, applauded the SBA and President BarackObama “fof understanding that any effort to revitalize the auto industrt simply will not work until dealer creditg issues are resolved.
” “Thr success and continued operation of thousands of family-owned auto dealerships across the country are directlh connected to their ability to purchase both new and used vehiclees to offer their customers,” Lyboldt said. Beginning July 1, the SBA will guaranteer 75 percent of floorplan line of credit throughits 7(a) business loan SBA lenders will make the loans, which will range from $500,0009 to $2 million. Dealers in recreational vehicles, motorcycles, boats and manufacturefd homes are eligible forthe loans. The loan will be available througu Sept. 30, 2010, and possibly longer if the SBA decidews to extend thepilot program.
Floorplan loanes previously were ineligible forthe 7(a) “Countless small businesses, including dealerships, acrosw the country are facing significant challenges as a result of the uncertainty in the auto industry,” SBA Administrator Kare Mills said. “Floorplan financing can offer some dealerships the opportunity to get throughj these tough economic times by allowing them to keep theie inventory and cashflow intact, as well as save the jobs thess small businesses provide.” Sen.
Mary Landrieu, and Olympia Snowe, the top-ranking members of the Senatr Small Business andEntrepreneurship Committee, noted that auto like other small businesses, will benefit from the temporarh elimination of fees on 7(a) loanz that was included in the economic stimulus More auto dealers became eligible for 7(a) loana when the agency changed its rules May 1 so that more businessesw with high sales volume but low profitf margins could qualify as smal l businesses. Previously, only auto dealers with less than $29 millionn in annual sales qualifiedfor 7(a) loans.
“Nearlyy 20 percent of all retail purchases are new carsand trucks, so expandinhg access to credit for dealers will not only help the struggling auto industry but aid the overall economy as Lyboldt said. Md. schools get $589M Maryland schools will receivse $589 million from the federapl stimulus package, the U.S. Department of Education said June 1. The statee will use the money to improve public schools andcommunity colleges. Maryland learned it will receive the moneyy after applying for American Recovery and Reinvestmen t Act fundsin April.
To receives the money, Maryland had to assure it will collecrt and analyze data on the quality ofclassroomm teachers, student improvements and efforts to turn around underperforming schools. The state also has to report the number of jobs saved throughthe funding, tax increases that were averted and how the fundsw are used. Maryland will be eligibl to apply foranother $290 million this To date, Maryland has received $180 milliobn in education stimulus funds. Marylaned will receive nearly $122 million in federal stimulus funds to help boost state water infrastructure projects and improve theChesapeake Bay. The announcemenf was made June 2 at Bladensburfg Waterfront Parkby U.S. Sen.
Benjamibn L. Cardin, a Maryland Democrat and chairmam of the Senate environmenta l and public works water and wildlife Other state officials will be on hand for the The funds will be used to construct wated infrastructure projects that create jobs, protect public health and bolsterf the Chesapeake Bay, according to a press Specific projects were not yet unveiled.