Elkhart, IN — Today, Congressman Joe Donnelly visited Total Value RV in Elkhart to talk about The Small Business Jobs and Credit Act of 2010, which was signed into law on Monday. The new law contains several increased small business lending opportunities, as well as an extension of the Small Business Administration (SBA)’s Dealer Floor Plan Program, which Donnelly first called for through bipartisan legislation he introduced in July 2010.
“I’ve heard from dealers, manufacturers, and lenders across north central Indiana that while the Dealer Floor Plan Financing Pilot Program was well-intentioned, it needed to be extended,” said Donnelly. “We got together to discuss this issue earlier this year and I listened to local leaders in the RV, auto, marine, and lending industries and then introduced legislation comprised of their ideas. I’m very happy that some of these fresh ideas have now become law and our government will work better for these businesses so important to growing the Hoosier economy.”
“This bill provides an important option to RV dealers that will help make the wholesale purchase of RVs easier,” said BJ Thompson, President of BJ Thompson Associates and RVIA Board of Directors Member of RVIA (Recreation Vehicle Industry Association. “Anytime we can remove hurdles and help fulfill the demand for RVs, that’s good for the economy. And by supporting this bill, Congressman Donnelly has again stepped up and continued to be a friend of the RV industry.“
The U.S. Small Business Administration (SBA)’s Dealer Floor Plan (DFP) Financing Pilot Program was created in July 2009 to provide loan guarantees through SBA lenders for titleable assets such as autos, RVs, boats, and trailers through the SBA’s 7(a) loan program.
Prior to the Small Business Jobs and Credit Act being signed into law on Monday, the DFP Pilot Program was set to expire on September 30, 2010. Based on the feedback Congressman Donnelly received from dealers and lenders, he and Congressman Fred Upton introduced H.R. 5734, The Dealer Floor Plan Program Extension and Improvement Act, in July 2010 that would extend the DFP program for 5 years.
The bill signed into law on Monday renews the DFP program for another 3 years and increases the loan limits to $5 million. To learn more about Donnelly’s efforts to extend the DFP program, click here.
Also included in The Small Business Jobs and Credit Act of 2010 were increases in the SBA’s 7(a) and 504 loan programs. The new law permanently increases 7(a) and 504 limits from $2 million to $5 million and for manufacturers in the 504 loan program, loans are increased up to $5.5 million. Donnelly had written to Congressional leaders strongly urging them to do more to help meet the needs of our small business owners by expanding the lending limits to $5 million. Read a copy of his letter here.
The new law additionally invests in current and future small business owners by providing grants to Small Business Development Centers. Dan Jones, President of the Business Development Corporation, joined Congressman Donnelly at Total RV to talk about the increased opportunities for small businesses.
“Many more companies are now eligible for SBA 504 loans,” said Jones. “The size of small businesses that qualify was increased. Those businesses having a tangible net worth of $15 million and 2-year average net income after Federal income tax of $5 million are now eligible. Additionally, the maximum loan size was permanently increased to a range of $5 to $5.5 million. Of special importance to small businesses that are struggling with existing high-interest loans or up-coming loan balloon payoffs, the SBA 504 loan program can now be used to refinance existing debt at lower rates for longer terms. There was also $505 million included in the legislation to continue fee relief on SBA 504 loans through the end of 2010. This fee waiver was first enacted in February 2009 as part of the American Recovery and Reinvestment Recovery Act (ARRA), and the new funds will allow borrowers who applied for SBA 504 loans under the ARRA program to save thousands of dollars in loan fees.”
“Small businesses will be the direct beneficiaries of this legislation but the big winner will be the American economy since all SBA 504 loan recipients are adding jobs in their communities,” continued Jones. “Companies like ours across the country are ready for the increased demand that will result from broadening the parameters of eligibility and debt refinance authority and look forward to assisting many more small businesses in the coming year.”
“Access to credit is one of the most critical issues for small businesses right now,” said Donnelly. “With increased loan limits and increased training funding for current and future small business owners, we’re giving Hoosier small business owners the tools they need to succeed.”
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