Senator Evan Bayh, Congressman Donnelly Praise SBA Decision to Offer Lifeline to Indiana Auto, RV Dealers

At White House announcement in Kokomo, Hoosier lawmakers say decision to extend loans to floor plan inventory will help revive industries, save jobs

May 28, 2009 -- Kokomo, Ind. — Appearing at an afternoon news conference today with the White House auto czar and the head of the U.S. Small Business Administration (SBA), Senator Evan Bayh and Congressman Joe Donnelly today strongly endorsed the administration’s decision to open up a major new source of credit for Indiana dealerships that sell cars, recreational vehicles, boats and manufactured homes.

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SBA Administrator Karen Mills and Director of Recovery for Auto Communities and Workers Ed Montgomery joined the Indiana lawmakers in Kokomo, Ind., today to announce the availability of federally backed floor plan loans to help key Hoosier industries struggling with layoffs and revenue losses as the result of the nationwide credit crunch.

“When dealers lack the capital to purchase new inventory, it has a ripple effect throughout the entire industry,” Senator Bayh said. “A great many of the loans approved under this new program will keep open businesses that might have otherwise closed. Today’s announcement will save jobs and create new jobs. For a state like ours with a proud manufacturing tradition, this announcement is truly a lifeline.”

At Mills’ confirmation hearing before the Senate Small Business Committee last month, Bayh asked the new SBA chief to expand the SBA’s 7(a) lending program so struggling dealerships would have enough credit to purchase floor-plan inventory and sell their products to consumers. A month earlier, Bayh made the same request of the acting SBA administrator. Less than two months after Bayh brought the matter to Mills’ attention, she chose Indiana for the national announcement.

“Floor plan loans are critical to the health of many of Indiana’s most important manufacturing industries. When dealers of cars, RVs, boats and manufactured housing are able to get loans to purchase inventory, they generate economic activity that benefits themselves as well as manufacturers, suppliers, consumers and workers,” said Congressman Donnelly. “By filling a gap in the credit markets that has existed since at least last September, this new SBA program will allow dealers and manufacturers to plan over a longer term and, in doing so, sell more, make more and create more jobs.”

Congressman Donnelly has been fighting for floor plan financing for automobile, RV, boat, and manufactured housing dealers for months. Last month, he sent a letter to Administrator Mills urging for the inclusion of floor plan loans in the SBA’s section 7(a) loan guaranty program. He has also spoken with Treasury Secretary Timothy Geithner about floor plan financing.

Indiana has approximately 228,000 residents employed in the RV industry who manufacture, sell and service America’s family camping vehicles. This includes RV manufacturer, supplier and dealer jobs. Since the recession started in 2007, approximately 53% of the RV industry workforce has been laid off, leading to approximately 120,000 RV industry job losses in Indiana.

Source: Senator Evan Bayh