Car dealers eligible for SBA loans
The Small Business Administration will start making more businesses eligible for government-guaranteed bank loans. The move will have a particularly rewarding impact on car dealers. Mitchell Hartman reports why.
Ford trucks at a dealership in Hudson, Wisc. (Karen Bleier/AFP/Getty Images)
More on Entrepreneurship, Auto Industry
TEXT OF STORY
Bill Radke: Small businesses will be glad to hear that credit is about to get easier. The Small Business Administration will start making loans to companies that used to be too big to qualify. From the Entrepreneurship Desk at Oregon Public Broadcasting, Mitchell Hartman reports.
Mitchell Hartman: Seventy-thousand more businesses are now eligible for government-guaranteed bank loans. That's because the upper limits on net worth and annual income have been raised temporarily, which will allow one particular group to qualify.
Eric Zarnikow is with the SBA:
Eric Zarnikow: Clearly there's an impact or a benefit to the auto dealers, RV dealers, auto suppliers.
Most car dealers make way more income than the typical small business. So under the old rules, they didn't qualify for SBA loans.
And right now, many need those loans, says Mike Martin. He owns two GM dealerships in Manassas, Va.:
Mike Martin: I think the real fear that a lot of dealers have is availability of credit. That is probably what keeps most of us up at night.
Dealers have been squeezed hard by the credit crunch. They need to borrow to buy the vehicles on their car lots. And, Martin says, although thousands of dealerships may close as GM and Chrysler restructure, the ones that survive will have to upgrade and retool. And they'll need ready access to credit for that as well.
I'm Mitchell Hartman for Marketplace.
Comments
Comment | Refresh
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.