MCCLEAN, Va. — John McEleney, chairman of the National Automobile Dealers Association, announced his support last week for recent changes to SBA 7(a), a Small Business Administration loan-guarantee program.
McEleney said an expansion of the program under the terms of the American Recovery and Reinvestment Act of 2009 will benefit dealers by providing an incentive for lenders to extend floorplanning lines of credit.
"By significantly expanding the SBA 7(a) loan guarantee program, the President, along with SBA Administrator Karen Mills and her staff, have taken a significant step toward unlocking the frozen credit markets that are so critical to the success and continued operation of thousands of small, family-owned dealerships across the country," McEleney said. "The newly expanded SBA 7(a) program should encourage lenders to assist thousands of additional dealers with the liquidity they need to keep their doors open, make payroll and prevent further layoffs, especially in these difficult economic times."
The NADA has met with officials from the SBA and the Obama administration several times since last November, all in an effort to rally support for U.S. dealerships. Economic turmoil and frozen credit markets have resulted in record declines in new-car sales and put thousands of dealers out of business.
"The nation's franchised auto dealers — both domestic and international — applaud the Administration for its actions and its understanding that, unless the dealer credit problem is fixed, any effort to revitalize the auto industry simply will not work," McEleney said.