ETA "friendly" Dealership Floor Plan Financing

February 21, 2024

by a searcher from Northwestern University - Kellogg School of Management in Redwood City, CA, USA

I have a specialty equipment dealership under LOI. The business has a Floor Plan line of credit in place to support the business. Current credit line is in the $4M-5M range. Business does ~3x inventory turns a year. I spoke with one of the large, national banks (who the sellers currently use) and their process is onerous, cumbersome and likely not able to be even reviewed until post-close.

We have lots of ETA friendly SBA lenders, does anyone know of any ETA friendly Floor Plan financing lenders?
Thank you.

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

We are a commercial loan brokerage shop and have plenty of lending partners and have done floor plan lending in the past. However, your biggest challenge is going to be structuring both deals simultaneously. It is unlikely an SBA lender will want to close a deal if you need a floor plan without the floor plan being in place. There is also potentially some inter-creditor agreements that might be required to be signed with the two lenders involved. Your best bet for securing a floor plan is to use the same lenders the seller currently has the floor plan with. They are already experienced with the business. The process is cumbersome, but that is going to be your path of least resistance. If you go to another lender and are trying to convince them to take a floor plan line on when you are also doing a full business acquisition, it is going to be much more challenging to get done. Most of the major floor plan lenders are divisions with large national banks, so you are going to have to deal with them. I hope this helps provide some guidance.

Reply by a searcher
from Cornell University in Schaumburg, IL, USA

I have a funding source lead for you if still need one. Message me.

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