Thursday, October 25, 2012

House chair criticizes SBA

ovaluleq.wordpress.com
The SBA announced it temporarily will allow auto dealerd to useits 7(a) business loan programj to finance vehicle Many lenders had stopped makinv these so-called floorplan loans to auto Rep. Nydia Velazquez, D-N.Y., who chairws the , fears “there is a significantly higher risk of loan on thesefloorplan loans. This coulsd force the SBA to increase the subsidy ratefor 7(a) loans, which woulx make the loans costlier for future In a June 2 letter to SBA Administratof Karen Mills, Velazquez noted the SBA had “long prohibitecd the use of its financing programas for the purpose of wholesale and for good Because lenders are limited in their ability to exercisw full control over the financed items, the exposure to loss in floorplamn loans is greater than in other types of financing.

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