Car Dealers Saved – financing to be made available.
This afternoon, the government has just announced a rescue package for dealers who have ‘floor plan finance’ (ie they run off credit securitised by their vehicle stock) with GE and GMAC.
As everybody in the industry knows, when GE Money & GMAC announced a few weeks ago that they would be calling in all their debts, there has been a frantic struggle by dealers attempting to refinance before the debts were called in – expected to be Jan 2009.
Of course the credit crunch has dried up many sources that would otherwise have been available leaving hundreds of dealers faced with the very real possibility that they would be unable to repay these massive loans. That would eventually lead to car repossessions and scores of potential bankruptcies.
However thankfully, at the eleventh hour the government has stepped in and together with the ‘big 4’ Australian banks have approved a finance package of around $2 billion which will be made available to affected dealers. There will be eligibility criteria of course (such as the viability of the business) but this is fantastic news for the thousands of families who’s livelihoods are dependent on the retail motor industry.
More information to follow soon…
Level 2, 9 Help Street