Floorplan loans are top concern at dealer conference

Published online: Nov 19, 2009 News
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ORLANDO, Fla. - The education portion of the Marine Dealer Conference & Expo concluded Wednesday with three panel discussions on a wide range of the most pressing issues facing the industry.

"The State of the Lending Industry," panel featuring those involved in commercial and retail financing, was moderated by Bill Thompson of Cardinal Points Network and featured Bruce Van Wagoner, from GE Capital Solutions; Ralph Ross from the Small Business Administration; Jim Coburn, from the National Marine Bankers Association; and Scott Anderson, from Merrick Bank

"We have a major, major commitment to this industry," Van Wagoner told the audience. GE holds an estimated 80 percent of the floorplan loans in the marine industry, as other key lenders have exited the market in the last few years.

Van Wagoner said he understands dealers' concerns about rising interest rates and other hikes to their floorplan loans, but GE is facing its own losses and it had to raise rates to ensure the company could stay in marine lending.

His advice to dealers was to communicate and work closely with their lenders to make sure everyone is "on the same page." Also, he said, be prepared with a detailed business plan.

The SBA's Ross acknowledged it has been difficult, if not impossible, for most dealers to get loans through the SBA's new dealer floorplan program.

"This is brand-new for us. This has been a tough sell," he said. "It may be that the banks just do not like your industry. It seems almost irrational."

Dealers, he said, need to take the lead on getting more banks involved.

"You have to teach them about your industry," Ross said.

Coburn predicted lenders would start looking more favorably at the marine industry in the next 12 to 24 months.

"We're slowly recovering," he added, noting that consumer confidence, employment and light vehicle sales need to all improve for the marine industry to follow.

He advised dealers that the NMBA has on its Web site information dealers can use when talking to their local banks or credit unions about setting up floorplans.

The final panels of the conference were a mix of retailers and manufacturers talking about a wide range of issues, including inventory management, building better relationships between the two parties, product changes, consumer demographics, use of technology in the boating business and the used boat market.

The first panel featured Jerry Brouwer from Action Water Sports; Randy Kelly from Kelly's Port; Bill McGill from MarineMax; Bill Yeargin from Correct Craft; and Bob Apple from Volvo Penta.

The second panel included Rod Malone from Sail & Ski Centers; Alan Bohling from Seattle Boat Co.; Dusty McCoy, from Brunswick Corp.; Duane Kuck from Regal Marine; and Phil Smoker, from Smoker Craft.

Through more than two hours of discussion, all of those involved talked about the need for better communications and relationships among dealers and manufacturers if the marine industry is to successfully come through this downturn.

"We need to help each other to get through the years ahead of us," McGill said.

"The only time you win is when everyone wins around you," Brouwer added. "When we all win, we're going to have a bright future."

Most predicted a flat year for 2010, or possibly a slight uptick.

"OK is the new great," Kelly said, to laughs from the audience. "I see it as being a littler bit of an increase."

"[2010] is not going to be a bang-up year," McCoy said, adding it may be down a bit, but if he's wrong that would be a "high-class problem" to have.

Look for excerpts from the panel discussions and complete coverage of the 2009 Marine Dealer Conference & Expo in the January issue of Soundings Trade Only.

- Beth Rosenberg

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