Greg Gerber posted on November 17, 2008 06:29
TEMPE, Ariz. -- RV Industry News has learned that GE Commercial Distribution Finance has suspended the floorplan financing for RV dealers nationwide, at least through the end of the year.
Friday afternoon, dealers and manufacturers alike received word that GE "has frozen flooring for every dealer, regardless of account status, until January for all manufacturers."
One independent factory rep sent the following e-mail to RV dealers Friday:
"Obviously, this is a big deal with the Louisville show coming up in two weeks. We have been told that a phone call from you to GE to plead your need for specific inventory may result in an approval. We have also been told your documentation, financial statements, etc., must be current with GE to have any chance for an exception approval. This exception policy could be critical for any retail orders you have, or may place, for immediate delivery.
"This alleged policy could have a major effect on your operation, and ours as well. Please let me know what you know. We will prosper, and you will, too, but we need to know the new rules. And, you need to communicate your concerns with GE."
RV Industry News learned that GE Commercial Distribution Finance abruptly pulled all its floor plan financing from manufactured housing dealers in October. Mobile home dealers have been scrambling ever since to find alternative financing arrangements to pay for lot inventory.
One RV dealer reported that his GE rep said the bank was not funding stock units for their entire portfolio, including boats.
The dealer reported that unless units were presold, there would be no exceptions to GE's policy. "I have to say at face value, it is not very motovating to try to keep up with curtailments, even interest, not knowing if GE is continuing as partners. This is going to be devastating to dealers and manufacturers alike," the dealer said.
Another dealer reported that he had more than $1 million in floorplan and had used less than one-quarter of his available credit line. Although he was never late in making payments and had not had any issues with the company, GE announced it had stopped flooring his units. "I'm getting a lot of double speak from GE. They say they will be at Louisville and have no plans of getting out of commercial flooring," the dealer explained. "One manufacturer stated they are having many issues with GE. Is GE in trouble?"
RV Industry News attempted to contact GE reps over the weekend, however they have not yet responded to the inquiries.
UPDATE at 8:39 a.m. CST: GE has frozen the floorplan lines of all RV dealers until the bank can complete a full audit of the dealership's files. According to one dealer, this includes looking at updated financial records for the dealership so that GE Commercial can judge the current risk.