Dealers See Increases in Credit Needs
More owners of small car dealerships and other vehicle stores will seek increases in their lines of credit during 2008, according to a Small Business Research Board poll. The survey of owners and managers of small auto and vehicle dealerships indicates that while most of their relationships with lenders are (29.1%) or (56.4%), they are being challenged by loan rates and stricter covenants. Of those
April 1, 2008
More owners of small car dealerships and other vehicle stores will seek increases in their lines of credit during 2008, according to a Small Business Research Board poll.
The survey of owners and managers of small auto and vehicle dealerships indicates that while most of their relationships with lenders are “good” (29.1%) or “excellent” (56.4%), they are being challenged by loan rates and stricter covenants.
Of those responding to the nationwide poll:
31.1% say they will request an increase in their line of credit during the next 12 months.
15.3% say they would decrease their credit needs.
53.3% say their needs would be unchanged from 2007.
On an unadjusted basis, 23.2% of the respondents increased their credit limit in 2007 while 12.5% decreased their loan levels. Another 44.6% say 2007 limits were the same as in 2006. The remaining 19.6% say they didn't have a line of credit nor any loans in 2007.
The study also found that among dealers polled:
50% use their residence as collateral.
23.4% contend higher loan rates are having the most significant impact on their business.
15.6% cite greater costs to attain a loan.
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