In the “InBox” section of the June issue of Dealernews, we published a dealer’s criticism of a remark made by the president of the MIC regarding wholesale financing. We also gave the president, Tim Buche, space to reply. In his response he noted that in early May, the Small Business Administration temporarily amended the SBA 7(a) Business Loan Program to make it easier for businesses to qualify. He said: “Normally the MIC’s Techical Notices are available exclusively to members, but we’re offering Dealernews readers a one-time opportunity to access the MIC Technical Notice that addresses the SBA 7(a) loan program changes.”
Click here to download a PDF of the Technical Notice.
For your convenience, the “InBox” section as it ran in the magazine is pasted below. Click here to see the article that led to the comment and reply. Below the article you will see the full comment and reply, which had to be edited down for the print version.
From the June issue:DEALER CRITICIZES FINANCING COMMENT; MIC RESPONDS
We posted a story online about an MIC press release in which the council’s president, Tim Buche, said that one problem among many is that dealers need more wholesale financing for units. Below is a comment on that article, edited for brevity.
The statement that dealers need more wholesale financing is so far off base I can’t believe Tim said that. I am president of the California Motorcycle Dealers Association and have talked to dealers up and down this state. Also, being a 20 group member for 25 years, I have talked to dealers across this country, and seen their financial statements. The two biggest challenges faced by dealers are too much inventory and lack of retail financing. The third challenge is the availability of bank financing to dealers for cash flow. The fact that the MIC would even consider the problem to be wholesale financing really shows that the manufactures totally control the MIC.
The sales figures for 2008 are skewed by the first six months when gas prices soared. The MIC should talk about the sales figures for the last six months of 2008 to get to reality. If it had not been for the gas prices during that first six months, about half the dealers would not have made the winter. Here we are in spring, and most dealers are low on cash and stuffed with inventory. Traffic counts are way down. The customers who do come in are hesitant to buy, and the ones that do cannot get financed.
The MIC should focus on consumer advertising featuring the benefits of owning and riding our products. The MIC should also use its horsepower to find a good source of retail financing for customers. — Ray Nowakowski, president, Golden Gate Cycles, San Francisco, Calif.
We contacted Tim Buche for a response. “I’ve known Ray many years,” he replied, “and while we occasionally find ourselves on opposite sides of the fence, ultimately I believe we both want the same thing for dealers: that they have every opportunity to be successful and grow their businesses. Hey, if the need for incremental inventory financing isn’t an issue for some dealers, that’s good. But having the option available to those who do need it, how can that not be a good thing? And according to feedback from among the 300-plus MIC members, there are dealers who are having trouble maintaining even their current inventory financing.”
Buche said everyone wants to see more qualified customers, and that’s why the MIC called for consumer credit relief and the recent tax deduction. He also noted that on May 5 the Small Business Administration temporarily amended the SBA 7(a) Business Loan Program to make it easier for businesses to qualify. “SBA 7(a) loans may not be used for floorplan financing, but may be used for operations, acquisition or expansion of an existing business, in other words, may provide much-needed cash flow relief to qualified dealers. Normally the MIC’s Technical Notices are available exclusively to members, but we’re offering Dealernews readers a one-time opportunity to access the MIC Technical Notice that addresses the SBA 7(a) loan program changes by using this URL: http://tinyurl.com/ofgcjq.”
Buche ended his reply by noting that in addition to individual companies’ advertising, MIC members Honda, Kawasaki and Suzuki continue to sponsor the industry’s 20-year-old public media outreach program, Discover Today’s Motorcycling.