GE flooring is killing the dealers

The more boats you have on flooring, the better rate you get. GE is charging outrageous prices on interest when it has been at its lowest rate in decades. So the less boats you have on your flooring the rate goes thru the roof? The dealers hanging on to low inverntory get hurt the worst in GE's eyes. They say they are out there helping. Smoke and mirrors!!! What is your dealer doing to survive?

P.S. Manufacturer raising prices as well? Will this ever flatten out? Are we opening the doors for China to build us tow boats as well???????

What is my dealer doing to survive?............. http://www.shadrack.com/christmas/

You have to put your mind on their side of the coin too. It is a risky business right now and with risk comes higher interest rates. That is the reason most of the other flooring companies pulled out of the industry. Sure once they come back, it will get more competitive, but there is a reason they pulled out. Risk......
I am not saying it is right, but put your money where your mouth is. My dad used to always say, "would you lend your money to that person or entity?" It is just a risky business right now and I do agree it sucks, but it does make sense.

I have to agree with Diggs. IT does suck, but equally... to say that dealers are under pressure to take more boats in order to get the better rates doesn't fly with me. They can choose to if they want to but its not like GE is forcing them to.

I don't understand the risk, isn't the floorplan loan secured by boat?

Originally Posted by srock

I don't understand the risk, isn't the floorplan loan secured by boat?

Sort of. If the dealer goes out of business, then the flooring company will have to sell the boat and it will probably go for less than cost. On top of that, the dealer probably did not pay the interest for a while before the flooring company gets around to repo'ing it all.

I would loan money only to a very few boat dealers right now...would you?

GE had no problem taking stimulus/bail out money at all. I think they are bast@#ds wether what they are doing is right or wrong. If you floor more then wouldn't it be a bigger risk for them. Is it possible to work with a local bank we do that and it seems to help. Then again I am not a boat dealer. I will never feel sorry for GE when you look at the taj mahals they build to house their company compared to what small boat dealers are doing.

Well I know banks don't want to lend money to those who "need" it but I understand that as well. It becomes investment capital instead of a loan and that indirectly would put them in the boat or whatever other business. I'm all for local banking because I believe it helps if someone knows you, your business, the community and your ability to run that business. Large banks seem to make decisions based on today's most recent policy decision out of the corporate office. I think this hammers our vanishing middle class.

I believe some agreements are different than stated by talltigeguy. From what I understand at least some builders are required to buy the boats back if a dealer goes under.