WASHINGTON, D.C. - Floorplan lending was on the top of the agenda as delegates to the American Boating Congress descended on Capitol Hill Thursday afternoon to lobby their congressional representatives.
"The problem is banks look at your balance sheet and they say, Get out of here,' " said Scott M. Lewitt, president of Structural Composites in Melbourne, Fla., during a visit to the office of Sen. Bill Nelson (D-Fla.).
Banks aren't lending to boat dealers and other small businesses that are struggling, even though they were successful before the recession and always paid off their loans.
Lewitt and nine other industry veterans pressed Nelson legislative aid Treon Glenn to talk his boss into supporting amendments to two Small Business Administration loan programs to woo bankers into lending SBA money to dealers.
Lewitt wants Congress to raise the maximum loan under the standard 7(a) program from $2 million to $5 million, extend the program from a one-year pilot to five years and raise the federal loan guarantee from 75 to 90 percent of the loan, all to make it more attractive to banks.
Standard 7(a) loan money can be used to buy machinery, equipment, furniture, fixtures, real estate, inventory and supplies.
Industry volunteers who fanned out to Capitol offices also asked for amendments to the SBA's so-called "504 program," a fixed-asset program that provides long-term financing for real estate or equipment. Lending consultant Bill Thompson said the industry is asking Congress to increase the loan cap from $2 million to $5 million to $10 million, and permit refinancing under 504 instead of just new loans.
The industry is hoping both changes will be made this summer in S.2869, the so-called "Jobs 3" bill enacting measures to create jobs.
ABC delegates also talked to legislative staff about E15 ethanol gas and the National Oceanic and Atmospheric Administration's new ocean policy, among other topics. They said the Environmental Protection Agency should be required to study the effect of E15 on boat and off-road engines, fuel tanks and hoses before moving forward with it, and that Congress should have the final say on NOAA's ocean policy. NOAA hasn't released the policy yet, but the industry fears it will include vast closures to boats, divers and fishermen.
Earlier in the day, Cindy Squires, chief counsel for the National Marine Manufacturers Association, told the approximately 150 attendees that businesses affected by the Gulf of Mexico oil spill should keep careful records of losses associated with the massive spill.
The Oil Pollution Act of 1990's Oil Spill Liability Trust Fund, which is funded by the oil companies, can be used to pay for national resource damage, state and local emergency response activities, lost tax revenues, the cost of cleaning up, and lost business revenues.
Squires said the shortage of credit for marine companies and losses due to the oil spill come on top of the failure of an estimated 1,400 marine businesses during the last 18 months.
"The Feds need to step up," she said.
Charlie Cook, political reporter and analyst for the National Journal and NBC News, predicted significant Republican gains in the midterm elections that could give them a majority in the House and just short of that in the Senate. However, he warned midterm elections are seldom good prognosticators of the next presidential race.
"The recession is over," pronounced Ken Mayland, president of Clearview Economics. The recession bottomed out in June 2009 and he is forecasting 3.6 percent growth in GDP in 2010. He says consumer spending on boats historically follows total consumer spending - and total spending has been edging upward.
He warned that high unemployment, rising fuel prices and significant tax increases in 2011 will be a drag on the economic recovery, but "2010-11 should be years of recovery and boating should get its share on the increase in consumer spending."
-- Jim Flannery
