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.