GM Financial sets spring target for commercial lending program

General Motors of Canada dealers will have another weapon in their financial arsenal soon as GM Financial Canada confirms it is targeting spring 2013 to launch a commercial lending program.

The program, however, doesn’t stop with the GM badge. According to the finance firm, the new commercial venture will be available to GM dealers and all of their non-GM affiliated dealerships, though there must be a GM dealership as a part of their group.

“By expanding this program to Canada, GM dealers now have more options when choosing a floorplan lender,” explained Brian Fallon, GM Financial’s senior V-P of commercial lending services.

“Many dealers see a benefit in aligning their financing with the captive. GM Financial obviously has a solid footing with GM and that provides stability, predictability and ease of mind for our GM dealers.”

GM Financial said its floorplan and commercial lending rates would not be tied to any volume expectations on the retail lease side. The idea, Fallon noted, is that each product offered would provide value to its dealer customers on its own merit.

New commercial lending products are said to include floorplan financing, floorplan insurance, a cash management program, service rental/service loaner financing, real estate and construction loans along with term loans and revolving lines of credit.

He said the floorplan program would let dealers finance new, used, rentals, demos, etc. and that the rate would not be tied to retail penetration.

The cash management program would provide flexible cash management options to help maximize profitability by letting dealerships use excess cash to offset monthly floorplan interest and offset up to 50 per cent of floorplan outstanding.

The construction and real estate program aim to expand, improve or modernize dealerships and may include major construction, purchasing shop equipment or making improvements or changes to comply with GM brand standards.

Terms are said to be flexible, as will amortization and payment options.

Under the program details revealed to Canadian AutoWorld, real estate construction loans will be available for up to 80 per cent of land and 100 per cent of hard construction costs.

Fallon said the floorplan insurance program is comprehensive protection of the dealership and its assets. Insurance will cover the dealer in the event of certain natural disasters such as hail and flood and when a vehicle is damaged in an accident.

Comprehensive and blanket collision coverage will be offered for new, demonstrator, and used floorplanned inventory. He noted that deductibles will range from $1,000 to $10,000 and that comprehensive premiums are based on dealership’s location and loss history.

Early reports indicate the physical damage policy features spot delivery, credit identity fraud, impending damage, false pretense, economic loss coverage and wind/hail aggregate deductible.

GM Financial’s Dealer Access System (DAS) will allow commercial lending customers 24-hour access to update and inquire about commercial loan information via the Internet.

Fallon said DAS provides real-time account and payment information so dealers can review reports and generate critical management data including available credit, outstanding balances and inventory information.

“We have a no-strings-attached approach to our business, so our floorplan pricing stands on its own merit and is not tied to retail penetration or other products.”

GM Financial said it is currently accepting applications so dealers will be prepared for get on board when the program is launched this spring.

Vincent Woffenden will oversee commercial operations in Canada. In his new role, Woffenden will be responsible for the commercial lending unit’s Canadian business as it prepares for its Canadian launch in spring 2013.

With over 13 years of experience in the automotive finance industry, Woffenden has an extensive history on both the retail and wholesale side of the industry. Most recently, he worked at Bank of Montreal, as a director and account manager. Previously, he spent more than a decade at Chrysler Financial. His last position there was as dealer credit manager based in Quebec.