Floor Plan Support Continues for the Marine Industry
BY STEPHEN JONES, MARKETING,
GE COMMERCIAL DISTRIBUTION FINANCE
Foreword: Boating Industry Canada was
anxious to learn more about the status of
marine dealer floorplanning in Canada
and invited GE Commercial Distribution
Finance to provide us with this valuable
update.
Andy Adams - Editor
AS EVERYONE is now acutely aware, the
downturn in the financial markets has
created tumultuous economic times that
have impacted businesses to varying
degrees throughout the world. Rising
costs of capital, tightening risk criteria
and fluctuating index rates seem to be
affecting companies of all sizes across
most industries. Anyone who watches
the nightly news knows that from manufacturing to financial institutions very
few industries have been unaffected, and
a look through the bond rates issued by
major companies operating in Canada
gives a very good indication of the rising
cost of capital.
GE’s Commercial Distribution
Finance Canada business (CDF) is part
of GE Capital, which provides loans,
leases, financing programs, and other
financial solutions in over 35 countries
around the world. It is important to note
that GE Capital has seen lower loss rates
and loan-loss reserve ratios than those of
most global financial institutions
because the company originates mostly
secured or asset-backed loans. GE has
taken significant steps to ensure the
long-term viability of GE Capital. These
include reducing leverage and long-term
debt needs to solidify our credit rating.
Most importantly, despite the economic turmoil, CDF remains a committed partner to the marine industry in
Canada. The team at CDF demonstrates
an understanding that our success is
contingent upon the success of our customers. CDF has been managing
through these tough business conditions
with cost cutting actions within the business and systematic changes to manage
fluctuating index rates and rising costs
of capital rather than temporary solutions. CDF’s view of our role in the
marine industry is a long-term commitment, providing customers with the
level of service and the products they
have come to expect.
Although there is no doubt that the
financial competitive landscape in
Canada is shifting, the Canadian banking system remains healthy and a viable
source of capital. As TD Bank economist
Craig Alexander said in an interview
with the Canadian Press on January 24,
2009 “The reality is that credit is flowing
in Canada”. Alexander was responding
to a Bank of Canada report released on
January 23, 2009, which stated that
amid widespread calls for Canada’s
banks to increase credit to hard-pressed
consumers and businesses, the latest
data indicates they’re doing exactly that.
Jocelyn Wyatt and Jeff McDermott of
GE Commercial Distribution Finance
were at the Toronto International Boat
Show to work with their clients for the
2009 season.
The Bank of Canada found that on the
business side, bank loans to Canadian
residents for commercial purposes rose
during the month of December 2008
and ended up on the year. Despite challenging market conditions, financing
options continue to be available.
Of course this does not take away from
the fact that, during this economic period,
marine dealers and manufacturers should
understand the heightened importance of
managing business costs and cash flows
closely. The events of the last few months
have demonstrated the vital need to develop contingency plans and to allow for
flexibility to address the changing
demands of a rapidly evolving economy.
Strong business management practices,
flexible plans to address the changing economic landscape and the long-term commitment of financial solution providers
like CDF will better position us all to
weather this uncertain period.
