KeyCorp’s decision to pull out of the business of financing inventories and purchases of recreational vehicles and boats has forced dealers to look for alternative financing.
According to a report by Tradingmarkets.com, Key’s decision to exit floorplan financing for RV dealers came as a shock to Dale McKerrow, president of Bob McKerrow and Sons. It added RV sales to its business in 1984 and has worked with Key for 18 years.
“They were my main lender,” he said.
McKerrow said his business, located in Sandusky, N.Y., has been given 90 days to find a new lender. He worries about what will happen to his business, which employs 10 people, and his $500,000 worth of inventory if he cannot secure one, despite a record of good credit.
“It’s a tough market,” he said of the current RV sales climate. “What makes it worse is we’re going into our slow season, the fall.”
Don Finkle, chief executive officer of RCR Yachts, said the impact on his business is limited. Key doesn’t finance his floorplan and the bank is just one of several retail lending options for his customers. “We always have other alternatives,” he said.
In September, KeyCorp said it will stop taking applications for new retail loans on Oct. 27 but said it will honor existing retail loan commitments and continue to service existing loans in its portfolio.
KeyCorp, which has conducted the business through Key Recreation Lending, said it will continue to offer retail marine and RV loans directly to its customers through its branch network.
While Key is exiting floorplan financing – which refers to the financing of a dealer’s inventory — for RV and marine dealers, the change does not affect those arrangements for automobile dealers.
“Key will be working with its marine and RV commercial floorplan dealers to arrange for an orderly transition of their loans to another lender consistent with their agreements with Key,” KeyCorp said in a statement.