Word has swept the North America recreational vehicle sector over the past couple of weeks that the RV arena’s leading wholesale floorplan lender, GE Capital Solutions, is virtually turning off the spigot on floorplan financing at a time when this business sector could least afford it. Based on the rumor mill, GE, which accounts for an estimated 25% to 30% of the nation’s outstanding RV floorplan loans, may be simply “tightening down” its lending practices or, in a worst case scenario, curtailing all new loans until at least the end of the year – depending upon whom you talk to.
Well, the fact of the matter is that there aren’t a lot of concrete answers to be had on this topic at the moment. But RVBUSINESS.com did manage to locate a cooperative GE spokesperson in Danbury, Conn., PR Leader Stephen White, who agreed to address some of these rumors in an effort to bring some clarity to the table. Here’s what White, who didn’t candy-coat anything, had to say.

RVB: So, tell us, if you would, about GE’s actual position, given all that we’ve been hearing through the grapevine?
White: “You know, RV inventory turns have slowed dramatically. Industrywide, they’re off 40% year over year, and that’s not news to anyone. So, from our perspective, providing additional floorplan financing that contributes to overstocking assets that simply aren’t moving off dealer lots does not make a lot of business sense right now. So, while we’re open for business, we’re naturally being much more deliberate and selective when it comes to approving new orders.”
RVB: How much more selective is GE getting? Can you quantify it?
White: “I don’t know how to quantify it, but I can qualify it by saying that we’re taking a much closer look at requests coming in.”
RVB: No more automatic approvals?
White: “That’s correct. You know, our position may change as conditions change.”
RVB: Well, some industry insiders claim GE is declining all loans right now, and we assume you’re aware of that. And you’re saying that’s not true, right?
White: “That’s correct. Let me put it this way for you: We are in a recession, OK? And, based on the environment that we’re in, we’re making what we think are prudent business decisions to reflect the reality of what’s happening.”
RVB: So, the bottom line from GE is that you’re watching the markets, watching the recreational vehicle market, watching the U.S. economy and gauging your decisions as to your role in this field accordingly?
White: “Yeah, I think that’s a fair way to say it. I mean, we’re operating our business responsibly in light of what is happening in the economy. It just doesn’t make sense if an asset is not moving to be contributing to that situation by financing more assets.”
RVB: Based on those comments, then, GE is obviously wanting dealers to lower aging inventories before it will relax its current lending stance?
White: “That’s correct. Inventory has to start turning. That’s how we get paid, and if the inventory stock isn’t turning, we’re not getting a return on the financing we’re providing. So it doesn’t make sense to contribute to that situation by providing new financing so dealers can put more inventory in the yard.”