Following up on our discussion on beleaguered US auto dealers from from a couple months ago, let's take a quick look at TALF. On August 6th, the latest TALF operation showed about a billion in financing for dealer floor plans.
August 6th TALF operation (in millions):
This first time dealer financing is getting some traction with TALF. A billion isn't much, but at least banks are getting a little more active in the space. Previous TALF operations have not included floor plan financing, as banks/investors stayed away from dealer risk. Many banks have implemented policies last year of cutting off dealer financing (particularly those selling cars from the Detroit 3), writing these businesses off for dead.
With recent improvements in auto sales (some driven by cash for clunkers) and inventories at historical lows (see USA Today article), new financing may be on the way. So far the senior ("AAA") piece of the financing is still government (TALF) sponsored, but it's a start.