Backed by BAC
Boat dealerships need to offer a full showroom of products to be successful, and they rely on a special type of financing called “floor planning” to fill their showroom. Floor planning is a program in which a lender — such as a bank — purchases the inventory for the showroom and, as showroom products sell, the borrower — the dealership — repays the debt.
But the marine industry can be cyclical, and unfavorable economic conditions can result in boat companies, insurance providers and finance companies suddenly exiting the industry en masse. Such was the case in 2002 when finance companies began bailing on the marine market, leaving dealerships without a reliable source of financing. The exodus left Brunswick Corporation, with its 27 boat brands and Mercury Marine engine division, in a challenging position.
Enter the Brunswick Acceptance Company, LLC (BAC), a joint venture between Brunswick and GE Capital Distribution Finance that provided a stable source of consistent, reliable and affordable floor-plan financing for dealers selling Brunswick boat brands and Mercury engines.
The advantages BAC provides the dealer are many. For example, Brunswick boat companies or Mercury may choose to pay the interest on behalf of the dealer the first few months. For the boat and engine manufacturers, secure floor planning for their dealers allows planners to level the production and delivery process and keep inventory in front of the public, rather than stored in a distribution warehouse.
Additionally, BAC, which is partially owned by Brunswick, is in a unique situation that allows it to partner with Brunswick’s Boat Group and Mercury dealers to ensure they have adequate financing capacity to carry required inventory in their showroom.