Farm Equipment posed two questions to dealers about the importance of Textron's pullout on dealer operations: With Textron's exit from dealer floorplanning, and the pullback by other wholesale financing firms, are you having difficulty in obtaining floorplan financing? What impact will a tightening of floorplan options have on your equipment stocking plans over the next 12 months?

This is what you had to say:

A. "We are having no problems with equipment floorplanning. We are using our normal banking relationships for equipment not covered by manufacturer plans. We don't expect to change our stocking plans because of floorplanning, but in reaction to any changes in end-user demand."

- Dave Walter, vice president, Ziegler Inc., Shakopee, Minn.

A. "We are not having difficulty with financing. We have a pre-approved line of credit from our bank. I will be cutting back on stock regardless of the availability of financing."

- Curtis Hanson, president, Mid-State Equipment, Columbus, Wis.

A. "We are not having difficulty in securing dealer floor planning. What we have done differently is aligned ourselves with more than just 1 to 2 finance houses so if things change further we have a fallback position."

- Janet Felosky, president, Monroe Tractor, Henrietta, N.Y.

A. "We never cared to deal with Textron so their decisions don't affect our plans. We are having problems with some floorplan companies, most of ours are run through Agricredit. The tightening will have a huge impact on us and surrounding dealers. As a dealer, we are carefully planning on what to stock for 2009. We'd better keep seeing increases in equipment sales for these lending institutes to possibly re-think their terms."

- Eric Sutter, sales manager, Sutters Brothers, Coldwater, Ohio

A. "The shortline company that we deal with that used Textron to floorplan has not replaced them at this point. We will cut way back on what we stock."

- John Finney, Finney Implement Inc., Lancaster, WI

A. "We floorplan and have a credit line for the parts department at a local bank. They have informed us they intend to value all equipment at 50% value when we renew our notes. They would however, be happy to take any and all real estate as collateral."

- Phil Jensen, owner, Jensen Equipment Co., Newton, Ill.

A. "We aren't having difficulty with floorplan financing, but we use our local bank. Our line of credit is secured with our building, as well as inventory, so it is pretty solid for the lender. They have indicated no difficulties fulfilling our credit needs, and currently we are using less than a third of our available line, although that will grow through spring. I am being wary, however, of how much we order and the size of our inventory. We don't want to test our line of credit too much."

- Dave Schmidt, president, Schmidt Implement Co., Salem, Wis.

A. "At this time we are having difficulty with floor plan financing. We have CNH Credit financing through New Holland, which is the farm equipment line we sell. We don't see any problem in the next 12 months. We also have the option of going with Capital Solutions for the Woods Mow'n Machines lawn equipment."

- Duane Hyland, Hyland Motor Co., Spring Valley, Minn.

A. "Most of the time Textron was a pain to work, with so it was a good good-bye. Floorplan interest has been my greatest expense and I have stopped stocking wholegoods that I can't pay for. If the companies complain (to Textron), good-bye to them. This is a little harsh, but the bottom line is you have to take care of No. 1."

- Ken Foland, president, Foland Farm Machinery, Sidney, Neb.

A. "Presently our lines involved are Cub Cadet and H&S Manufacturing and I'm not sure yet what is going to happen. I'm still receiving new Cadets with Textron floorplanning. I'm using our local banks for some. I will definitely stock less equipment if floorplanning becomes restricted or more costly."

- Art Carter, Carter & Gruenewald Co., Juda, Wis.

A. "We do very little financing with Textron, it will make no difference to us when they exit. So far, we have had no tightening of floorplan options from New Holland, Kobelco, Kubota, GE or the bank, but we will be stocking less in 2009."

- Jim Payne, Payline West Inc., South Elgin, Ill.

A. "We are not having any difficulty finding wholesale financing. Our primary firm does want to reduce his portfolio with us, but we obtained a floorplan line from Wells Fargo with better terms than our primary source offered. We will reduce our stock, not because of floorplan terms but because of the forecasted reduction in ag purchases."

- James Monroe, general manager, Monroe Tractor, Henrietta N.Y.

A. "We do not do floor plans. Too many dealers have been caught with inventory that doesn't sell and their pockets are only so deep. We are small and plan to stay reasonably small. We are here to stay, not make a big splash and be gone."

- Debbie Hicks, Hicks Sales LLC, East Corinth, Vt.

A. "We used Textron floorplanning one time for some new tub grinders. Before that, we were on an open account with that company. The Textron lawn-and-garden part of the floorplanning hasn't changed. We use it the most."

- Jim Meixner, after-market manager/controller, MDMA Equipment, Durand, Wis.

A. "The replacement of Textron financing is from our bank, using a current line of credit. The lack of credit will affect stock orders from shortline manufacturers, since we relied on their interest-free terms."

- Graham Drake, vice president of operations, Cervus LP, Calgary, Alberta

A. "We are not currently utilizing anyone's floorplanning. We buy early in the fall and pay cash for the largest discounts. I don't foresee the lack of floorplanning options resulting in any change in the way we do business. The tight money for the farmers to borrow from the banks or financing companies may result in lower buying trends from our inventory."

- Richard Fewell, president, Fewell Tractor Sales Inc., Campbellsburg, Ky.

A. "We are fortunate that our local banks are in good standing and loaning money, we have a line of credit for floorplan financing with them. We're watching our trades, floorplanning seems to be harder for the used and we won't take as many trades. We have our salesmen pre-selling or have the customer sell. We will be looking at the terms with all our vendors. Those with the best floor plan will be where we buy from. We hope to be able to keep our inventory at levels to where we can keep market share."

- Kathy Straub, Straub International, South Hutchinson, Kan.

A. "So far, we are not impacted by Textron's exit as Montana is grandfathered in until June 2010. Montana is working on a replacement, but we have some time to do so. We have seen no changes in our day-to-day operation in regards to the flooring. So far, we have not seen any adverse impact from any of our other flooring sources with our other lines."

- Lou Ann Tucker, AgBag Forage Solutions, Astoria, Ore.

A. "I currently have inventory floored by Textron and I have another flooring line, so Textron pulling out has not affected me directly that way. However, it did lower the amount in my overall flooring that is available. It will reduce the amount I stock and what I am going to stock."

- Scott Sage, owner, Hobby Tractors & Equipment, Pleasant Grove, Utah

A. "Yes, we are having trouble with financing. Currently we are using John Deere's floor plan program and another program through our local bank. We are still looking for an outside source to floorplan trade-ins. New equipment is still in short supply so I don't see any difference in our stocking plans for 2009. There is no stock, just retail orders."

- David Bader, president, Bader Brothers Inc., Reese, Mich.

A. "We didn't do much with Textron. CNH will still do it on Case IH-only items, but at a pretty high rate. We are doing more with the local bank right now, and we are getting along without too much external floorplanning as we keep the pressure on the sales staff to keep the trades moving. As far as stocking, if we can't stock from shortline with decent terms, we will not take inventory and may well be looking at canceling the line. This will have little, if any impact on our stocking plans from CNH."

- Bob Shanks, operations manager, Minnesota Ag Group, Plainview, Minn.

A. "I know that with many dealers this is their number one concern with their manufacturers and finance companies. Future stocking levels and order quantities will be substantially decreased unless floorplan rates decrease and/or a new vendor comes along with a floorplan finance option."

- Eric Schnelle, president, S & H Farm Supply Inc., Joplin, Mo.

A. "We have our own bank financing so it will not have a negative effect on our business. It might help in eliminating some unwanted competition from marginal dealerships."

- Jim Nelson, Central Machinery Sales Inc., Moses Lake, Wash.

A. "The only lines that we have had trouble finding floorplanning for are snowmobiles. The companies that Polaris uses charge rates that are way too high. We were using a line of credit from American Express and when they shut that down, we found that John Deere and Agricredit would not floor snowmobiles. So we ended up borrowing the money from ourselves. We have plenty of credit available for all of our ag equipment flooring needs. We are watching our inventories very closely because of the uncertainty in our markets right now — not because of a lack of funding. From living through past downturns in equipment sales, the major problem has come from interest expense getting too high."

- Greg Hamilton, Hamilton Farm Equipment Center Inc., Okanogan, Wash.

A. "I cannot tell you the total impact as of yet. The future does not look rosy without someone to carry the floorplan. We also use GE and they are starting to raise rates and lower the length of time equipment can be carried. New Holland raised our floorplan rates and discontinued flooring off-brand tractors and equipment. Right now it is hurting the small business owner."

- Brent Hollopeter, president, Medina Tractor Sales, Medina, Ohio

A. "We will be lowering our equipment inventories compared to what we have had in the past. We will not stock some of the shortlines we have stocked in the past. We will be cutting back some on our mainlines as well. The local bank that we were using to floorplan some of our equipment failed this past month, so we have been looking and securing another bank — actually before their failure — to fill this void. At this time we have not finalized the details with the bank we are looking at. Second, the flooring costs of the manufacturers that we represent are skyrocketing to a point where we're being forced to go elsewhere for floorplanning. We try to stay away from flooring any used equipment."

- Bob Zouza, operations manager, NS Tractor Company, Merced, Calif.

A. "We are just now looking into our options. If no extended floorplan is available we will definitely lower our stocking levels. Kubota is already looking at extended terms."

- Chuck Johnson, vice president, Pelican Tractor Co. Inc., Klamath Falls, Ore.

A. "We presently use the free manufacturing floorplans and then our local banks."

- Gerald W. Heim, president, Hoxie Implement Co. Inc., Hoxie, Kan.

A. "I never liked dealer floorplans. Cash is always best. Too much floorplan and your company is going down like so many at this time. We can get credit any time, but I would rather not, so we plan — unlike the government — and we get no bailout. We stock a lot of different things and buy at the best discount to pass it on to our customers. Last year was our best year in 19 years. Go figure. I would sell the business just to work for someone and give 100%, but no headaches and you get a day off once in a while. Who would buy now or believe we are doing well in these hard times?"

- Ed Kirby, Orchard Hill Farm Equipment, Belchertown, Mass.

A. "We are currently with GE Finance. They seem to be tightening up a little and not as flexible as they once were. Rates still seem to be climbing. We will not stock as much new product and will only stock models that we have a market for. We will not stretch out and try new items."

- Rona Lozier, owner, Tri-County Implement, Waynesburg, Ohio

A. "Textron is not affecting us. We're using GE Capital. We usually pay within 30 days to get an additional discount. Basically, if we don't have the money, we don't order the equipment, parts or whatever."

- Brenda Flasowski, manager, Wallace Garden Center, Crockett, Texas

A. "We are not having as much of a problem getting floorplanning as we have a good interest rate. We can get a better rate with the local bank than with CNH. We will have to back off on inventory to try to prevent paying interest in the future."

- Joe Wallace, owner, Somerset Farm Equipment, Somerset, Ky.

A. "Case IH (CNH Capital) was providing our floorplan for all used and shortline equipment. They have pulled out of non-Case IH & Case IH trade-in flooring. We have no viable source for floorplan at this time. In addition to that, they have raised interest rates 4% in the last month and a half. Not only will it limit the amount of equipment we stock, it will limit our ability to accept trade-ins on certain deals, thereby limiting our ability to conduct business.

- Terry Swenson, president, Heart Mountain Farm Supply, Powell, Wyo.

A. "We do not use Textron, we get our finance from our main line supplier John Deere. They have not yet lowered their limits. If they do, we will have to cut back on inventory."

- Ken Svendsen, president, Greendale & Utica Services Inc., Omemee, Ontario

A. "We are financing equipment with the manufacturer's floorplan, the local bank, and we pay cash for a lot of the equipment. We will be conservative in stocking equipment over the next 12 months. We will purchase very few new units from manufactures that have raised their interest rate due to the tightening credit market. New Holland and Case have raised their floor plan to 6.85% over prime (3.25%) for a total of 10.1%. CNH is the only manufacturer that we represent that has raised their rates."

- Steven Marmande, president, ML Industries, Houma, La.

A. "We made calls to find a new source of floorplanning financing firms to FFC, Agricredit and our bank. Most of the financing companies have told us that since Textron is pulling out they have been getting lots of calls. We were disappointed that Textron couldn't have given us a head's up 4 months in advance, which would have made it easier to get things in place. The inventory will be less than what we normally stock and this will, in turn, have customers driving all over — since every independent small ag business will probably be in the same boat."

- Yvonne Profota, president, Profotas Farm Equipment Inc., Chatham, Ontario

A. "We are having a few more challenges to find enough flooring on a seasonal basis. Our bank has agreed to partially fill the void. We're also managing our inventory a bit better."

- Ian Bunbury, Avenue Machinery Corp., Abbotsford, British Columbia

A. "The departure of Textron from the wholesale finance business has created problems for our company. We have been looking at options — Agricredit, Farm Credit, whomever. Hopefully someone will step-up."

- Leon Knaak, store manager, Service Motor Co., Wausau, Wis.

A. "We secure the bulk of our floorplanning through Kubota Credit. We're actually very pleased with Kubota Credit at this time. They have offered us a policy on our L-series tractors that enables us to put more equipment on our yard with reduced risk. Kubota Credit has also reduced their curtailment requirement from 10% of the invoice to 1% of the invoice once a unit enters the interest-bearing period of floorplanning. This was an effort to help relieve the cash flow burden created by a 10% curtailment policy. In general, Kubota Credit is doing a good job of working with us during this challenging time. The Textron-Farmtrac issue has opened our eyes and convinced us not to trust most manufacturers or finance companies. As a result, we no longer feel comfortable placing long-term orders. We would rather order on a monthly basis keep our inventory levels a little tighter. The world changes too fast these days for us to stick our necks out by committing to over a year's worth of inventory as most manufacturers would have you do."

- Jeff Deen, Deen Implement Co., Forney, Texas

A. "Vermeer furnishes their own plan and McCormick uses Agricredit. I think it will be necessary for manufacturers to keep the floorplans relaxed for dealers through this slowdown. I agree that the industry is going to suffer some, but a good season will bring sales — even if the economic situation is not so good. Currently, I am going with my averages and I'm optimistic for a good season and aggressively acting on interested customers. Those that are floorplanned outside of the OEM are going to have a hard time staying viable. This is where a strong manufacturer can make the difference."

- Kevin Wittig, president, Tractor Care Inc., Harrisonburg, Va.

A. "To date, financing beyond the manufacturer's floorplan has been procured through Chase Bank. But it has taken extra work and communication. Our present concern is meeting ongoing needs, as funding is becoming more difficult. Availability of funds for floorplan inventory will impact our order-stocking plans. Inventory will be monitored closely for more of a just-in-time approach to placing orders. Yes, this approach is likely to cause a missed sale. But the alternative could make out business more vulnerable."

- James A. Keller, manager, Arizona Production Machinery, Phoenix, Ariz.

A. "It is having a major effect on the shortline maufacturers that relied on companies like Textron for floorplanning. It allowed manufacturers and dealers to ship products ahead of season and manage their cash flow. It will have a negative effect on using their working capital for carrying inventory."

- Wayne Feltz, Great Lakes New Holland Inc., Mitchell, Ontario

A. "Textron's withdrawal is having a very significant impact on us with allied floorplanning. We're reluctant to go to the bank and tie up our line of credit. Plus, the banks generally don't understand our business. We will continue to reduce our stocking levels to a point we can manage our inventory with our own resources, or to where there would be minimal impact on our line of credit. Floorplanning used trades is becoming more of a problem as well."

- Donny Sanders, president, Martin Truck & Tractor Co. Inc., Columbus, Miss.

A. "We are a John Deere dealer that uses John Deere floorplanning, or we carry it ourselves, and we have had no problem. We do not anticipate any problems over the next 12 months."

- Bill Litton, president, Wade Inc., Greenwood, Miss.

A. "We are having trouble since both GE and Textron have exited the business. We can still use GE on those lines that have a purchase-money arrangement with GE, but most manufacturers are scrambling to find an alternative. We are using our bank, and John Deere Credit for some flooring, but have discontinued most shortline stocking of equipment."

- Gary Lathrop, general manager, Lathrop Equipment, Casper, Wyo.