The Michigan Association of Recreation Vehicles and Campgrounds (MARVAC) continues to fine tune plans for an independent finance arm to benefit members, according to a report in the organization’s newsletter Industry Insights.
“The number one call we’ve been receiving at the association office for the last 2 1/2 years from our members has been that they need help in securing financing for their business,” said Executive Director Tim DeWitt while addressing the 180 members in attendance at MARVAC’s 72nd Annual Meeting in October.
The No. 1 agenda item for the MARVAC board for the last six months has been exploring options to help the membership with the financing dilemma in Michigan. Once completed, the executive board will review the final Phase II report in early 2014.
The following offers an overview of the possible finance program along with responses to frequently asked questions from membership.
The SFO Concept
The MMH & RVCA Specialty Finance Organization was initiated to directly address the liquidity and capital challenges facing members. One of the key ways to address these challenges is to aggregate the demand of the members and represent the member needs in a unified fashion to the capital markets.
By aggregating demand through one entity, the risk to the capital providers and servicers is reduced by providing industry focused underwriting standards with the opportunity of lending to a larger group with similar needs to minimize investment risk. In return, the capital providers will be attracted by more opportunity but will now have to compete against other sources for each member opportunity.
By participating in MMH & RVCA Specialty Finance Organization (SFO) programs, the association members would benefit in the following ways over time:
• More choices of capital sources to the Association members.
• MARVAC will profit from aggregating its members which helps support the financial stability of the Association.
• Most competitive cost of capital.
• Saves time by working with a single, association-sponsored and dedicated financial resource for all debt and equity requirements.
MMH & RVCA Frequently Asked Questions
Are you operating outside the association mission statement?
The association’s mission is to serve the needs of the members and the SFO is designed to support this belief. Further, the legal counsel of the association has fully participated in all stages of the development of the SFO and has insured the SFO meets the legal and operational guidelines of the association and its members.
Will financing be available outside of Michigan with my other investments? Different Industries? Will additional memberships be required?
The SFO is designed to provide financing to members overall. If the member requires or desires to have its assets outside the state refinanced, the SFO is designed to meet that need through its business and real estate capital programs. However, the consumer lending program will require the SFO to obtain state specific licenses and establish an MLO in that state to provide direct to consumer loans.
Will the SFO include consumer lending? If yes, is SFO going to become licensed MLO and will it solely operate in Michigan?
Yes, the SFO will provide consumer lending and disposition of existing and new consumer paper. The SFO will become an MLO in each state it provides consumer lending and relieve the individual member from that requirement and related costs/risks. There will be loan application fees which can be recovered by the consumer in the loan itself.