City extends $1 Million in Bridge Loans to Car Dealerships

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While the Detroit 3 CEOs are in Washington DC trying to secure $34 Billion in Bridge Loans, two Dealerships in Norco, CA have gone to their city's Redevelopment Agency and secured Bridge Loans of $500,000 each.

The Bridge Loans from the City of Norco are thought to be the first example of a city extending credit to car dealerships in an effort to keep them as a viable business.

The General Manager of the Dodge Dealership that received the $500,000 loan stated that his dealership may have been forced to close if they hadn't received the loans from the city.

Here's a link to the news report: http://www.pe.com/localnews/inland/s...5.4504e23.html

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Here's another news report that provides additional details about the Bridge Loans that Norco's Community Redevelopment Agency has approved for two local car dealers: http://www.contracostatimes.com/california/ci_11159026

It's interesting to note that Frahm Dodge was once a powerhouse in the Southern California market - it was not uncommon for them to sell 200+ new units per month. The latest sales reports show that sales have fallen below 40 units per month.

It will be interesting to see if other cities follow this pattern of offering Bridge Loans to car dealers. In many ways it makes sense, it's cheaper to keep an existing business going than it would be to try to find a replacement for one that has failed.