Chrysler Financial May Halt Dealer Loans Following Wave Of Cash Requests
According to reports from Bloomberg, Chrysler LLC's financial unit said it may temporarily halt loans to dealers used to buy vehicles, or floorplan, following a wave of requests to pull money from a cash management account.
In a letter to dealers, Chrysler Financial said dealers have been withdrawing up to $60 million a day from the cash management account. They have pulled out more than $1.5 billion since July. It appears dealers fear Chrysler will have to file for bankruptcy and don't want to lose access to the money.
Dealers put money into the account to pay off loans early. They get a 2% bonus if the cash stays in the fund for a set period of time, while still being able to pull it out and make scheduled repayments instead.
Chrysler auto dealers said if floorplan is not available it will be a "disaster."
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