Ford Motor Co. is adding to its minority-dealer ranks through a program designed to help dealers and individuals with dealership management experience to buy Ford and Lincoln stores.
Three minority dealers were awarded new or additional stores this year under the Ford Capital Loan Investment Program, which was unveiled in 2012. It is up to candidates to find a store to buy, arrange the deal and bring it to Ford. If Ford approves a deal, candidates pay 20 percent or more of the dealership cost, a Ford spokeswoman confirmed.
After putting up his or her share, the purchasing dealer takes out two loans from Ford Motor Credit Co.: one secured by the dealership's assets and a second unsecured, subordinated, loan to finance the rest.
The program is structured for the secured loan to be paid off first. The second loan then is refinanced and converted into a secured loan. The borrower doesn't begin to pay off the principal on the second loan until the first loan is paid off.
"The goal is not to burden the dealership with too much debt at one time," the spokeswoman says.