Credit crunch a crazy quilt of circumstance

If you want to see what a credit crunch looks like, head south on Indiana State Road 19 out of Elkhart — past the strip malls, bank branches and restaurants to the still-beating heart of “the RV Capital of the World.”  There, scattered along a 2-mile stretch of Nappanee Street, you’ll find a ragtag assortment of RV dealerships that are in many ways symbolic of the nation’s crazy-quilt lending landscape.

One has lost the battle for survival after its credit lifeline was pulled, as its vacant showroom attests. Others are hanging by a thread, trying to outlast an RV industry downturn that has been exacerbated by a lack of credit for manufacturers, dealers and customers. Still others contend that their credit problems have largely disappeared and that business has picked up substantially in the last few months.

The availability of credit, it seems, depends largely on perspective.

For the owner of Elkhart County RV, the situation remains “brutal,” following the sudden withdrawal of big national banks from what’s known as the floor plan financing market.

“I cannot buy any new product unless I use my own money,” said Tony Gaideski, who is down to seven units and can’t secure financing to purchase more RVs. “None of the banks in this town will lend me money, and I don’t know anywhere in the country where anybody is doing any financing for RVs. “

Just up the road, however, Rob Reid, president of Great Lakes RV Center, said he still has the same $3 million floor plan credit line he had before the recession. He said his biggest problem is getting would-be buyers qualified for loans.

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“The biggest thing is retail credit,” he said.  “They have to start giving the customers money to buy. That’s what’s going to get the whole thing going again.”

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A block to the south, International RV World General Manager Dave Titus said business at the company’s three lots in Elkhart, northern Michigan and Florida is up 15 to 20 percent this year. That’s in part due to decreased competition, he said, but also because his company never relied on lenders to buy inventory.

“We planned ahead for a slow time,” he said. “A lot of businesses didn’t .”

Some in the industry see opportunity in the chaotic credit situation.