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Harley-Davidson Gets $350 Million 364-Day Credit Facility to Bolster Liquidity

Harley-Davidson LiveWire Motorcycle

To Cope With Challenges

Harley-Davidson is a massive company and a lot of its assets are tied up. This means there might not be as much liquidity as the business would always like to have. To combat this issue, Harley recently took steps to get $350 million 364-day credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Auto Finance News reported on this fact. I first noticed the headline from Visordown, but that story is no longer accessible for some reason. That story listed the $350 million credit as a “survival loan,” which isn’t really accurate, so I suspect the article had a few issues and was pulled.

According to the report from Auto Finance News, Harley has committed to drawing $150 million on the new line of credit. This means Harley will be able to use that $150 million to do what it needs to in its business. A line of credit like this is a revolving credit that runs 364 days. After that one year cutoff, banks must reserve capital against unused amounts under revolving credits, according to MoneyWords.

It’s not a huge surprise to see Harley using some credit. The business generates tons of revenue, but it has suffered losses for many months. Also, much of the company’s money is tied up in assets, and that means it can use this credit to operate the business as it needs.

This does perhaps indicate a cash-flow issue for Harley, which is not a good sign. There are many people who see Harley’s tough spot as the end of the road, but I think Harley still has a lot of life left in it. The business needs to do a lot of work, and this recent development doesn’t instill much confidence.

  1. It’s not good, but it keeps th NGOs going for awhile. I’m really looking forward to their new water cooled models, the cafe racer and flat tracker prototypes they showed looked very promising. I also hope the Bronx is competitive in price and performance, or at least in the right neighborhood. If it is, I think it’ll sell well. The biggest challenge continues to be that dealers only seem to want to sell baggers; if they hire some younger, non-Harley salespeople to talk to customers for these newer bikes, I think they’ll sell a lot of them. Of course, this is highly dependent on the pricing strategy being competitive.

  2. Baggers are what sells. Ask Indian, Yamaha, Kawasaki…What’s the common denominator with those brands? They all have parent companies. They can shift debt around as the motorcycle industry takes a down turn. HD is a motorcycle company. Some diversity of models would be nice, but not something you venture in to when you need to tighten up the shop.

  3. I’ll never understand why a company that has 5.3 BILLION in sales each year is always considered to be in trouble. Seriously. Yamaha has only 72% of revenue that Harley produces and not a peep that Yamaha is facing a downturn. Come on guys….yes Harley can do better on appealing to a younger crowd. Some of their price points like the Livewire are higher than say zero. As a Livewire owner, I understand why. The tech in the Livewire surpasses that of zero. You get what you pay for.

    1. I don’t think they’re at risk of going away completely, but Harley is at risk of seeing its place in the world of motorcycles disappearing, and with it, the vast majority of its sales and revenue. Harley has a branding problem as much as a product-market-fit problem. They are in trouble, but they have plenty of ways to turn things around at this point. I just don’t see them doing it. I think we’re watching the slow and painful decline of a great American brand, which sucks.

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