The federal Business Development Bank of Canada (BDC) has put up $300 million to help Case IH and New Holland dealerships across Canada finance purchases of equipment for their lots.

BDC on Tuesday announced it's bought $300 million in dealer floorplan receivable-backed notes from CNH Capital Canada Wholesale Trust, a securitization trust operated by the Canadian wing of CNH Capital, the financing arm of Case and New Holland's parent firm.

Floorplan financing is used to finance retailers' purchases of inventory such as machinery, vehicles, large home appliances and furniture. Because a lender doesn't have full control over the floored items, a floorplan lender generally assumes a greater exposure to risk than in other types of financing.

In this case, BDC's funds are mainly to be used by licensed CNH dealers across Canada to finance the purchase of both new and used farm and construction equipment and parts, pending the items' sale to end users.

Proceeds may also be used by dealers to purchase equipment for either their rental businesses or rent-to-own programs, BDC said in a release.

"We are pleased to access the Canadian government's CSCF program and appreciate it, above all, as a significant source of funding to our agricultural and construction equipment dealers at a time when credit markets are still regaining their full vitality," Steve Bierman, CNH Capital's president and CNH Global's interim CFO, in BDC's release.

"We have worked closely and diligently with industry participants and issuers such as CNH Capital and are pleased to reach this important milestone," Paula Cruickshank, BDC's vice-president of securitization, said in the same release.

"This transaction demonstrates the value of the CSCF and validates recent changes made to the program parameters," she said. "We are seeing strong interest in the program and are working on additional transactions that will further enhance the availability of financing for the sale of vehicles and equipment in Canada."

BDC, wholly owned by the federal government, is meant as a vehicle to deliver delivering financial and consulting services to Canada's small- and medium-sized businesses, with a particular focus on the technology and export sectors.