Floor Plan Financining

For example automobile dealerships utilize floor plan financing to run their businesses.

Floor plan financining. Floor plan financing is also done for large appliances mobile homes and boats among other items and these products are usually sold to consumers with a financing contract. How does floor plan financing work specifically to benefit auto dealers. Floor plan finance options are popular within the automotive industry. However not all inventory finance companies offer retail and dealership wholesale financing options.

Loan repayment arrangements under a floor plan loan facility terms are often linked to a pay as sold agreement or according to a specific schedule. The arrangement is most commonly used when large assets such as automobiles or household appliances are involved. The business of selling used cars successfully is a balancing act. The dealer then receives payment hopefully including a profit and remits the balance to the lender who in turn releases the title to the car to the new purchaser.

While some lenders are unable to properly serve independent dealers nextgear capital has proudly served the independent dealer market for over ten years our floor plan financing options allow dealers to finance nearly any. Using cash or a bank line of credit to purchase inventory can work for some car dealers but many floor plan financing companies offer a variety of dealer specific benefits. Let s say you make a profit of 3 000 per car sold. Floor planning is a form of financing for large ticket items displayed on showroom floors.

If your holding cost per day per unit is 44 63 and your turn time is 60 days you will spend 2677 of your profit holding on to a non selling car. Floor plan finance companies are uniquely attuned to the needs of auto dealers. Floor planning is a method of financing inventory purchases where a lender pays for assets that have been ordered by a distributor or retailer and is paid back from the proceeds from the sale of these items.