Floor Plan Financining

The arrangement is most commonly used when large assets such as automobiles or household appliances are involved.

Floor plan financining.

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. Pulled between consumer buying habits workforce challenges competitors economic trends and other concerns successful independent car dealers want a dependable cost competitive floorplan financing provider also known as floor plan financing. 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. Floor plan finance companies are uniquely attuned to the needs of auto dealers.

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

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. 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. However not all inventory finance companies offer retail and dealership wholesale financing options. In many cases floor plan financing is arranged with the financial assistance of a manufacturer s captive lender or the manufacturer itself.

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 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. These floor plan finance formulas incorporated with your turn time can help to make or break your dealership s profitability.