Negatives Of Retail Floor Plan Financing

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.
Negatives of retail floor plan financing. For over 50 years triad financial services inc. These loans are made against a specific piece of collateral i e. Triad financial services inc. Contrary to common perceptions most car dealers do not pay cash for the.
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. Let s say you make a profit of 3 000 per car sold. Has provided extraordinary service in manufactured home lending to help home owners reach their dream. An auto rv manufactured home etc.
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. 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. 1616 and a representative will be in touch with you soon. Retailers use a short term loan to purchase inventory items and the loan is repaid as inventory is sold.
Retail floor planning also referred to as floorplanning or inventory financing is a type of short term loan used by retailers to purchase high cost inventory such as automobiles these loans are often secured by the inventory purchased as collateral. Floor plan finance options are popular within the automotive industry. To learn more about our dealer floor plan financing program call us at 1 800 522 2013 ext. Floor planning is commonly used in new and used car dealerships.
The straight floor plan makes optimum use of the walls and utilizes the space in the most judicious manner. Floor plan financing is a revolving line of credit that allows the borrower to obtain financing for retail goods. These floor plan finance formulas incorporated with your turn time can help to make or break your dealership s profitability. However not all inventory finance companies offer retail and dealership wholesale financing options.
When each piece of collateral is sold by the dealer the. How does floor plan financing work specifically to benefit auto dealers. Floor planning is a type of inventory financing for large ticket retail items. 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.
The straight floor plan creates spaces within the retail store for the customers to move and shop freely. It is one of the commonly implemented store designs.