Define Floor Plan Financing

An auto rv manufactured home etc.

Define floor plan financing. 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 companies are uniquely attuned to the needs of auto dealers. Contrary to common perceptions most car dealers do not pay cash for the. A form of retail goods inventory financing in which each loan advance is made against a.

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. The stands4 network. 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. Floor plan lenders include local and regional banks large national banks and financing companies owned by the manufacturing companies like toyota financial or ford credit.

With floor plan financing you will work with a third party financing institution a floor plan financing company to. As each piece of collateral is sold by the dealer the loan advance against that piece of collateral is repaid. Information and translations of floor plan lending in the most comprehensive dictionary definitions resource on the web. The loans are often made with a one year term and based on an aggregate budget.

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. When each piece of collateral is sold by the dealer the. Meaning of floor plan lending. Floor planning is a form of financing for large ticket items displayed on showroom floors.

This article reviews how you can manage floor plan financing with quickbooks. A floor plan is a method that a business such as an auto dealership can use to finance inventory that they are holding for resale without having to tie up their own capital in that inventory. These loans are made against a specific piece of collateral i e. Floor plan finance options are popular within the automotive industry.

For example a dealer might be able to borrow 10 million over the year to purchase 300. However not all inventory finance companies offer retail and dealership wholesale financing options. Floor plan financing is a revolving line of credit that allows a dealership to obtain financing through sba s 7 a program for inventory that can be titled such as autos rvs manufactured homes boats and trailers. For example automobile dealerships utilize floor plan financing to run their businesses.

Floor plan financing is a revolving line of credit that allows the borrower to obtain financing for retail goods.