Floor Plan Financing Terms

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 financing terms. Retailers use a short term loan to purchase inventory items and the loan is repaid as inventory is sold. An auto rv manufactured home etc. Floor plan statements and inventory information available online. Variety of floor plan structures and interest rate options to meet your needs and reduce your interest expense.

Dealer floor plan financing frequently asked questions for borrowers and lenders what is floor plan financing. For example a dealer might be able to borrow 10 million over the year to purchase 300. Floor plan financing is a revolving line of credit that allows the borrower to obtain financing for retail goods. Floor planning is a type of inventory financing for large ticket retail items.

The loans are often made with a one year term and based on an aggregate budget. How does floor plan financing work specifically to benefit auto dealers. Floor plan finance companies are uniquely attuned to the needs of auto dealers. 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.

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. Contrary to common perceptions most car dealers do not pay cash for the. New and used vehicle floor plan financing at competitive rates and terms focused on meeting the needs of new car franchised dealerships. 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.

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