Floor plan financing is a unique form of financing that’s best suited to dealerships, which enable the business to obtain a revolving credit line which is used to purchase goods or vehicles for resale.
Floor plan financing is most common among dealerships and companies that sell big ticket items such as:
- cars, trucks and SUVs
- recreational vehicles
- excavation equipment
- farm equipment
- boats and small watercraft
- modular homes and trailers
- …and beyond.
Dealerships face some unique financing challenges due to the tremendous expense associated with the items that they sell.
A dealership that sells cars or RVs could be looking at an up-front expenditure totaling millions of dollars, just to populate the showroom floor and dealership lot with vehicles to sell.
Used car dealerships face an even greater challenge since there’s a much higher risk associated with pre-owned vehicles.
Most dealerships — especially new businesses — simply don’t have the capital to buy millions of dollars worth of vehicles and that’s exactly where floor plan financing comes in handy!
Floor plan financing entails issuing loans which are issued against a particular piece of collateral — the item that’s being sold. It’s similar to an advance in that when the vehicle sells, the lender is repaid the loan amount, plus interest.
Dealership floor plan financing enables dealers to borrow money using their stock as collateral, but it’s a revolving credit line, so as a debt is repaid, this frees up available credit that can be used to purchase a new vehicle.
At Complete Commercial Finance, we have a great floor plan alternative! With us you get an unrestrictive, revolving line of credit that will enable you to grow your dealership! Contact the friendly experts at Complete Commercial Finance today to learn more about our floor plan financing alternative by calling 860-906-4848.
My best to you always,
President, Complete Commercial Finance
PS – To learn more about the types of loans we secure for our clients, visit the products page on our website.