Archive for the ‘Floorplan Financing’ Category

What is Floor Planning? aka Floor Plan Financing

Short-Term Financing Generally speaking, floor planning is a term used for financing inventory in retail operations. Regarding vehicle dealerships, floor planning is specifically involved in the short-term financing of inventory. Lenders typically provide funding for an amount of time (usually 30-90 days) for each vehicle on the dealer’s premises. The vehicle title acts as the primary collateral and the most common practice for floor plan lenders is to be in physical possession of the title until the loan is repaid. Typically, rates and fees applicable in this lending field are high because of transaction costs and collateral risk.

Industry There are a number of national companies that dominate the industry with relatively few lenders offering programs at a local/community level. While banks have engaged in this type of lending in the past, most internal procedures are unsuited for managing collateral on a per entity basis. These banks have traditionally opted for line-of-credit relationships with franchised dealers without the ability or software to track individual titles and collateral items, thus increasing risk.  Furthermore, the propensities towards banking consolidation and other industry changes have further distanced banks from this local lending concept.

Local Opportunity We believe Dealers First Affiliates and its Tirekicker^TM software effectively demonstrates a viable means of entry into this market for great investment returns. Our business model offers a simple and fair way of doing business and encourages strong relationships with local businesses. Our computer software provides both lender and client with concise, pertinent information and can enable you to create a highly competitive profit center.

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Who is Dealers First?

Dealers First Financial, Inc.

Dealers First Financial was founded in 1998 to provide floor plan financing to independent car dealers in western North Carolina and upstate South Carolina.  There was no software that could be purchased to manage the new company, so the company developed proprietary systems to manage its floor plan financing operation.  Thus, the system is a culmination of 11 years of development and active use, having completed almost 40,000 vehicle transactions.

Several years ago, we came to the conclusion that there was still no adequate software available.   Further enhancements to our system, enabled the software to be web-based and accessible to the floor planner and its individual dealers. This level of accessibility distinguishes this program apart from potential competition.  This web interaction minimizes mundane tasks and allows the dealer/customer to access his account information as to best manage its inventory and its relationship with the floor plan company.

Dealers First Affiliates, Inc.

Dealers First Affiliates licenses a software product named Tirekicker ™ but more importantly provides training, education and consulting to floor plan financing operations.

Dealers First Affiliates was created in 2008 in order to make its software product, Tirekicker ™, and consulting services available to other lending institutions and Individual Investors.  This entity currently services a profitable business providing a unique and valuable service in its community.

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Diana Kurylko
Automotive News Europe
March 23, 2009 06:01 CET

MAHWAH, New Jersey — Jaguar and Land Rover executives say they are guiding dealers to alternative sources of floorplan financing, but those who are not approved by Chase Auto Finance ultimately are on their own.

Ford Motor Co., which sold Jaguar and Land Rover last June to Tata Motors for $2.3 billion (about €1.5 billion at the time of the sale), will stop inventory lending to the brands through Ford Motor Credit on June 1.

Since January, Chase has been providing retail financing for Jaguar and Land Rover dealers but is handling floorplan financing with dealers on an individual basis.

Sharon Corrigan, vice president of retail operations for Jaguar Land Rover NA LLC, said dealers must “come to terms with and find their sources” of inventory financing.

Jaguar and Land Rover have 174 franchises each. A company spokesman said that only 80 were relying on Ford Motor Credit for credit.

“Of those, 52 have not yet achieved a new source of finance, and they are all working with other sources, including Chase,” the spokesman said in an e-mail. “We know banks that are lending money, and we are providing [the names of] those banks to dealers.”

In interview last week, top Jaguar and Land Rover executives said “virtually all,” dealers will find inventory financing.

Their optimism isn’t shared by the National Automobile Dealers Association. Last month, NADA asked the government to consider loan guarantees for dealer inventory financing.

“Even creditworthy dealers are having trouble finding access to any floorplan financing, or the financing available to them is being offered on terms that are not competitive and not commensurate with the risk,” according to an NADA fact sheet.

NADA says the average floorplan loan is about $4.9 million.

Full Story at Automotive News

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By Nick Carey

LANSING, Mich., March 22 (Reuters) – Deep in the last stronghold of the struggling U.S. auto industry, Rosario Criscuolo says he owes the survival of his business to Toyota Motor Corp (7203.T).

“If it weren’t for Toyota, I’d be gone,” said the owner of Spartan Auto Group, which runs three auto dealerships selling Toyota, Lexus, Infiniti, Volkswagen (VOWG.DE) and Mazda brand cars. “Without them I’d be selling papers on the corner.”

To fund the $25 million worth of gleaming new cars at his showrooms, including here in Michigan’s capital, Criscuolo needs floorplan financing, or inventory loans.

Floorplan financing is the lifeblood of U.S. auto dealers because it allows them to pay for vehicles when they take delivery and carry them until they find a buyers. Full Article at Reuters

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Here is a great story about a small local dealer beating the odds, it was built in 1933 with a $500.00 loan. Dealers First Financial has the tools and training to assist an investor with providing local merchants with inventory financing.

Look at where the GDP was at that time, Makes you wounder where Mr. Schumacher got his loan…