Deal Pack Blog
What are the Benefits of Financing My Inventory (Floor Planning)?
In a word: CASHFLOW! Or is that two words (cash flow?)…either way, it’s the biggest benefit to financing your vehicle inventory (commonly called a floor plan).
Unless you’ve discovered the ever elusive money tree I’ve heard about all my life, you likely need some assistance when it comes to purchasing inventory for your BHPH operation. There are plenty of lenders that are willing to finance the inventory you need to purchase. These are commonly short term loans that are paid back when the inventory is sold.
Do your research and ask a lot of questions to be sure you’re getting the best deal from your lender, and to make sure you completely understand the repayment agreement. While financing your inventory is a great way to get cars on the lot without breaking the bank, it always costs something to borrow money. Here are some questions you should ask when researching potential lenders:
What is the interest rate?
What are the associated fees?
What happens if I’m unable to sell the vehicle?
Does the lender pay me or the auction directly?
Is there a time limit on the repayment plan?
How do I manage my floor planned inventory?
Do I need to insure the inventory against theft or damage?
Once you begin borrowing against your inventory, you may be wondering how to keep track of the ins and outs of new floor plans, curtailments, and payoffs. That’s where your DMS should step in and make the process as understandable and painless as possible. Deal Pack not only accounts for floor planned inventory using real-time, fully integrated accounting, it also provides reports, training, and support. Floor planning at time of purchase? Need to finance a unit after you’ve already purchased it? No problem! Give us a call anytime to learn more!