Floor plan financing gives car dealers the flexibility to grow their business by relieving cash flow issues and acquiring additional inventory. Though this growth opportunity can be exciting, it’s important for dealers to know how to effectively manage their floor plan in order to get the most of it.
Use Tools and Resources Available.
A good floor plan financing partner will offer tools to dealers that help them manage their line of credit. NextGear Capital dealers have access to Account Portal, which provides detailed, real-time account overviews for dealer and auction partners, including a comprehensive dashboard that features analytics and payment history instantly on any device. Account Portal also offers features such as Rapid Pay, Self-Reconciliation and Auto Pay. These tools allow dealers to receive expedited funding, streamline the auditing process, and avoid late payments.
Have an Exit Strategy
Though using floor plan financing can help prevent cash from depreciating, having an exit strategy is important to optimize profitability and avoid incurring additional term plan fees. Knowing the break-even point on a unit by unit basis is crucial to any good exit strategy. It allows dealers to the exact point where profits could turn to loss. Another great component of a solid exit strategy as a part of floor plan financing is knowing specific outlets to sell aged inventory, whether that’s at physical auctions like Manheim or digital platforms like OVE or Manheim Express.
Use a Floor Plan Financing Partner That Understands Your Business
Dealership success relies on more than a line of credit. Dealers that take advantage of the partnership a floor plan financing company provides can often optimize overall dealership operations and profitability. Local representatives can provide additional insights, answer questions and can work to help dealerships manage their floor plan. Potential issues can be avoided when dealers have easy access to their floor plan financing partners.
Dealers who take these tips into consideration can ensure their floor plan is properly managed, and consequently, will likely have a seamless floor planning experience. If you have additional questions about your auto dealer floor plan line of credit, let us know and we’ll connect with you.
Paying attention to these key aspects of floor plan financing can help car dealers in a big way. They will have a seamless experience and have a better chance at seeing impactful results to their business. If you have additional questions about your auto dealer floor plan line of credit, contact us and we will connect with you.