Flooring Finance Definition

They are most frequently taken out for periods of between 2 and 5 years although this can vary considerably.

Flooring finance definition. A flooring account is a type of short term financing that is used specifically for equipment purchases. In context of interest rates a level which an interest rate or currency is structured not to go below. Also the price at which a stop order is activated when the price drops low enough to activate such an order. Simply it is a way for an auto dealer to use a lender s funds to finance the cars and until each of them is sold the lender holds title to the cars.

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. In addition to freeing up the cash a dealer has on hand other floor plan financing benefits. In context of otc interest rate options a series of interest rate put. The dealer then receives payment hopefully including a profit and remits the balance to.

Floor planning is a type of inventory financing for large ticket retail items. Floor the area of a stock exchange where active trading occurs. It is often referred to in the it industry regarding credit lines for computer equipment. Retailers use a short term loan to purchase inventory items and the loan is repaid as inventory is sold.

What you don t realize is that like most new car dealers a floor plan was used to finance the cars.