The automotive industry is very unique in that it is one of the few industries where commercial loans are abundant and relatively easy to qualify for.
Whether you are just starting, out or you are looking to shift your business into the next gear, it is likely you will be able to find the capital you need to stock your dealership. Although there is a good chance you will be able to acquire a floor plan line of credit, the size of that line of credit will vary depending on your business needs and your overall portfolio snapshot.
Floor Plan 101: The Basics
First and foremost, to qualify for a floor plan you need to have credit. Specifically, you should have a history of utilizing and repaying debt. Bad credit and hiccups on your credit history aren’t always deal-breakers, but they will likely reduce the amount you qualify for. Additionally, there is a good chance that credit issues will have a negative impact on your pricing structure. The good news is that over time, with good performance coupled with adherence to the terms and conditions, you can eventually overcome these setbacks.
It is also important that you are not over-extended. If your credit cards are all maxed out, that is a potential red flag even if you have not paid late. Handling your available credit responsibly is essential, so be sure to maintain a substantial amount of available credit.
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