Flooring Finance Definition

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.

Flooring finance definition.

In addition to freeing up the cash a dealer has on hand other floor plan financing benefits. Also the price at which a stop order is activated when the price drops low enough to activate such an order. What you don t realize is that like most new car dealers a floor plan was used to finance the cars. The dealer then receives payment hopefully including a profit and remits the balance to.

It is often referred to in the it industry regarding credit lines for computer equipment. Floor planning is a type of inventory financing for large ticket retail items. Floor plan finance companies are uniquely attuned to the needs of auto dealers. An interest rate cap is a derivative in which the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price an example of a cap would be an agreement to receive a payment for each month the libor rate exceeds 2 5.

Floor the area of a stock exchange where active trading occurs. In context of interest rates a level which an interest rate or currency is structured not to go below. In context of otc interest rate options a series of interest rate put. A floor in finance may refer to several things including the lowest acceptable limit the lowest guaranteed limit or the physical space where trading occurs.

Retailers use a short term loan to purchase inventory items and the loan is repaid as inventory is sold.