Floor Financing Agreement

Floor planning is a type of inventory financing for large ticket retail items.

Floor financing agreement.

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. This agreement means the floor plan financing agreement. Interest rate floors are utilized in derivative. They are most frequently taken out for periods of between 2 and 5 years although this can vary considerably.

An interest rate floor is an agreed upon rate in the lower range of rates associated with a floating rate loan product. These loans are made against a specific piece of collateral i e. 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. Capitalized terms used in this agreement and not otherwise defined are used with the meanings set forth in schedule i any undefined terms shall have the meaning as set forth in the alabama uniform commercial code.

How does floor plan financing work specifically to benefit auto dealers. This dealer floor plan and security agreement the agreement is made as of september 28 2007 by and among fountain dealers factory super store inc a north carolina corporation borrower regions bank an alabama state banking corporation together with its successors and assigns lender fountain powerboats. Dealer floor plan and security agreement. Avangard a corporation organized under the laws of the state of pennsylvania having its principal place of business at 2708 commerce way suite 300 philadelphia pa 19154.

Floor plan financing is a revolving line of credit that allows the borrower to obtain financing for retail goods. What you don t realize is that like most new car dealers a floor plan was used to finance the cars. Floor plan finance companies are uniquely attuned to the needs of auto dealers. 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.

Retailers use a short term loan to purchase inventory items and the loan is repaid as inventory is sold. The dealer then receives payment hopefully including a profit and remits the balance to. This agreement made this 13 th day of february 2012 by and between avangard auto finance inc. In this agreement we us and our mean regions bank you and your mean the borrower.

And autosource enterprises inc. When each piece of collateral is sold by the dealer the. If the same collateral is being used to support more than one loan there is likely a problem that needs to be addressed by changing the collateral description.