In addition to freeing up the cash a dealer has on hand other floor plan financing benefits.
Flooring finance definition.
The dealer then receives payment hopefully including a profit and remits the balance to.
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.
They are most frequently taken out for periods of between 2 and 5 years although this can vary considerably.
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.
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.
A flooring account is a type of short term financing that is used specifically for equipment purchases.
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.
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.
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.
In context of otc interest rate options a series of interest rate put.