Business Finance
A problem most used car dealers will face, especially in South Africa, is how tough it can be to find financingwith terms that work for your used car business. This can be a make or break factor for your used car dealership. Floor plan financing is a great option for used car dealers looking for better financing terms.
What is Floor Plan Financing?
Floor plan financing is a type of lending where a dealer can borrow money against the value of the cars and inventory they have on their lot. This allows dealers to keep more cars on their lot, and offer their customers a wider selection of cars.
Benefits of Floor Plan Financing
There are many benefits of floor plan financing for used car dealers. Some of the most notable benefits include:
- Increased Cash Flow – By financing your inventory through a floor plan lender, you can improve your cash flow by having the inventory financed. This will free up your cash flow to use for other purposes.
- Improved liquidity – A floor plan lender can provide you with the liquidity you need to grow your business. This will help you to expand your inventory and grow your business.
- Improved Credit Rating – A floor plan lender can help you to improve your credit rating by providing you with the financing you need. This can help you to obtain other financing in the future, potentially for larger amounts, such as when you may need to invest in larger premises as you grow.
- Increased Efficiency – A floor plan lender can help you to increase your efficiency by providing you with the financing you need to buy inventory. This will help you to sell more cars and improve your bottom line.
- Achieve Stock Plan Objectives – do you have specific stock plan goals you want to achieve in your used car dealership? Floor plan finance gives you quicker access to cash and gives you the power to make purchase decisions when it comes to acquiring new stock for the floor.
What Finance Options Are Available To Me?
Traditional bank loans or business loans can take too long to be approved and you may miss out on acquiring new stock for your used car dealership floor. Specialised car dealership floor plan finance provided by floor plan financing companies, fast-tracks your application for quicker approvals to give you the purchasing power to acquire stock as and when you need it.
Our finance partners offer a fast-track solution to get up to R150 000 cash in your hands as fast as possible to help you buy stock as you find it. Apply for floor plan finance now.
Business Finance
We all know how the old saying goes…when it comes to running a business, cash is king. Steady cash flow ensures your business can cover it’s overheads while continuing to grow. However, many businesses hit a snag when there’s a lag between forking out cash for overheads and receiving money in from customers. This can limit your ability to expand your business.
There are a number of ways to manage cash flow issues and ensure a steady stream of cash entering your business at all times.
1. Cash flow projections
Every business should put together cash flow projections as part of their annual budget. If your business is seasonal and has a few months where there tends to be a lull in business, cash flow projections can help you prepare and plan for dry spells.
2. Get paid sooner
Sometimes the issue is not a lack of sales but payment terms or customers who try stall paying. There are some simple ways you can try get paid faster which include:
- Early settlement discounts (e.g. 5% off when settling in 7 days)
- Take deposits at order placement if lead times are longer
- If customers don’t pay cash up-front, run a credit check before taking them on as a client.
- Put old stock on sale to try get rid of redundant inventory
- Send out invoices promptly and send frequent reminders
- Charge interest on late payments, ensure this clause is in your T’s and C’s.
- If the same customers tend to always pay late, change your terms to cash on delivery for any future dealings with them.
3. Get Smart About Overheads
It’s important to try and get most of your money in BEFORE your expenses are due to be paid out. If suppliers offer 30 day terms, don’t pay on day 15…pay on day 30 once you know most of your income will have hit your account.
If you can, pay your bills using a company credit card. Many offer up to 55 days interest-free which means you’re up to date with your suppliersand you’re not stretched financially. It’s important to stay in their good books. If you ever foresee payment having to be made late, let them know well in advance so they too can manage their cash flow.
4. Unsecured Business Loans
Sometimes even with fine-tuned cash flow projections, chasing payments and carefully managing overheads, businesses still run into cash flow issues. Nobody predicted the Covid-19 pandemic while budgeting last year, for example and despite their best efforts, many business owners find themselves in need of cash, NOW!
The quickest way to get business bridging finance is through an unsecured business loan. You can get access to a cash loan of between R50 000 up to R5 million in as quickly as 1 business day! There’s no easier way to get cash back into your business than by applying for an unsecured business loan with NHFinance. With flexible loan terms and fair interest rates, you can get the cash you need to pay your overheads fast!
5. Direct Debits
Subscription-based businesses or businesses that collect recurring payments often struggle to find ways to collect their payments effectively. One cannot rely on customers making manual payments as they try to skip payments or simply forget to do the EFT. This makes it very hard to manage your cash flow and grow your business as you never know what you’re going to be getting in. It doesn’t have to be this way, however. Businesses accepting recurring payments can sign up for direct debits to automate the process of collecting payments from customers on a set day every month. This eliminates the hassle for the customer and makes your income far more predictable. This solution is perfect for:
- Web hosting providers
- IT services
- Short-term finance companies
- Telecommunications companies
- Gyms
- Subscription-based businesses
- Etc