Floor Plan and Inventory Finance Funds
Fund formation for lenders financing dealer inventory and other specialty loans
A revolving book of loans, run from a fund
Floor plan lending, financing a dealer's inventory until each unit sells, is a specialized, high-volume form of secured lending. Running it from a fund means investors share in a revolving book of short-term loans rather than a single facility, and the fund needs documents that match: a credit policy investors can understand, reporting on the collateral, and a structure that handles constant draws and repayments. The same approach works for other specialty lending strategies, such as equipment finance, receivables and merchant cash advance funds.
We form inventory finance and other specialty lending funds and advise on the lending, licensing and investor issues that come with them.
What is a floor plan finance fund?
A floor plan finance fund is a private fund that lends to dealers and distributors so they can hold inventory, most often vehicles, equipment or appliances, with the inventory itself as collateral. Each unit is financed when it arrives and repaid when it sells, so the fund's loan book turns over continually. Lenders protect themselves with security interests in the inventory, periodic audits of the dealer's stock, and curtailment schedules that require paydown on units that sit too long. Investors earn a return from the interest and fees on the revolving book.
What we do
• Form the fund and its management entities
• Draft offering documents that describe the credit policy, collateral and audit process
• Advise on secured lending compliance, UCC filings and state licensing
• Prepare master financing agreements and dealer documentation
Financing dealer inventory?
Tell us about your dealers, your volume and your investors, and we'll propose a structure and a flat fee. Or call +1 (202) 556-4455.