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| Banks not willing to pay to floor |
| General |
| Posted by Kyle Yocky |
| Wednesday, 25 February 2009 21:16 |
|
As the lenders get tighter on flooring finance, dealers are left wondering if they will ever be able to floor new product after they have sold their stock. Some lenders have even dropped out of the flooring section, let alone the whole RV industry. This in turn causes dealers to either close their doors or go with other sources and the problem with that is, the lenders left in turn raise flooring rates because, they know they are the only players in town. With all the flooring problems coming about dealers are even finding ways unheard of before to get money for their business, such as reverse flooring on pre-owned inventory.You see normally a dealer( especially large ones) will own the used inventory out right, which ties up cash. Some dealers are using the used inventory as leverage now to get cash back in their pocket to pay for things like new flooring, payroll, or other business expenses. This just shows you what extent dealers are going to, to get more money, and unfortunatilly this includes layoffs and store closures which accounts for lost income for the employees, their families and lost revenues for the towns / cities they close inn. I hope this down turn doesn't drag on to much longer, but I have a feeling this storm is still in the begging phase. |
