Flooring Finance Definition

It is often referred to in the it industry regarding credit lines for computer equipment.

Flooring finance definition.

What you don t realize is that like most new car dealers a floor plan was used to finance the cars. In addition to freeing up the cash a dealer has on hand other floor plan financing benefits. Retailers use a short term loan to purchase inventory items and the loan is repaid as inventory is sold. A flooring account is a type of short term financing that is used specifically for equipment purchases.

Floor the area of a stock exchange where active trading occurs. Floor plan finance companies are uniquely attuned to the needs of auto dealers. In context of otc interest rate options a series of interest rate put. They are most frequently taken out for periods of between 2 and 5 years although this can vary considerably.

A floor in finance may refer to several things including the lowest acceptable limit the lowest guaranteed limit or the physical space where trading occurs. The dealer then receives payment hopefully including a profit and remits the balance to. 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. 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.

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