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Establishing a line of credit can be an anxiety-ridden process, for people and businesses alike. This can be helped when the lending institution is one that has proven itself trustworthy to you in the past. Or, if you yourself are the end customer, it would be helpful to know that the dealer you are purchasing from utilizes the same lending institution’s services. This is the reason why powersports dealers should consider ‘one-stop’ financing solutions – lenders who will take care of their showroom/inventory loans in addition to their rider’s purchases.

 

 

A loan is a financial instrument which works as such: you (or your company) want(s) an asset but do(es) not currently have sufficient funds to purchase it, so you go to a lending institution who gives you the amount you need under an agreement stating that you will pay them back, in increments. Certain loans carry additional costs if you fail to make a payment by the agreed upon time, and some loans have an option for you to buy the rest of it out in one lump sum. Loans are useful for powersports dealers whose margins are thin, because during some business cycles they may not have a sufficient amount of capital to stock up on enough motorcycles/ATVs/UTVs to meet customer demand.

 

When you agree to take out a loan, there are usually many different options to choose from in terms of interest rates and payment schedules. Plus, you may have to negotiate. Since they will more likely be familiar with their loan options and more comfortable negotiating with their broker team, going with a one-stop financing solution (rather than working with multiple lending institutions – one for their showroom/inventory loans and one for their customers’ financing needs) is safer for powersports dealers. Furthermore, it is more convenient. Since the dealer itself would be a customer of the lending institution, it will be easier to convince customers who are interested in financing to go with the provider.