NextGear Capital Process

Report
1
Dealer Funding
Introductions
Bob Earle
Regional Director, South Atlantic
NextGear Capital
[email protected]
330.353.6724
nextgearcapital.com
Bob is responsible for the management and oversight of all aspects of NextGear Capital’s
business in the South Atlantic Region, including the hiring and training of Account and Sales
Executives. Bob has more than 25 years of experience within the finance industry serving in
numerous capacities with both Chase and Citigroup prior to joining Dealer Services Corporation
in 2006.
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Dealer Funding
Introductions
Janet Hendrixson
Regional Director, Mid Atlantic
NextGear Capital
[email protected]
615.314.9049
nextgearcapital.com
Janet is responsible for the management and oversight of all aspects of NextGear Capital’s business
in the Mid Atlantic Region, including the hiring and training of Account and Sales Executives. Janet
joined NextGear Capital in June 2013 and has more than 23 years of experience within the
automotive industry, serving in numerous leadership capacities with Manheim at both the auction and
corporate level.
3
Introduction
Who is NextGear Capital?
• The most comprehensive and innovative provider of lending
products for dealers
• Serving more than 17,000 independent dealers across North
America
• NextGear Capital account representatives make 1,200 dealer visits
each day and interact with over 90,000 dealer phone calls each
month
• NextGear Capital will floor plan approximately 30,000 transactions
from independent auctions each month!
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Lending Providers
National
5
Lending Providers
Regional
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Floor Plan Financing
Floor Plan 101
A floor plan is comprised of the following:
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•
•
•
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Line of Credit Amount : Credit approved amount for dealer to finance.
Rate: Interest rate charged on the active line of credit.
Term: Length of time a unit can be floorplanned.
Fee: The charge associated with the flooring of the unit.
Reduction amount: principal reduction amount made by the dealer as vehicle
ages past the purchase date.
All of the above are factors determined through the Credit and Lending
process.
• For example, the greater the credit risk, the lower the line of credit.
• Also, a longer fee may correspond to an increased rate.
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Floor Plan Financing
Value of Floor Planning
for the Dealer
8
Floor Plan Financing
Ever heard the term…
“I was so successful selling cars that
I went out of business.”
Why does that happen?
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Floor Plan Financing
Value of Floor Planning for the Dealer
It happens because every time a dealer sells a car, they
are out of pocket that money until they are paid by the
customer’s lender, which can take weeks
The more cars a dealer sells, the more cash flow he needs
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Floor Plan Financing
Value of Floor Planning for the Dealer
• Assume the average cash deal is $7,000 and average sales are 8
cars per week
• Each week, the cash flow needs are $56,000 ($7,000 x 8) just for
inventory
• If the customer’s lenders don’t pay for two weeks after the sale, the
dealer will need $112,000 in cash ($7,000 x 8 x2) in their business
just to cover cars, not to mention payroll and other expenses
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Floor Plan Financing
Value of Floor Planning for the Dealer
• If the dealer successfully grows his sales to 10 cars per week, they
would need $140,000 in cash ($7,000 x 10 x2)
• That is another $28,000 for selling two more cars per week
• That is why growing sales takes money!
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Floor Plan Financing
Solutions floor planning has to offer the dealer...
• Floor planning is the answer to his real issue; it will provide the cash
flow to grow the business and not stretch the dealer to make payroll
or buy at the next auction
• Floor planning provides the ability to buy at the next auction and keep
the lot full
• Floor planning can improve cash flow and help grow sales
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Relationships
Importance of Relationships
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Relationships
What to look for in a relationship?
Trust
• The best relationships are the ones where both parties work to develop trust
• Trust builds confidence in each party
Transparency
• Being open and upfront about goals on both ends
Knowledgeable
• Lenders have a wealth of knowledge in the industry
Anybody can shake somebody’s hand and ask them about the weather, but to
have a true understanding and investment in somebody’s success is what truly
defines a relationship.
15
Relationships
How do relationships benefit auctions?
Continued business
• Better relationships = more returning customers
Staying ahead of the game
• The right relationship keeps you up-to-date on the latest industry
trends
More assistance
• Greater access to more sources
16
Value for Auctions
How Floor Planning Translates to
Value for Auctions
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Value for Auctions
What challenges do auctions face?
• Dealers not having funding
• Slow payment
• Difficulties in flooring
• No assistance available
• No marketing
• Decline in business
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Value for Auctions
Benefits of Floor Planning
Guaranteed funds via ACH
Easy to use technology
• Mobile bidding, AuctionACCESS, etc.
Title-absent funding available
Ability to view dealer credit availability via multiple platforms
• Eliminates the middle man
NextGear Capital Process
• Universal Source Network
• 17,000+ dealer base with proven purchasing power
• State-of-the-art service center staffed with fully trained personnel
• 24-hour virtual online access
Biggest takeaway: Integration opportunities allow for a more streamlined process
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Floor Plan Financing
What does floor planning mean for your
auction?
• All in, what % of your auction volume is financed by a third party
finance company?
• How has floor planning helped your auction maximize cash flow?
• What amount of your auction receivables carry over one week post
auction sales?
• Has floor planning helped reduce auction collection issues – i.e. late
pays, NSF’s?
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Contact Us
Questions?
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