How to obtain stocking funding

[Nick M.K. 574]

12 minutes ago, trade vet said:

But again if you were financing 60 cars

I have 7 on this plan at the moment out of 16 in stock. Usually I have 4 or 5 but of higher value. 

[trade vet 702]

1 hour ago, David Horgan said:

Friend of ours went with Next Gear stocking ,but this comment can apply to all stocking plans I would imagine .

He said it was a drug and it got him in trouble . 

A guy from a Finance company also told me  its a very dangerous practice too and he saw lots of failures because of it .

Its how you manage it that's the secret , too many potentially good  guys have gone because it got out of control and left them broke or close to it . 

The guy above told me he lost direction of everything and had to borrow from the bank to sort it , two years of grief , and a large loan later hes still deep over his head . 

All the companies put it over very well  but the hidden costs are quite high when its looked at in detail I've been told 

Has its uses i suppose but what happens when interest rates go UP is that going to be profits DOWN time or break even , or god help a loss situation . Is stock funding popular now because of low interest rates and will it change the outlook when rates go North , 

 

Whatever you do keep a very tight reign on the finances if choosing borrowed money when rates are low . Cant see it staying this way forever and then the Shite hits the fan .

 

Little and often I was taught , slower but safer and loads more lucrative long term , suited me , but we are all different .

Just stay safe and in control would be my thoughts .

Trouble is the failures will never be posted on a forum will they , only the good news , but the good news guys are probably very good at remaining cool calm and collected with a 100 k of some one else's money and very good at money management , the failed businesses wont say a word about their experiences , cant blame them mind .

 

You can see how people get into trouble.I spoke to 2 proper trade guys just last week and they both had the same problem.They had put heavy stuff on pitches SOR and it turned out both these dealers had then put them on their stocking plan.Both dealers subsequently defaulted and their stock was lifted and entered in the block.This included the ‘sale or return’ vehicles.

What a mess to try and get out of.

[NOACROSS 414]

 

14 minutes ago, trade vet said:

You can see how people get into trouble.I spoke to 2 proper trade guys just last week and they both had the same problem.They had put heavy stuff on pitches SOR and it turned out both these dealers had then put them on their stocking plan.Both dealers subsequently defaulted and their stock was lifted and entered in the block.This included the ‘sale or return’ vehicles.

What a mess to try and get out of.

Same stories circulate from time to time with SOR cars not being paid for when sold to be fair. And you need a purchase invoice to load on to the facility so I’d have thought that story is more that they didn’t get paid rather than it being on the facility. 

Maybe they didn’t get paid because the place went pop (and the provider also collected their stock) and the SOR stock has just been sold and has nothing to do with the stocking plan people. 

[trade vet 702]

1 hour ago, EPV said:

If you had managed to get yourself to a 60 car pitch doing 10 a week I don't see how you would need a fund. If you had managed to get yourself to a 60 car pitch doing 8-10 a week WITH a stock fund then you wouldn't need advice off anyone else that's for sure.

If you have a 60 car pitch for example,all your expenses are multiplied so in reality it is possible you might have to do 7 per week to stand still even without stocking debt.

[NOACROSS 414]

Just now, trade vet said:

If you have a 60 car pitch for example,all your expenses are multiplied so in reality it is possible you might have to do 7 per week to stand still even without stocking debt.

As Nick says-you don’t need to use all your facility and you clearly need to have a good ratio of owned and funded stock but yes, if you went mad and sales went patchy, you could be asking for a spaning unless you had cash reserves etc. 

(Spanking even) Edit button!

[Arfur Dealy 823]

On 1/13/2019 at 9:06 AM, Row said:

I don't think many on here would be walking back into any job !

No chance, hell would freeze over before I would be someone else's bitch....

[trade vet 702]

6 minutes ago, NOACROSS said:

 

Same stories circulate from time to time with SOR cars not being paid for when sold to be fair. And you need a purchase invoice to load on to the facility so I’d have thought that story is more that they didn’t get paid rather than it being on the facility. 

Maybe they didn’t get paid because the place went pop (and the provider also collected their stock) and the SOR stock has just been sold and has nothing to do with the stocking plan people. 

Both guys provided invoices stating that the title to the goods did not pass from them until they were paid for.Maybe their invoices were fraudulently altered by the dealers to get them on their stocking plan.I will try and find out a bit more.

[CCC 31]

Close Brothers model is a good one. They lend you money to buy an asset that you sell on their behalf to a customer, thus they make a small amount from the dealer and a large amount from the customer at relatively neglibkd risk to themselves. Their shares are recommended buy and you can see why.

In business there’s a world of difference between borrowing sensibly to leverage a proven business model and borrowing heavily to give something unproven a go. I’m sure start slow and build using the mix of finance and cash that you sleep at night with would be my choice.

[Rory RSC 596]

Stock funding is a big drain on cash flow if you have to much. If you go from having ten cars in stock owned outright to twenty and suddenly 50% are funded then your stocking plan covers buying them but its down to you to pay to have them back, painted, mechanically prepped, valeted, advertised etc and all those costs add up across another 10 cars and can be a bit of a drain. 

Its down to being disciplined and managing your finances efficiently which is critical in any business. 

[Dave2302 387]

15 hours ago, CCC said:

Close Brothers model is a good one. They lend you money to buy an asset that you sell on their behalf to a customer, thus they make a small amount from the dealer and a large amount from the customer at relatively neglibkd risk to themselves. Their shares are recommended buy and you can see why.

In business there’s a world of difference between borrowing sensibly to leverage a proven business model and borrowing heavily to give something unproven a go. I’m sure start slow and build using the mix of finance and cash that you sleep at night with would be my choice.

 

2 hours ago, Rory RSC said:

Stock funding is a big drain on cash flow if you have to much. If you go from having ten cars in stock owned outright to twenty and suddenly 50% are funded then your stocking plan covers buying them but its down to you to pay to have them back, painted, mechanically prepped, valeted, advertised etc and all those costs add up across another 10 cars and can be a bit of a drain. 

Its down to being disciplined and managing your finances efficiently which is critical in any business. 

Exactly these