5 Things You Didn’t Know About Floor Plan Lending

While many dealers have heard about floor plans, they might think that they operate in a similar style to a local lender or a traditional financial institution by simply offering lines of credit. However, floor plan lenders know that independent dealers have unique needs and have designed their floor plans with that in mind by providing additional tools and services to help support their whole business. Here are 5 things you may not know about floor plan lending:

  1. Increased Flexibility – With additional cash flow, you have the flexibility to be agile. Do you need to quickly meet the demand of your customers, or do you want to try stocking your car lot with different types of vehicles? Working with a floor plan lender provides you with collateral and market insights so you can make quick changes when needed.
  2. Financing Designed for Dealers – Traditional loans are typically structured with rigid terms and don’t take into the consideration the needs of a specific business. Floor plan lenders like NextGear Capital have created different types of term plans. Whether you’re new to the independent dealer space, specialize in carrying lower priced inventory or are looking for lower principal reduction payments, you’ll be able to select the plan that best fits your needs.
  3. Account Management – Do you get tired of spending hours tracking down your titles after an auction sale? When you choose a floor plan lender that offers products like NextGear Capital’s Account Portal, you’ll have access to tools that can help you manage different aspects of your dealership like audits and title management, saving you time so you can focus on selling more vehicles.
  4. Additional Support – Whether it’s answering questions about your account or helping you figure out the best inventory to carry to reach your target customers, floor plan lenders provide you with the additional support you need to help your dealership reach its full potential.
  5. Transparent Financing – It can be difficult at times to know what you’re being charged for when your traditional lender has hidden fees buried in complicated loan terms. Floor plan lenders like NextGear Capital know how frustrating this is and make sure fees are upfront and easy to understand, so you don’t get hit with any surprises.

Just like shopping for the right vehicle, you want to feel confident you’re selecting the right financing for your dealership. If you’re looking to add inventory to your lot or want to make upgrades to your dealership, choosing a floor plan lender versus a traditional bank provides you with the cash to do so. You’ll also have access to additional resources to help support your day-to-day needs and run your business more efficiently. With the right floor plan, you’ll have both the financial means and expert industry support to navigate through challenging times and adapt as needed. Start floor plan lending today!

Dealer Spotlight Bobby VanSickle: Embracing Floor Plans

Bobby VanSickle wasn’t initially interested in getting a floor plan when he decided to start his own independent dealership. “I worked for a franchise dealership for 21 years but I wanted more work-life balance. So, about seven years ago, I decided to take everything I had learned and apply it to operating my own dealership and that’s how AFS Ohio got its start. I had heard about floor plans when I was on the franchise side but I didn’t know how they worked for independent dealers. I really didn’t need the additional cash flow at the time and I thought that’s all they provided but it turned out I was wrong.”

VanSickle said that he was approached by somone from NextGear Capital and that’s when he started to rethink his decision about getting a floor plan. “I had worked with MAFS during my time on the franchise side and NextGear Capital had been recommended by the Ohio Auto Dealer Association (OADA) but if it hadn’t been for my Portfolio Manager, I still don’t think I would’ve signed up for one. He really showed me how much of an asset having a NextGear Capital floor plan is and how it could help me to further develop my business.”

Bobby VanSickle Dealership AFS Ohio

It didn’t take long before Bobby VanSickle realized how much more his floor plan had to offer. “It’s nice to have the additional cash flow but what I really like is the convenience and the resources available to help manage my dealership. I’ve looked into other floor plan lenders but I think that NextGear Capital has better tools, a better audit process and I prefer their term plan structure. Before I had a floor plan, I used cash to purchase all of my inventory. I kept about 20 cars on the lot and sold around 15 each month. Now that I have a floor plan, I keep around 150 on the lot and sell 50 vehicles each month.”

While being able to grow his inventory has been great, he says the biggest selling point for him is Account Portal. “I love using the Account Portal! The dashboard gives me a quick overview to see what payments I have coming up and I’m a huge fan of Self Reconciliation because it helps me keep track of the inventory I have between my two locations and I can quickly and easily clear my audits. I also love the titles page and I’m on it everyday. The main reason I floor the vehicles I purchase from auctions is because I don’t have to worry about following up to chase down my titles. I can quickly check their status in Account Portal, it’s such a timesaver and I consider it a huge asset to my business.”

When it comes to COVID-19, Bobby VanSickle says he didn’t have to change his sales model at all. “I was already purchasing about 90% of my inventory online before the pandemic started so the only major change I had to make was making sure the dealership was sanitized more frequently to ensure that our staff and customers were safe. We’ve been really fortunate because AFS has done great despite the pandemic. In fact, we were able to set some new sales records this past year.”

Despite this, VanSickle says that just like other dealerships have experienced, sourcing inventory has been challenging. “Finding inventory can be difficult and when I do find it, it’s often overpriced. I look for the most competively priced inventory whether I source it from traditonal auctions like Manheim, or from wholesalers. I’ve started using tools like vAuto’s Stockwave to help me make more informed decisions when I’m looking to purchase inventory. I’m also fortunate to have my own truck hauling company so I can transport units easier. I’ve noticed that there are less transport options out there because I think so many more dealers are having to go further away to source their inventory.”

In June, VanSickle says he’s moving into a new two million dollar location he recently purchased. “I’m excited about being able to finally own instead of renting my dealership space. I love that it’s closer to home and is going to allow me to save money and also carry more inventory. It’s also going to have a full body shop so we’ll be able to offer different service options to our customers.”

Bobby VanSickle jokes that the advice he would give to a new dealer is to get out, but then says, “Don’t jump in too quick and overextend yourself. I think it’s a good idea that new dealers have a floor plan but every dealer should use it differently depending on their cash flow and business needs. In my case, I wasn’t really looking for the additional cash flow but for the convenience and flexibility that my NextGear Capital floor plan provides. It’s crucial to figure out what your needs are and choose the best floor plan that’s going to help you meet them and succeed.”

NextGear Capital Creates Dealer Advisory Board

Kathy Ward Dealer Advisory Board

Diverse Client Group to Provide Feedback on What Independent Dealers Require To Be Successful In an Evolving Industry

Beyond simply staying connected with clients via surveys and anecdotal feedback, NextGear Capital is furthering its commitment to dealer growth and success with the creation of the DRIVE Dealer Advisory Board (“DRIVE” or “Advisory Board”). The purpose of the group is to provide a platform for open and direct dialogue between NextGear Capital leadership and dealers to help identify ways to best address their business needs and drive NextGear Capital’s future planning and investments.        

Over the past two years, informal dealer feedback contributed to many of the recent enhancements to Account Portal, NextGear Capital’s account management platform, reinforcing the value of creating of a more structured approach. The inaugural meeting took place virtually in April with NextGear Capital President Scott Maybee and members of his leadership team in attendance. Going forward, the Advisory Board will continue to meet monthly in a virtual setting.

“Our goal is to gain first-hand perspectives from this Advisory Board about what matters the most to our dealers,” explained Maybee. “Through collaborative interaction, DRIVE will help us better serve our 20,000-plus independent dealers, creating new solutions to reduce their pain points and providing a client experience that delivers value every day.”          

To obtain varied viewpoints and wide-ranging feedback, NextGear Capital selected a diverse group of dealer clients based on the following criteria: varying lines of credit; minority and female-owned dealership representation; those who are quick technology adopters, as well as slow adopters; Manheim and non-Manheim buyers; and both long-term and new NextGear Capital clients. The 10-person Advisory Board also represents a cross-section of NextGear Capital’s national footprint from Florida to California. The Advisory Board members are:

Kathy Ward Dealer Advisory Board

“I have worked in the automotive industry for 35 years and appreciate the importance of learning to grow and evolve an independent dealership,” explained Ward Motor Co.’s Kathy Ward. “It’s an honor to be part of the DRIVE Dealer Advisory Board and pay it forward by providing up-and-coming dealers with solutions to make their day-to-day operations easier, through insights and strategic planning with the other board members on how to best advance us into the new age of doing business.”

Utilizing A Floor Plan for All Your Business Needs

When you think about floor plan lenders, it’s natural to think of them as just another financial institution such as a local bank that offers additional funding. But did you know that when you select the right floor plan provider, you have access to additional tools and resources to help run your dealership more efficiently? NextGear Capital knows that independent dealers need more than additional cash flow to help optimize the success of their dealership. Here are some ways utilizing a floor plan to help streamline daily business tasks:

Account Portal – There are so many different aspects to running a dealership and that’s where Account Portal can help. This online account management platform gives you the most current information on everything from upcoming payments to the location of your titles. You can also access additional resources such as reporting, analytics, promotions and how-to videos.

Tailored Pricing Programs – Whether you’re new to the independent dealer space, specialize in lower-priced inventory or simply want more flexibility when it comes to your cash flow, NextGear Capital has a floor plan that’s right for you. From Flex Pricing to First Gear, we’ve designed different pricing programs to meet our dealer’s unique and individual needs.

Customer Centric Support – With other financial institutions, after you’re approved for a line of credit you’re probably not going to hear from them again unless there’s a problem. That’s not the case with NextGear Capital. You’ll have a dedicated Portfolio Manager who can help you strategize and find solutions to problems. You’ll also have access to our client experience team who can assist you with everything from processing your funding requests to answering questions about reporting available inside of Account Portal.

Easy Audit Reconciliation – Located inside of Account Portal on the audits page,Self Reconciliation efficiently clears audits so you don’t have to spend hours reconciling unverified units. Simply take pictures on your mobile device and clear audits in real-time. You can free up even more time by assigning the reconciliation to one of your associates with our delegation feature. 

MORE Resources – From our Collateral Protection Program which provides you with extra assurance on your inventory, to blogs, videos and industry insights on our dealer resources page, we’re constantly investing in providing you with the tools and information you need to help your dealership boom.

When you’re shopping floor plan lenders, remember to select one that’s going to be able to support all your business needs. From tools like Account Portal to flexible and customizable financing options, NextGear Capital prides itself on providing its dealers with a one-stop financing solution to help them overcome challenges and stand apart from the competition. Start utilizing a floor plan today by applying here.

NextGear Capital Unveils First Gear For New Dealers

Dealer using First Gear

“First Gear” helps meet the challenges of getting a used car dealership up and running

Getting a used car dealership off the ground can be challenging, especially in the current automotive retail and wholesale environment. In response, NextGear Capital has launched the first floor plan product in the industry designed specifically for new independent dealers, called First Gear.*

First Gear is a floor plan option that provides early access to capital that is vital to jump starting a new dealership. Independent dealers who’ve been in business for six months or less can get approved for up to a $100,000 line of credit without immediately submitting bank statements. This gives them the cash flow to purchase inventory and the flexibility to choose where to source from, while freeing up finances to grow their business. Following an introductory period, as more information is submitted, the line of credit is evaluated and adjusted, as needed.

first gear for dealers

In addition to being expensive, starting a new dealership comes with a lot of unknowns. First Gear dealers also benefit from NextGear Capital’s commitment to helping independent auto dealers thrive. Supported by the resources of Cox Automotive, a designated portfolio manager provides business analytics that can help new dealers identify inefficiencies, and gives them the information and tools they can use to make necessary adjustments, stay ahead of the curve and focus on profit and growth.

“NextGear Capital understands how hard it can be for independent dealers to secure lines of credit from traditional financing sources,” said President Scott Maybee. “As our company’s primary focus is to invest in the success of independent dealers, we are committed to delivering new solutions that help them and our industry grow even stronger.”

To learn more about NextGear Capital’s First Gear dealers floor plan program, go to www.nextgearcapital.com/floor-plan-products/first-gear

*Certain conditions apply. All rights reserved. Not available in New York or South Dakota. Advances are subject to Terms and Conditions of Dealer’s Demand Promissory Note and Loan and Security Agreement and other agreements with NextGear Capital. Advances made in California by NextGear Capital, Inc. are made pursuant to NextGear Capital’s California Finance Lender License #603G505.

Finding The Way Forward in May

How Daniel Delgadillo’s Adaptability Helped Him Thrive During COVID

Daniel Delgadillo, owner of Bacliff Auto, got his start in the automotive industry in 2008 working for a franchise dealership. He spent a few years in different roles then started selling cars on the side until he decided it was time for change. He got his dealer’s license and a short time later, was contacted by NextGear Capital about getting signed up for a floor plan which was the final push he needed to make his side job his main one.

It turned out to be a fortuitous decision because when the pandemic started, Delgadillo says he was glad he had the cash flow to immediately start stocking up his inventory. “By utilizing my floor plan, I was able to ramp up my inventory by purchasing non-auction units before prices skyrocketed. It gave me some breathing room because I hadn’t purchased a lot of inventory online before, so I had time to get acclimated. I’ve always been an old school, kick the tires guy, but I like being able to get other work done while I bid and buy from online auctions and still feel confident in my purchase after reading up on the units in the condition reports.”

Unlike a lot of other dealers, he says that his business has done well during COVID. “My service center grew because it was considered an essential business during the pandemic. One of my future goals is to expand on the service center by creating a “quick lane” type service center so I can increase my customer base by offering services like oil changes and selling tires on cars that weren’t purchased at the dealership. I also started making my inventory available to out-of-state buyers and shipping my vehicles across the country.”

Delgadillo says that the combination of his relationship with NextGear Capital and his attitude of no risk, no reward is what has helped him to prosper. “You can’t be afraid of change, and you have to take opportunities when they’re presented to you otherwise, you’ll never know what might’ve been.”

Kathy Ward – Supporting Troops During COVID

Kathy Ward, owner of Ward Motor Company, has always been passionate about supporting the military ever since her son joined the Army several years ago. However, she said that when the pandemic started, she felt it was more needed than ever. “COVID has made a lot of people feel isolated so reaching out with letters and care packages can make a huge difference. These kids come from all walks of life and sometimes they don’t have family who can send them letters. The first two weeks of basic training they have to spend in quarantine now, so it makes it even harder. It humbles you when you realize that you can be a light in the darkness by simply taking the time to provide words of encouragement and support.”

Ward says she’s also seen an increase in demand for her care packages. “In the past two years, I’ve helped organize over 20,000 care packages to our troops overseas for all branches of the military with the help of other military moms across the country. The packages are made up of everything from toothbrushes to energy bars. We’ve gotten some local donations for the packages but for the most part, we use our own financial resources to assemble and ship the packages. It’s worth it though because we’ve gotten so much feedback about the difference it makes when they receive a care package or handwritten letter in the mail. It helps them feel connected and cared for during such an uncertain time.”

Sales Team Members Support Dealers During Texas Winter Storm

When Texas got hit with an unprecedented winter storm that caused rolling blackouts in February, the NextGear Capital sales team had to quickly figure out how to continue to provide support for their clients. This proved especially challenging for team members like Portfolio Manager, Sandra Gonzalez who also lives in Texas and was without electricity and water for days. Despite this, the sales team came together to find solutions like extending audits to ensure their clients felt supported and needs were still being met. No matter what the circumstances, the sales team always finds a way to support our dealers and we thank them for their unwavering dedication.

Dealer Spotlight Ryan Martin: Taking Charge of His Future

Ryan Martin dealership, Koncept Motor Sales

When Ryan Martin began working in the automotive industry, he was only 20 years old but already full of ambition. “I started working for a franchise dealer and just slowly worked my way up until I realized how much money I could be making if I owned my own dealership. So, in 2017, I took the leap and that’s how Strawberry Road Auto Sales got its start. We specialize in sports cars which I both enjoy and excel at selling.”

Martin said getting a floor plan was never a question because he had worked with floor plan companies in the past, but NextGear Capital set the bar higher. “My first impression of NextGear Capital exceeded my expectations. I love my Portfolio Manager; he feels more like a friend than a business ally. When the dealership was being run by the previous owner, it only averaged about 20 to 30 units on the lot. As soon as I took over and started using my floor plan, I was quickly able to increase the inventory to about 95 vehicles a month. I started 2021 off strong by selling 170 vehicles during the month of January. I always say that If you want to sell cars, you need the cash flow to acquire new ones, and that’s why you should get a floor plan.”

Another major selling point for Martin was the ease and accessibility that Account Portal provides him. “Having the right tools and technology to support my business was one of my top priorities when it came to selecting a floor plan. After I saw a demo of Account Portal, it was a done deal for me. Running a dealership is very time consuming and there is nothing worse than having to call someone else when I want to floor my inventory, or to access information about my account. I love being able to manage my own floor plan and Account Portal gives me the freedom to view all of my account information in just a few easy clicks.”

Alex Balk is another dealer who loves Account Portal. Hear his testimony in this video:

Unlike some dealers, Martin says that he enjoys the audit process because Self Reconciliation is easy to use and he can clear his audits quickly. “I actually like the audits because they prompt me to check in on my inventory and keep track of what I have which helps me sleep better at night. I also like the aging reports I can generate inside of Account Portal because they help me keep track of what is on the floor and what needs to get turned quickly”

Besides NextGear Capital, Martin says that he uses a wide variety of other Cox Automotive products as well. “I use vAuto, VinSolutions, Dealer.com, Dealertrack, Autotrader, Kelly Blue Book and Ready Logistics all on a regular basis. There is just no comparison for VAuto in the industry and VinSolutions has the best CRM’s. I also love Autotrader’s scarcity report because it helps me know which vehicles I should be sourcing. The nice thing about all of these products being under the Cox Automotive umbrella is that they all integrate well together.”

Martin says that once the pandemic started, he initially didn’t have to make a lot of changes because he was already setup for selling his vehicles online. “Fortunately, we’ve always sold our inventory online, so we were already prepared for that shift. We have also experienced an uptick in cars that we ship out-of-state from about 5% to 20%, which has been an unexpected area that’s generated more revenue for us.”

While he was prepared for selling his inventory online, he did have to make some other adjustments. “Before COVID-19 I used to purchase most of my inventory in-person at auctions. Now, I source 100% of my inventory online. It’s been a little challenging to source inventory because the vehicles that have the highest demand in my area are scarce. So, I began to look outside of Texas to find the types of vehicles my customers wanted. I used to source only about 10% of my inventory out-of-state and now about 40% of my inventory comes from outside of Texas. It was still a relatively easy transition to make and there are definitely benefits to it like having more time to spend at the dealership, but I do miss the camaraderie and being able to see who I’m bidding against at the auctions.”

While he doesn’t want to share details yet, Martin said that he hopes to expand his dealership in the future and has a plan on how he is going to get there. One thing that he doesn’t mind sharing, is his advice to new dealers. “You should make sure you know how to manage your expenses correctly, so they don’t get out of hand. I also encourage dealers to research the market they’re in to ensure they’re purchasing the right inventory. Otherwise, vehicles are going to sit on a floor plan for an extended amount of time.”