Why New Dealers Ask About Floor Plan Before They Sign

A dealer taking on a new line is being asked to put inventory on the lot before a single unit sells. So the first question in almost every signing conversation is about money: how am I going to finance the stock you want me to carry? A manufacturer that already has the answer signs the dealer. A manufacturer that says "talk to your bank" often doesn't.

That's the whole argument for lining up floor plan before you build the network. Dealers weigh financing before they take on a line. Make it part of the offer and you've removed the most common reason to say no.

Their bank doesn't know your brand

Most established dealers already have a floor plan lender. It's tempting to assume that lender will happily add your units. Often it won't, or not quickly.

From the dealer's bank's side, your brand is an unknown. There's no resale history to lean on and no record of how your units age on a lot. Some banks will add a new brand after a few months of retail history. Others want the manufacturer to stand behind the units first. Either way the dealer waits. Meanwhile you're stuck with a signed dealer who isn't ordering.

A program that already exists skips that conversation. The dealer applies to a lender that has already looked at your product and the support behind it, repurchase included.

Put the program in the pitch

The simplest version looks like this. Before your sales team signs the first dealer, you've agreed a dealer program with a lender. Your dealer onboarding pack includes one link to a program page with your name on it. That's where the dealer applies for a line and finds the team that services the account. After approval the dealer requests funding and pays off units in a portal backed by a servicing team.

Dealers notice the difference. Asking a dealer to carry a new line is a sales job. Asking a dealer to carry a new line with financing already arranged is a much shorter one.

What lenders want from a young network

Manufacturers need to be honest with themselves at this stage. Lenders want to see a product that's already selling and a realistic plan for the first year. "Realistic" carries a lot of weight in that sentence.

A lender looking at a new network usually asks for:

• The dealers you're signing now and the opening order you expect from each one.
• Where those dealers are located.
• How many dealers you expect in the next 12 months, and how confident you feel about that number.
• Your annual sales today, even if most of it runs direct.
• What financial support stands behind the program, including repurchase.

There's no single dealer count that unlocks a program, and every lender sets its own minimums. A clear list of your first dealers with locations and expected opening orders is the place to start.

If you're not there yet, talk to a lender anyway. A straight answer on what they'd need to see, and when to come back, is worth more than a polite maybe. We give that answer on our own calls too.

Program first, or network first?

Launch them together when you can. It's the easier order of operations. Dealers sign onto a line that already exists, instead of being asked to find their own floor plan later and then waiting on it.

Manufacturers that build the network first and add floor plan later end up running two projects. One is the program setup. The other is going back to dealers who already signed, already struggled to finance stock and already formed an opinion about how easy it is to work with you.

What year one should look like

In the first year, watch three numbers:

• Signed dealers with a live line.
• The share of each line in use.
• How fast units turn.

A dealer with an approved line that never orders is telling you something. So is a dealer at 95% of their line in month two.

You also get a view you didn't have before. The system that runs the program shows which dealers are turning which models and who's ready for another order, so your sales team can spend its time where it'll move units.

Who does what

Your team decides which dealers to sign and puts the program page in the onboarding pack. The lender makes the credit decision on each dealer and funds the lines. Vero runs onboarding on VeroOS from the first application to line setup, then services every line after that.

Quick answers

How many dealers do we need before a lender will look at us? There's no single number, and every lender sets its own minimums. Start with the dealers you're signing now.

Can we launch the program and the network at the same time? Yes, and it's usually the better order.

If your dealers already finance their customers through you or a partner, the wholesale side is a separate decision. We covered how retail financing and floor plan fit together.

Vero runs dealer floor plan programs for lenders on VeroOS. If you're building a network, see how to put floor plan in the pitch and tell us about the dealers you're signing.