Two businesses under one roof
An independent dealer lives on inventory turns: the money spent on a vehicle is stuck until that vehicle sells. A body shop lives on throughput: the money spent on parts, paint and technician time is stuck until the insurer or the customer pays. Many owners run both, and the two feed on the same bank account.
The dealer side: floor plan gaps
Dealers often finance part of their stock through a floor-plan line with a lender, which covers purchases while a vehicle sits on the lot. The gaps are the parts that line does not cover: reconditioning costs, detail and repairs, advertising, down payments on stock the line will not fund and any day the lender's credit limit is reached. A busy weekend of auction buying can exhaust available credit exactly when the best inventory shows up.
For illustration only, a dealer who buys six vehicles at auction may need cash for transport, repairs and detailing on all six before any of them is listed. That cash comes out of operating funds, not the floor plan.
The body shop side: paint, parts and waiting
- Parts and paint are bought for each job and paid to suppliers on short terms.
- Insurance payments often arrive after the repair is done, and supplemental approvals can add delay.
- Equipment such as a paint booth, frame machine or measuring system is expensive and affects the shop's capacity.
- Skilled technicians are paid weekly regardless of when the claim pays.
A quick comparison
| Dealer | Body shop | |
|---|---|---|
| Main cash tied up in | Vehicles on the lot | Work in progress and claims |
| Typical gap | Recon and extra stock | Parts and payroll before payment |
| Big purchases | Lot, signage, software | Booth, frame equipment |
| Slow-season risk | Weak sales months | Mild weather means fewer claims |
Controlling the numbers before you borrow
Dealers should know days-on-lot for every unit, the average reconditioning cost per car and the gross profit per sale. A car that sits for months costs interest, insurance and lot space every day, so the cheapest cash is often the cash freed by selling aged stock at a modest loss. Body shops should track average repair order, cycle time and how often supplements are approved. A shop that measures these can tell whether another technician or a new piece of equipment will pay for itself.
A word on titles and paperwork
Delays in titling, registration and insurance paperwork can hold up a sale and the cash that comes with it. Streamlining the back office is one of the least expensive ways to speed up cash flow in a dealership.
The application
Funding runs from $25,000 to $5,000,000 and can arrive in as little as 24 hours. The review reads about three months of business bank statements. FICO 500 and above is considered with a soft pull, and no tax returns are required. Sole proprietors can apply. Check that the dealer license, premises and insurance are in order for your own records, since those matter to your operation whatever the source of cash. Apply here.