Answer
Jun 21, 2018 - 07:54 AM
Contact your state government and pay any application fees it requires to obtain a commercial finance license. In some states such as Florida, the application fee is $825, and there is a minimum of $25,000 liquid cash requirement. This fee will be higher or lower depending on the state.
Apply for a line credit from your bank. This is the cheapest form of financing to be lent out to your borrowers. Your profit is the difference in interest between what you pay your bank and what rate you charge your borrowers. If your bank is charging you 3.5 percent on your credit line, you can charge as high as 18 percent to your borrowers, depending on their credit history.
Banks may have certain qualifications regarding credit and income. However, an auto finance company has many ways to finance the sale of an automobile. Rates and down payments are higher to compensate for any credit risks with the borrower. With a high profit margin and secured assets such as the borrower's vehicle, an auto finance company can be lucrative.
Visit as many car dealerships in your area as possible. Meet the finance manager and present him your lending programs. Car dealerships make money on points they earn on the financing. One point is translated to 1 percent of the entire loan. The easier it is to get their customers financing, the more cars they sell and the more money your auto finance company lends.
Important note: Keep a sufficient amount of capital available to make your bank loan payments. Keep in mind that not all borrowers will make steady payments and might become delinquent on thier loans.
Apply for a line credit from your bank. This is the cheapest form of financing to be lent out to your borrowers. Your profit is the difference in interest between what you pay your bank and what rate you charge your borrowers. If your bank is charging you 3.5 percent on your credit line, you can charge as high as 18 percent to your borrowers, depending on their credit history.
Banks may have certain qualifications regarding credit and income. However, an auto finance company has many ways to finance the sale of an automobile. Rates and down payments are higher to compensate for any credit risks with the borrower. With a high profit margin and secured assets such as the borrower's vehicle, an auto finance company can be lucrative.
Visit as many car dealerships in your area as possible. Meet the finance manager and present him your lending programs. Car dealerships make money on points they earn on the financing. One point is translated to 1 percent of the entire loan. The easier it is to get their customers financing, the more cars they sell and the more money your auto finance company lends.
Important note: Keep a sufficient amount of capital available to make your bank loan payments. Keep in mind that not all borrowers will make steady payments and might become delinquent on thier loans.
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