Floor plan audit basics for equipment dealers

Floor plan financing lets a dealer stock units it has not sold yet. The lender pays the manufacturer, and the dealer pays interest and agreed curtailments until the unit sells. The OCC's handbook on floor plan lending describes how lenders watch this from their side, including physical checks of the units.

What to look at every week

• Every unit on the plan, its age and its location.
• Interest accrued so far and the next curtailment date.
• Units sold but not yet paid off to the lender.

Why weekly, not monthly

The monthly statement tells you what already happened. A weekly list tells sales which units to move now, while there is still time to do something about the cost.

Keep the audit easy

When the lender's checker arrives, the answer to "where is this unit?" should take seconds. The same list that drives the weekly sales meeting answers it.