How do I explain a powersports shop’s floor-plan stock to a lender?

A powersports showroom can look rich in assets while most of it belongs to someone else. Start by preparing a unit-level schedule: what the unit is, when it arrived, whether it is on a floor-plan, and its status. Add the aging of each unit so the lender sees which ones are moving and which are not.

Then explain the cycle. Machines are bought ahead of the riding season, sold during it and carried through the quiet months. Show last year’s monthly stock levels and sales alongside the next year’s forecast. A lender also wants to know how the carrying cost behaves in a slow summer, so show what you do with units that linger, such as promotions or trade-ins.

Be clear about the other lines of revenue. Parts, service and accessories often steady the cash flow while vehicle sales swing, so present them separately. If you are buying the shop, ask the lender how a floor-plan arrangement would be handled in the purchase, whether it transfers, and whether the dealer relationship needs the provider’s approval. Your lawyer can advise on the paperwork. Bring recent statements from the floor-plan provider so the lender can verify balances, payoff timing and any audits of the units on your floor.

Key takeaways

• Prepare a unit-by-unit schedule showing what is financed, what is owned and how old it is.
• Show monthly stock and sales so the seasonal cycle is clear.
• Present parts and service separately, since they steady cash flow.