How do I review an RV dealer’s inventory floor plan arrangements with lenders?

Floor plan financing means the lender has a stake in most units on the lot, so treat it as a core part of the review. Request every agreement, any amendments and the latest statements. Build a simple list: each unit, the amount owing, the date it was financed and how long it has been on the lot. Walk the lot and match the list to the vehicles you can see.

Look for units that have been sold but not paid off, and units that sit unsold for long stretches. Ask how the dealership handles payoff when a customer buys, and whether proceeds go to the lender promptly. Late payoffs can cause trouble with the lender and distort the cash picture.

Ask the owner what happens to the arrangement when ownership changes. Some lenders will want to review the new owner, restructure the terms or ask for a fresh guarantee. Speak with the lender early, with the seller’s consent, rather than at the last minute. Your lawyer should read the security terms, and your accountant can show how interest and fees reduce the profit you see. Seasonal swings in stock mean the balances at your visit may not reflect the year, so ask for several statements.

Key takeaways

• Build a unit-by-unit schedule of balances and match it to the lot.
• Check how quickly sold units are paid off with the lender.
• Talk to the lender early about whether the arrangement continues after the sale.