How does using a capital provider save dealerships resources, maximize in-office/dealership staff?

(i.e., let the professionals deal with the loans, but local owners can still service the account)

When a dealership owner decides to pursue the BHPH business model, it’s with the understanding of the risk and the quality of credit their customers are likely to have. It’s not just common sense but also basic knowledge of the business that the deals you create for car buyers must take the possibility of default into consideration. Contracting risky buyers is simply part of the subprime and nonprime auto business and the anticipation of collections and defaults on non-paying customers is factored into the equation.

That doesn’t necessarily mean that’s how a car dealership wants to be spending their time and resources. There are many reasons to separate debt collections from your showroom floor. Not only does it look and sound bad to new and good-status customers, it is a role that an employee (and sometimes, an entire department) needs to commit to. These same people need to be well-versed in the laws and regulations of your area need to avoid any infractions or risk being fined or even shut down.

Lastly, the majority of independent dealerships don’t have the technological and legal/financial resources to cost-effectively manage and services a large volume of contracts. This essential part of the business operations of a dealership becomes a burden and ever-growing risk if it’s not handled properly from day one. Glenview Finance has a high level of specialized service for these specific kinds of dealerships and deep experience in the auto finance industry which makes a partnership with us all the more appealing to owners.

Why a BHPH dealership should use a capital provider?

Many dealers who are in the Buy Here, Pay Here marketplace are successful at their primary objective for owning a dealership: selling cars. However, due to a variety of factors in this space, cash flow can often be a big hurdle and take up a huge amount of time to keep the doors open as well as keep cars and new customers on their lot.

By using a capital provider, BHPH dealership owners can leverage their existing portfolio to access funds that otherwise would have been inaccessible.Owners can avoid the need to take out high interest loans or make otherwise risky decisions with their money. A capital provider provides a lot more assurances that regular payments will be made to the dealership and the payment collection process is made more turn-key and taken off their hands.

The combination of consistent collections and consistent cash flow is what, allows owners and their management team to focus on selling cars, attracting new business and satisfying their existing customers that make using a capital provider such an attractive option.

Specifically for Glenview Finance customers, they receive weekly ACH payments and get real time Performance Reporting about the activity on their contracts, so they have the peace of mind that regular income is coming in and are clear on what’s happening with their customers’ accounts.

Common struggles BHPH dealerships encounter and how a capital provider can help

As the niche automotive industry that we serve continues to grow, dealership owners need other financing options to remain competitive and avoid situations that will dry up their cash flow and prevent them from moving inventory and sufficiently collecting payments.

Although becoming a dealership owner isn’t for the faint of heart, our customers know there are common struggles that they face everyday and that having a capital provider can alleviate some of those issues while at the same time achieving growth. While owners know this list could go on for a while, there are a few specific areas of focus they must always stay on top of, regardless of the size of their operation: compliance, capital and collections.

Compliance with state and federal laws and guidelines is very important and failing to stay on top of these frequently changing rules can wind up costing a small fortune if you’re caught violating just one, and any reputable, well-run operation can be shut down if violations occur. Although our services aren’t encompassing of all the compliance issues your dealership will need to know, the ones pertaining to collections will be very relevant. For many of our customers, this removes a lot of the risks and challenges associated with the collections process and we help make the laws governing this part of the business much more manageable and less likely to negatively impact business.

It’s not just the compliance of collections - again, two major factors of a dealership’s success - but having the grit and consistency to collect on all the deals that have been done in the BHPH model. It’s not enough to have a large loan portfolio - collecting, processing and of course Skip Tracing delinquent loans is a big expense and time commitment for dealerships. Having that entire function transitioned over within a capital provider deal frees up a ton of bandwidth and is well worth the cost.