Business Line of Credit for Used Car Dealers |They Deserve Business Loans Too

Used car dealers need financial help just like other small businesses in the United States. With the down turn in the economy many of the local used car lots have closed up and many others are in trouble.
By: Robert Wagner
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Irvine - California - US

May 18, 2010 - PRLog -- Did you roll your eyes back in your head when you read the title of this article?  Even the used car dealer needs a business line of credit in order to continue buying and selling cars.

Used car dealers are some of the most maligned individuals in the United States. They are generally considered somewhere between the telemarketer and the shoe salesman, but they too deserve business loans to help keep their companies open. As a matter of fact, with the transition to alternate energy sources presently taking place, they may soon be the only place you can buy an old Chevy with an internal combustion engine.$100K.cfm

A good used car dealer can get financing for almost anyone, but when it comes to getting their hands on some working capital funding to keep their own doors open they may not have the same kind of luck. Some are left with the option of setting up a credit line with the bank to buy their cars, but then they have to charge higher prices to their customers. The best way to operate a used car business is to pay cash and then pass the savings on to those who shop at your lot.

The main problem if you are a car dealer and need working capital is that, once you take a loan from one of the banks you do customer financing with, they will tighten up their guidelines for lending to those who buy from you. The reaction to an established company reaching out for help is like that of a shark when there’s blood in the water. If you fail, they take over your business, including your entire inventory. It’s not that they want that to happen, but making sure you have some kind of net worth if you don’t make your payments becomes a priority for them.  

The liquidation value of a used car dealership is only a good number if that dealership has cars in stock. A bank that lends money to this type of establishment will not then allow them to sell those vehicles for short money, at least if they are the ones approving the financing. If you happen to own a used car dealership, do not use your “finance anyone” contact to borrow money for yourself. There are other sources. Go online and seek assistance somewhere else. The money is there, and getting it that way won’t affect your ability to get your next customer into the car of his or her choice.

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Learn About SBA Loans and how to get SBA funding and How to get SBA financing for your small business.
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