A consignment agreement is an arrangement resulting from a contract in which one entity, the consignor, entrusts goods to another, the consignee, for sale. The consignee acts as an agent on behalf of the consignor, a principal in selling the goods and must take reasonable care of them while in his or her possession. The consignor does not give up ownership of the goods until their final sale.
Under the terms of the consignment contract, the consignee agrees to pay the consignor a balance of the price received for any goods sold, which has been reduced by a fee, usually a small percentage of the sale price. Any goods that have not been sold must be returned to the consignor.
Floor Plan Financing
Floor plan financing is a revolving line of credit that allows the borrower to obtain financing for goods the borrower sells. These loans are made against a specific piece of collateral (i.e. an motor vehicles, motor bikes, earthmoving machinery, etc.). When the dealer sells each piece of collateral, the loan advance against that piece of collateral is repaid.
Finance firms that execute well on floor plan financing initiatives are those that of course are properly funded ; they also know how to collateralise the inventory through proper legal documentation and registration. The average term for a car being on the dealers lot tends to be within 30-90 days . The floor plan financier registers liens on the vehicle, and when the vehicle is sold that lien is removed . The finance firm of course profits from the ability to charge the dealership interest over that 30-90 day period . Naturally this process is cyclical and repeats itself continuously . Lenders must have reasonable confidence in the financial viability of the dealer, more experienced and financially solvent dealers can naturally command larger floor planning facilities . Dealers also are subject to rigorous audits of the inventory . The lender wants to know the car is still there and hasn’t been sold and not paid for of course! Therefore VIN ( vehicle identification numbers ) are checked regularly by finance company personnel , insurance is validated, and random inspections are common
Overall the auto floor plan facility is a key aspect of the automotive market , and is a significant benefit to both new an car dealers alike.
A Chattel Mortgage is essentially a mortgage over goods to be financed. Title to the goods passes to you on purchase – and the Lender takes a mortgage over them.
The Chattel Mortgage is a flexible finance option, enabling you control over payments and loan structure to finance the full purchase price or include an up-front deposit or trade-in to reduce your repayments.
A Finance Lease is a contract where the Lender purchases the equipment and leases to you for an agreed term and rental. Tax deductions are available for the lease rental payments, while the Lender providing the lease retains ownership of the item, and is able to claim depreciation.
A residual amount is assigned to the lease according to taxation guidelines, which is based on the useful life of the asset. At the end of the lease period, the Lender owns the equipment and may choose to sell it in the open market. Most businesses end up acquiring the equipment themselves.
For more information please call 353 1 5311123 or email email@example.com