Dealer & Channel Finance · 29 June 2024 · admin
Dealer finance is reshaping how distributors access working capital. Here's a comprehensive look at how it works and why it matters.
In today’s competitive market, the significance of dealers and distributors in ensuring product availability and driving consumer sales is paramount. These key players not only handle sales but also offer vital support such as inventory management and customer service, directly impacting business growth and market reach. Recognizing their critical role, empowering them through dealer Dealer Finance or Channel Finance is an effective strategy to enhance their operational capabilities and, by extension, your business success. This blog will detail what dealer finance or Channel Finance is, explore its benefits for all parties involved, and introduce how Ramsun Network can facilitate these financial solutions effectively.
Dealer finance is a specialized financial solution that helps dealers/distributors manage the purchase of inventory without straining their cash reserves. This financing model is designed to support continuous product availability by providing the necessary funds to purchase inventory upfront, thereby smoothing out the financial bumps that can occur due to seasonal demand or slow sales periods.
Dealer finance streamlines the purchasing process for dealers in several key steps:
Program Setup: Anchor Corporate Level program is set up with agreed terms and conditions between Lender and Anchor Corporate
Enrolling Dealers: Dealers are identified and their details are provided to Lender for assessment.
Approval: The finance provider assesses the dealer’s financial health and business stability to determine creditworthiness and set appropriate credit limits basis the program level agreed terms.
Disbursement: Upon approval, funds are made available to the dealers, enabling them to purchase necessary inventory.
Repayment: Dealers repay the financing amount based on agreed terms, typically linked to their sales cycle, which aligns repayments with their cash flow
Expanded Market Reach: Financing enables dealers to stock a broader array of products, enhancing brand visibility and consumer access across markets.
Supply Chain Stability: Consistent funding helps maintain a reliable supply of goods, preventing stock shortages that can adversely affect sales and customer satisfaction.
Boosted Sales Volumes: Financially empowered dealers are better equipped to meet consumer demand, directly driving up sales.
Immediate Sales realisation: Money is received by Corporate immediately hence ease out lot of efforts in collection and enables better cash flow.
Enhanced Cash Flow: Dealer finance provides the necessary capital to cover inventory costs without depleting cash reserves, ensuring liquidity.
Risk Management: Flexible repayment terms reduce financial pressure by aligning debt obligations with actual sales, minimizing the risk of overstocking.
Growth Facilitation : Access to funding allows dealers to seize market opportunities promptly, supporting expansion and competitive positioning.
Portfolio Diversification: Lenders can mitigate risk by extending credit across various industries and dealer networks.
Credit Security: Loans are often secured against the purchased inventory, lowering the default risk. Also, generally there is support available from Anchor Corporate in terms of Stop Supply, FLDG, Corporate guarantee etc.
Customer Loyalty: Providing financial solutions builds trust and loyalty among dealers, ensuring a stable customer base for lenders.
Ramsun Network offers a cutting-edge platform that bridges the gap between dealers, corporates, and lenders. Key features include:
Single Platform Integration: Ramsun Network enables Dealer financing solutions on a single platform, connecting Anchor Corporate and its dealers with multiple lenders. So, for Anchor and Dealers, even if they are getting limits from more than one Lender, process is standardised to large extent.
Having multiple Lending Partner : Ramsun Network can cover different layers of Dealers having different scenarios e.g. Vintage with Anchor, Limit Requirement, Dependency on Anchor etc. Accordingly, dealer limit is provided at best competitive rates.
Intuitive Dashboard: Our platform features an intuitive dashboard that offers comprehensive monitoring and control over transactions. This enables Anchors, its dealers and Lenders to track the transactions in real-time, ensuring transparency and enhancing decision-making.
Dealer finance is a strategic tool that significantly boosts the operational capabilities of dealers and distributors, directly influencing the broader supply chain and sales success. By improving liquidity, aligning repayment schedules with sales, and reducing financial risks, dealer finance enables businesses to thrive in competitive environments. With Ramsun Network , streamline and optimize the financial processes, your business is positioned for growth and stability in an ever-changing market landscape.
Supply Chain Finance
Supply Chain Finance
