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The automotive credit market with auto dealerships is still a very fragile. Underwriters that are looking at dealership and auto groups portfolios more carefully to try and find reasons to lend, but with the previous track records of inaccuracy and turnover this decision could threaten the employment of an underwriter not making the same shift in current banking philosophy. Lenders are looking for the proof that a potential borrower’s story is correct and there is a strong chance of sustainability within the borrower’s working industry. Gross profit is great if you can turn receivables fast. Slow cash after continuously chasing titles, sales, service, and parts receivables from customers’, lenders’, manufactures’ government entities (titles) is slowly going to choke your cash. Automotive Dealership Managers really need to pay attention who they are doing business with where a receivable created may become a choke point in cash flow. Add up a few of these scenarios and one department can intensely effect how your liquid bottom line is influenced. Good cash management with lead to the automotive market opportunities. |
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