Definition Of Flooring In Business Or Finance

Simply it is a way for an auto dealer to use a lender s funds to finance the cars and until each of them is sold the lender holds title to the cars.

Definition of flooring in business or finance.

For example in an adjustable rate mortgage the lender will often specify a floor for the interest rate which means that even though the interest rate on the mortgage changes from time to time it will never drop below the specified floor these exist to protect one or both parties to a contract or investment. A floor in finance may refer to several things including the lowest acceptable limit the lowest guaranteed limit or the physical space where trading occurs. Contrary to common perceptions most car dealers do not pay cash for the. What you don t realize is that like most new car dealers a floor plan was used to finance the cars.

How to use floor in a sentence. Floor definition is the level base of a room. Floor planning is a form of financing for large ticket items displayed on showroom floors. Floor planning is commonly used in new and used car dealerships.

Floor the area of a stock exchange where active trading occurs. Also the price at which a stop order is activated when the price drops low enough to activate such an order. Lowermost preset limit of a range or the maximum limit below which a quantity such as an interest rate inventory level selling price is not allowed to fall under a rule or the terms of an agreement or contract. And passing which a penalty or remedial measure is triggered.

The lowest price or some other limit that can occur. Retail floor planning also referred to as floorplanning or inventory financing is a type of short term loan used by retailers to purchase high cost inventory such as automobiles these loans are often secured by the inventory purchased as collateral. In context of otc interest rate options a series of interest rate put. For example automobile dealerships utilize floor plan financing to run their businesses.

In context of interest rates a level which an interest rate or currency is structured not to go below. Business finance 101 business finance definition basics and best practices.