Flooring Finance Definition

In context of interest rates a level which an interest rate or currency is structured not to go below.

Flooring finance definition.

What you don t realize is that like most new car dealers a floor plan was used to finance the cars. Using cash or a bank line of credit to purchase inventory can work for some car dealers but many floor plan financing companies offer a variety of dealer specific benefits. In addition to freeing up the cash a dealer has on hand other floor plan financing benefits. Also the price at which a stop order is activated when the price drops low enough to activate such an order.

Floor plan finance companies are uniquely attuned to the needs of auto dealers. Floor planning is a type of inventory financing for large ticket retail items. Retailers use a short term loan to purchase inventory items and the loan is repaid as inventory is sold. A flooring account is a type of short term financing that is used specifically for equipment purchases.

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. It is often referred to in the it industry regarding credit lines for computer equipment. 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. Floor the area of a stock exchange where active trading occurs.

An interest rate cap is a derivative in which the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price an example of a cap would be an agreement to receive a payment for each month the libor rate exceeds 2 5.