Small Business Financing For Customers: Some Answers

Helen asks…

How to provide financing at small car dealership?

My uncle has a small used car dealership, he used to sell nice quality cars, and being the honest person he is, he even let some customers make payments (some of which who never paid) He still had his business but dealt with much lower quality cars that people in the town he’s in could easily afford. He’s wanting to begin selling nicer cars again, and I’m wondering how he could provide financing for his customers? How would he go about this?

admin answers:

He’s being entirely too nice. If his customers can’t get financing at the bank, he shouldn’t finance them. If he does anyway, then he needs to put his name on the title as lien holder and go get his property if payments are not made as agreed.

He can hire a towing company and give them a list of those cars which need to be picked up, and they will gladly do it for him at a price.

Mandy asks…

Is the 30 billion dollar small business stimulus another Obama failure before it has even started?

(AP) NEW YORK – President Barack Obama’s $30 billion small community business lending program faces one big challenge: many of the community banks and businesses it’s supposed to help don’t want it.

The lending program is part of a bill that passed the House of Representatives on Thursday and now awaits the president’s signature. The legislation contains a mix of tax cuts and credits aimed at helping small businesses. The centerpiece of the bill is an effort to make billions of dollars available to community banks for loans to small businesses.

It seems like a simple effort to unclog a credit pipeline that has been blocked since the financial meltdown two years ago. But interviews with seven community bankers, as well as small business owners, show a reluctance to participate.

“People in my constituency can’t get credit, and this will get money out to small businesses, who are the engine of job creation for this country,” said Republican Sen. George LeMieux of Florida, who co-authored the amendment that created the lending program.

Bank executives say their customers don’t want loans, even at low interest rates, because the sluggish economy has chilled expansion plans. Some say the federal money isn’t worth it because they fear it will come with too much regulatory oversight.

“We have taken a strategic decision not to have our primary regulator, the government, also be a partner in our bank,” said William Chase Jr., CEO of Triumph Bank in Memphis.

Chase said the bank already has enough capital to meet the paltry demand for loans. “Our business customers are mired in uncertainty and are reluctant to invest in their businesses,” Chase said.

Ninety-one percent of small business owners surveyed in August by the National Federation of Independent Business (NFIB) said all their credit needs were met. Only 4 percent cited a lack of financing as their top business problem. Plans for capital spending were at a 35-year low.

Jack Rajala just laughs when asked if he wants to take out a loan today. He’s in a fight to save his family’s lumber business that has been buffeted by the recession and housing meltdown.

admin answers:

This answer should apply to all businesses. Why should any government money (taxpayers money) go towards stimulating any business? By pure definition a business is a a commercial organization designed and paid for by it’s shareholders to produce and sell a product or service in order to make a profit. If the business makes bad decisions that forces the business to fail or go out of business, then the business needs to fail and no government bailouts or subsidies are necessary.

Our government money (taxpayer money) should not be spent on subsidizing any business including any banks, insurance companies,auto makers, or any other types of business. If the business can’t make it on it’s own, for any reason, then the business deserves to fail, should fail, and if necessary regroup and try again, but on it’s own without any help from the taxpayers.

As far as bailouts are concerned this option should not be left up to the politicians but be up to the taxpayers to decide if they want to bailout a private corporation or not, as it is the taxpayers money or future monies that would be used to bail-out these private for-profit businesses. The ability of politicians to spent taxpayers money for the purpose of bailing out private corporations should be taken away from politicians. Politicians have shown in the past that they can’t or won’t spend tax payers money properly or responsibly.

William asks…

Where can i find details of finance companies for customers purchasing a vehicle from me?

I am in the process of planning a small business selling cars and am looking at providing finance for customers through h.p. can anyone give contact details of companies in this field and any recommendations.
I am based in England UK
I want to provide this as a broker or similar so i can do the deal there and then.

admin answers:

If you want to stay small you should be purchasing auto’s at wholesale price and obtaining at least 70% of your investment in the form of a down payment.

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