Capital Solutions
Deal Of The Week
This customer is getting a truck that needs a new motor
The Problem: Customer Wants To Purchase Truck That Needs A New Motor, Has Bad Credit
This is really a package deal where we are financing a truck plus the cost of putting a new motor in it. Lenders typically don't like to do these deals because they could have a problem if they fund the deal and the repair never gets done. Here's an example of what happened to us years ago:
- Customer wanted $15,000 for repairs on truck he already owned
- We funded the deal with the money going to the customer. He was to than go do the repairs as a condition of the approval
- He got the cash and disappeared. Now we had a lien on a truck that needed a motor. No good!
Just a few bad customers like this makes the whole lending game tougher for everyone.
The Solution: We Had The Vendor Put In The New Motor (not the customer). And We Got Additional Collateral To Get Around The Bad Credit
We had to cover the risk that the repair would never get done. Here's how we did it:
- The customer wanted to do the repairs himself. We wouldn't allow this. With the dealer doing it we were assured the repairs would get done
- We got the title to the customers other truck to act as the additional collateral to get around the bad credit
- We funded the dealer and he did the repairs. Customer now has the truck
Not only did we help the dealer close a sale, but we also kept the repairs in house by having them do the repairs, not the customer.
Handling things this way also protects the customer.