Definition Of Flooring In Business Or Finance

For example automobile dealerships utilize floor plan financing to run their businesses.

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. Business finance 101 business finance definition basics and best practices. Business finance is the funding we need for commercial purposes. What you don t realize is that like most new car dealers a floor plan was used to finance the cars.

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. And passing which a penalty or remedial measure is triggered. 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. Floor the area of a stock exchange where active trading occurs.

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. Floor definition is the level base of a room. In context of otc interest rate options a series of interest rate put. Floor planning is commonly used in new and used car dealerships.

In context of interest rates a level which an interest rate or currency is structured not to go below. Interest rate floors are utilized in derivative. Contrary to common perceptions most car dealers do not pay cash for the. 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. An interest rate floor is an agreed upon rate in the lower range of rates associated with a floating rate loan product.