Banks frequently bid on the opportunity to finance the entire inventory of dealers selling automobiles,business and electronic equipment,and other durable goods through a ___________ arrangement.

Question

Quizplus · Accepted Answer

Floor planning is a financing arrangement where banks finance the inventory of dealers selling durable goods such as automobiles, business and electronic equipment, and other goods. In this arrangement, the dealers use their inventory as collateral for the loan, and the bank takes a lien on the inventory. As the inventory is sold, the dealers repay the loan and the bank releases the lien. This arrangement is a common practice in the retail industry, as it allows dealers to have access to cash flow to purchase new inventory and maintain their business operations.

Banks Frequently Bid on the Opportunity to Finance the Entire