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I'm starting a used car dealership and I would like to offer financing option as a form of payment to my customers (Lately many potentials buyers ask for such). I have few concerns that I need to clear up before I can move forward with this step in my business.

  1. In-house or Financial Companies? What are advantage and disadvantage?
  2. Is there a company who can do the financing for my customers (Base in the US)?
  3. Is it smart to offer such payment at beginning stages of my dealership?

I find companies like FinanceApp and FinanceIt (Canada base only), Are these companies useful?

closed as off-topic by Chris W. Rea, Brythan, mhoran_psprep, Nick R, keshlam Jan 17 '17 at 2:49

This question appears to be off-topic. The users who voted to close gave this specific reason:

  • "Questions seeking product or service recommendations are off-topic because they tend to become obsolete quickly. Instead, describe your situation and the specific problem you're trying to solve." – Brythan, keshlam
If this question can be reworded to fit the rules in the help center, please edit the question.

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    I'm voting to close this question as off-topic because it appears to be about running a business rather than personal finance. – Nathan L Jan 9 '17 at 16:05
  • @NathanL I will remove it, is there any other SE portal I can post it to? – Farhad Saadatpei Jan 9 '17 at 16:06
  • No, I think the closest would be legal because there are certainly many applicable laws you should be aware of, but as far as how to create a relationship with a bank or credit union to offer financing, that's just something you'll have to explore by approaching a few of them. – Nathan L Jan 9 '17 at 16:08
  • I agree with the fact that many laws involve in this. But It also has financial decision side to this question. I only find Personal Finance & Money that would fit this question better, or Startup portal (Should I post it there?). – Farhad Saadatpei Jan 9 '17 at 16:15
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    I believe this question would be technically on topic in Startup: startups.stackexchange.com/help/on-topic Up to their community if they'd be able to help you better. – BrianH Jan 9 '17 at 17:19
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If it was me, I would outsource as much as possible with the desire to receive up front payment from financing companies for originating a loan. Why?

The biggest risk to newer businesses is cash flow. The amount of work a new business owner has to do is daunting. If you can outsource some of that work it will increase your chance of success and make your life easier. Focus on selling cars.

The upfront origination will help with your cash flow.

If you can outsource the credit decision making and paper work you have leveraged your time and can focus on more important things.

  • This is awesome. I had that in mind too. Very useful validation. I just can't find companies who I can outsource such a service (Financing). – Farhad Saadatpei Jan 9 '17 at 16:11
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    @FarhadSaadatpei Talk to local credit unions and locally-owned banks. They will often partner with car dealerships to offer auto loans to purchasers. (The last car loan I took was through a local credit union. I signed up right at the used car dealership the day I purchased the car.) – Ben Miller Jan 9 '17 at 18:00

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