Discount Auto Inc has been in business since 1999. It has been growing each year. The dealership is located in Greenville, NC and has been at the same location since it began. The building is 1500 square feet and has 2 mechanic bays in the back along with a detail shop. The value of the property is estimated at $450,000. As the business grew, it came to a point where a floorplan was needed in order to purchase inventory to be sold. Currently Discount Auto has it’s largest floorplan with a large company called AFC and the line is $1.7 million. This line is never maxed out; we pay on what we use. Each day there are fees, interest and curtailments that Discount Auto pays. The rate is prime plus 3% so it will fluctuate with the market. The rate is not the problem, but the fees combined with the rate and curtailments is what the problem is.
On average, Discount Auto keeps 120 cars in inventory. The current value of the inventory is roughly $2M as of today’s date. The dealership’s monthly sales average 40 units/month. Gross sales revenue for the last three years is as follows: $7,347,246 (2020), $9,254,477 (2021), $9,510,356 (2022).
The dealership also has a BHPH side of the business. Below average customers need a vehicle to drive, so we will finance the customer with a large down payment and monthly payments are made to the dealership. The dealership holds the paper and titles so we are the bank. We do very well with BHPH, however the amount of capital needed to do this is rather large.
Discount Auto Inc is at a point where they feel it will be more beneficial to have a private investor instead of a floorplan. This will give the dealership the opportunity to purchase more inventory and in turn sell more inventory and make more money. We are looking for a $1M investment with a 5-year term. The rate would be 10% but it is negotiable. The term could be extended at the end of 5 years as well. All floorplan lines will be turned off and the investor would have a UCC on the business to secure their investment. Financial statements, bank statements and floor plan statements can be provided as well.
Throughout the years, Discount has continued to upgrade the dealership and serve customers from all over Eastern Carolina. Our next goal is to expand our mechanic shop on the property as an additional service for our customers. Our business keeps growing and we plan to keep expanding so we can pass a secure business to our children. I hope you are impressed with what we have to offer and look forward to the wonderful possibilities that lay ahead with this relationship.
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