Car dealerships can get working capital loans (including merchant cash advance) separate from floor plan financing. Working capital covers operational needs: reconditioning, marketing, payroll, auction fees, and cash flow between vehicle sales. Requirements: active dealer license, 12+ months operating, $25,000+ monthly deposits, 500+ FICO. Funding in 24–48 hours; $25,000–$500,000 range for most independent dealers.
Floor Plan vs. Working Capital Loans
Car dealers interact with two entirely different types of financing, and confusing them is common:
| Factor | Floor Plan Line | Working Capital Loan |
|---|---|---|
| Purpose | Finance vehicle inventory specifically | Operational costs unrelated to inventory |
| Collateral | Vehicle titles | Business assets / receivables |
| Repayment trigger | When vehicle is sold | Fixed daily/weekly % of deposits |
| Providers | NextGear, AFC, Floorplan Xpress, banks | MCA funders, online lenders, banks |
| Can coexist? | Yes — they serve different purposes and aren't in conflict | |
Working capital fills the gap that floor plan financing doesn't cover: reconditioning costs, marketing, payroll, and all the operational expenses that happen between buying a car and selling it.
What Car Dealers Use Working Capital For
Loan Amounts by Dealer Type
| Dealer Type | Monthly Deposits (Approx.) | Typical Working Capital Range |
|---|---|---|
| Small independent (10–30 units/month) | $50K–$150K/mo | $37K–$187K |
| Mid-size independent (30–75 units/month) | $150K–$400K/mo | $112K–$500K |
| Large independent (75+ units/month) | $400K–$1M+/mo | $300K–$500K+ |
| Buy-here-pay-here specialist | $30K–$150K/mo (note payments) | $22K–$187K |
| Franchise dealer (supplemental capital) | $500K–$5M+/mo | $375K–$500K (MCA cap) |
How Your Revenue Is Verified
Lenders verify revenue through 6 consecutive months of business bank statements. For car dealers, revenue typically appears as:
- Vehicle sale proceeds (often large, irregular deposits)
- Finance reserve payments from lenders (F&I income)
- Service department revenue
- Parts sales
- For BHPH dealers: customer note payments
Floor plan payoffs don't hurt your application. When you sell a vehicle and pay off the floor plan, you'll see large debits on your bank statement. Underwriters recognize these as inventory financing payoffs, not expenses — they look at net deposit pattern and gross cash flow through the account, not simply the balance after floor plan payoffs. Submit a brief explanation letter if your statements show unusual large outflows from floor plan activity.
Qualification Requirements
- Time in business: 12+ months with active dealer license
- Monthly deposits: $25,000+ in business bank deposits (excluding floor plan payoffs)
- Credit score: 500+ personal FICO (owners with 20%+ stake)
- Active dealer license: State dealer license in good standing
- Bank statements: 3 months of complete business statements
- No open bankruptcy
Working Capital for Car Dealerships
$25K–$500K. Separate from your floor plan. Decision in 24–48 hours.
Apply NowFrequently Asked Questions
- Can a car dealership get a business loan without a floor plan line?
- Yes. Working capital loans are separate from floor plan financing. Floor plan finances vehicle inventory; working capital covers operations — reconditioning, marketing, payroll, auction costs, and cash flow between sales. Requirements: 12+ months operating, active dealer license, $25,000+ monthly deposits, 500+ FICO. These two financing types can coexist.
- What do car dealerships use working capital loans for?
- Most common uses: vehicle reconditioning before retail sale ($500–$3,000/unit), digital advertising campaigns, same-day auction payments, payroll between slow periods, service department equipment, and buy-here-pay-here note origination capital. Working capital fills the gap between acquiring inventory and collecting retail sale proceeds.
- How is a car dealer's revenue verified?
- Through 6 consecutive months of business bank statements. Revenue appears as vehicle sale proceeds, finance reserve payments, service department income, and parts sales. Floor plan payoffs (large debits when vehicles sell) are recognized by underwriters — they evaluate gross cash flow, not just the ending balance. BHPH dealers should show note payment deposits to the business account.
- Can an independent used car dealer get a working capital loan?
- Yes. Independent used car dealers are common working capital borrowers and often have a stronger case than franchise dealers for supplemental capital. Requirements are the same: active dealer license, 12+ months in business, $25,000+ monthly deposits, 500+ FICO. Deposit consistency matters — dealers with irregular monthly revenue should aim for 90+ days of clean deposit history before applying.
- What's the difference between a floor plan and a working capital loan?
- Floor plan (from NextGear, AFC, Floorplan Xpress, or banks) finances vehicle inventory specifically — you pay it off when the vehicle sells. Working capital is for operational costs unrelated to inventory: reconditioning, marketing, payroll, rent, equipment. They serve different purposes and can coexist at the same dealership.