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Last week we bought our first RV at auction with a dealer's license. We signed up for what's called a "floor plan" which is basically a revolving line of credit just for vehicles.
Basically we have 120 days to sell the RV and pay back the loan. Why bother when we have the cash to pay for it? Two reasons:
1. It confirms we are buying at profitable prices. If we can't afford $100-200 in interest on an RV, then we bought too high. The numbers need to make sense financed even if we eventually move to an all cash business model.
2. We'd like to build the line of credit in case we ever want to expand this business. If we wanted buy property and open a real dealership, we'd need 1-2 million dollars to fill the lot with RVs. By using the floor plan now, we keep our options open.
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