The Benefits of Buy Here Pay Here Financing

The concept of Buy Here Pay Here (BHPH) financing at auto dealerships is simple. Generally, sales and collections both take place at the same facility. The dealer and buyer first arrange a loan in-house at the dealership. It is common to explore financing before even looking at cars, then going to look at cars with a monthly payment range in mind. After the buyer purchases the automobile (buy here), he or she then returns to the dealership to make weekly or bi-weekly payments (pay here), usually by cash or check. Some dealerships offer BHPH financing as an option, while others require it exclusively.

BHPH financing is becoming increasingly common in the auto sales industry and there are several reasons why. An auto dealership that chooses to offer BHPH financing can suddenly reach out to a brand new pool of potential auto purchasers. BHPH financing allows dealerships to sell cars to individuals with poor credit history who would not otherwise be able to purchase a vehicle. The number of consumers with poor credit has recently increased, especially with the current state of the economy and in the wake of the subprime mortgage crisis.

BHPH financing provides these consumers with several incentives to purchase vehicles. First, dealerships can report positive buyer behavior to credit reporting agencies, which is appealing to buyers with poor credit history. Such a practice also motivates purchasers to make timely payments. Second, BHPH dealerships tend to be more flexible with accepting trade-ins because it is easier to find buyers for those cars. Accepting a trade-in vehicle that other dealers might not can be a great selling point. In sum, dealerships that offer BHPH financing can gain an edge over competitors that do not

Perhaps the best aspect of BHPH financing is that it offers a great deal of flexibility – not just in payment options but also in overall management style and decisions. Because of that, a dealership can smoothly make the transition to BHPH financing. There are many resources that provide detailed information about how to set up a BHPH dealership effectively. Jim Rhoads, the president of a consulting firm that specializes in start-ups in the BHPH field, highlights some of the steps to starting and managing a successful BHPH operation. Topics include everything from understanding the business, to choosing the right BHPH software, to collection efficiency.

Once you decide to offer BHPH financing, it is important to use marketing and advertising to your advantage. BHPH financing’s best selling point is that it is easy to buy even with poor credit history. Signs that emphasize that benefit are a must have for BHPH dealerships. These signs are especially important because many people do not know what BHPH financing is. A sign as simple as one that says “WE FINANCE” may encourage buyers who have previously been turned down because of credit problems. Effective advertising allows a BHPH dealer to maximize its potential.

How to Find Owner Financed Homes

There is no secret way to finding homes in which the seller is offering financing options. Everybody knows about some of the sites that specifically only list properties that are being sold with seller financing available. But what about the other 99% of homes that are not listed with those sites? How do you know if the seller is willing to finance part or all of your down payment?

There are a few key factors that help decide whether or not the seller will want to carry some sort of note on the house. The first and the most important is the seller’s financial situation. If they are heavily leveraged and don’t have a lot of equity in the property, then seller financing would probably not even be a possibility on their part. If they need the cash quick, whether it is for a 1031 exchange, a new boat or car, or to help bail them out of a sticky situation, they probably won’t be interested in carrying a note. The seller’s financial needs typically come before your financial needs. If you can’t make the deal happen without getting them to finance part of it, they will probably end up simply finding a different buyer.

The next factor which will help show whether seller financing is going to play a role is the market condition. If the market is sour and prices are dropping, a seller might be more willing to offer favorable financing terms to help give his or her property the advantage over other properties in the market. If the market is going strong and sales are happening right and left, you can expect to have a little more difficult time trying to negotiate some sort of owner finance deal.

Another determinant of seller financing options is the owner’s willingness to assume risk. There is inherent risk in carrying a note, and often times the owner wants to completely get out of the property and not have anything to do with it in the future. Some sellers are selling due to retirement, so they might want to move their equity into something less risky such as a bond, CD or savings account.

In order to find out if a seller is interested in offering financing, the best thing to do is just ask, or write it into your offer even if you don’t want it. Use it as a negotiating strategy. Say that you will pay a certain price if they carry a note for x dollars at y interest rate for z years. When they say that they aren’t interested in carrying a note, you say “ok fine, but then we are going to have to bring the price down a little bit”.

Even if you don’t need the seller financing, just throw it in there to help justify a price reduction. If they are willing to carry a note, you can negotiate further on the terms of the note, and if you don’t get what you want, again, you can use that to justify reducing the offer price further. Worst case scenario is that you get a great low-interest loan from the seller to help cover your down payment and minimize your capital investment!

Why Early-Stage Startup Companies Should Hire a Lawyer

Many startup companies believe that they do not need a lawyer to help them with their business dealings. In the early stages, this may be true. However, as time goes on and your company grows, you will find yourself in situations where it is necessary to hire a business lawyer and begin to understand all the many benefits that come with hiring a lawyer for your legal needs.

The most straightforward approach to avoid any future legal issues is to employ a startup lawyer who is well-versed in your state’s company regulations and best practices. In addition, working with an attorney can help you better understand small company law. So, how can a startup lawyer help you in ensuring that your company’s launch runs smoothly?

They Know What’s Best for You

Lawyers that have experience with startups usually have worked in prestigious law firms, and as general counsel for significant corporations.

Their strategy creates more efficient, responsive, and, ultimately, more successful solutions – relies heavily on this high degree of broad legal and commercial knowledge.

They prioritize learning about a clients’ businesses and interests and obtaining the necessary outcomes as quickly as feasible.

Also, they provide an insider’s viewpoint and an intelligent methodology to produce agile, creative solutions for their clients, based on their many years of expertise as attorneys and experience dealing with corporations.

They Contribute to the Increase in the Value of Your Business

Startup attorneys help represent a wide range of entrepreneurs, operating companies, venture capital firms, and financiers in the education, fashion, finance, health care, internet, social media, technology, real estate, and television sectors.

They specialize in mergers and acquisitions as well as working with companies that have newly entered a market. They also can manage real estate, securities offerings, and SEC compliance, technology transactions, financing, employment, entertainment and media, and commercial contracts, among other things.

Focusing on success must include delivering the highest levels of representation in resolving the legal and business difficulties confronting clients now, tomorrow, and in the future, based on an unwavering dedication to the firm’s fundamental principles of quality, responsiveness, and business-centric service.

Wrapping Up

All in all, introducing a startup business can be overwhelming. You’re already charged with a host of responsibilities in which you’re untrained as a business owner. Legal problems are notoriously difficult to solve, and interpreting “legalese” is sometimes required. Experienced business lawyers know these complexities and can help you navigate them to avoid stumbling blocks.

Although many company owners wait until the last minute to deal with legal issues, they would benefit or profit greatly from hiring an experienced startup lawyer even before they begin. Reputable startup lawyers can give essential legal guidance, assist entrepreneurs in avoiding legal hazards, and improve their prospects of becoming a successful company.