An auto finance business plan is used by companies (start-up and existing businesses alike) that themselves need funding to launch or grow their business as a financing agent for either a car company or as a direct-to-consumer auto financer. Auto financing is a timeless business. People who buy cars almost always seek some sort of financing to make the purchase affordable, and the guarantors who make this possible are able to run a profitable business. An auto finance company's business plan needs to describe the various loans it will offer (terms, rates, credit profiles, etc.) and the market in which it will make these loans. Focus on the following:
• The type of financing you can offer
• The target user base (i.e., who is buying the cars and needs to be financed)
• The relationships with auto sellers that might help your business along
• The competitive threats you will face
• The costs you'll face in start-up and beyond
The business plan for an auto finance company should offer a five-year pro forma model if you plan to solicit private investment from angel investors or other institutional funding sources who would take a stake in your venture. For a start-up seeking SBA-backed lending, a three-year model is appropriate and you can try your plan at any accredited bank. Make sure your auto finance business plan identifies the opportunities and risks involved and profile the management team, your planned marketing strategy, and the personnel required. MasterPlans has written for dozens of auto financers and has more than 10,000 business plans under its belt. Call us today at 877-453-2011.
