When a lending institution loans money they mostly fear nonpayment of the debt. Often these loans were implemented due to a third party’s endorsement. To qualify the endorsement the bank may require the third party guarantee the debt. This is known as having ‘Recourse’ in getting the debt paid
A floor plan is a type of financing used with larger single ticket item sellers such as auto, marine craft, RV and heavy equipment dealers. The lender uses the purchase price of the respective units as collateral and each unit’s serial number (Vehicle Identification Number) is listed in the collateral report. The name stems from the concept that any car on the show room floor is finance through this plan.