Partnership in Growth: How AFC Helps Small Businesses Thrive

More than likely, we’ve all read a business article or heard someone say small businesses are the backbone of America. Behind this somewhat ambiguous statement are some sound statistics that companies like AFC, rooted in local communities, must recognize.

According to the U.S. Small Business Administration Office of Advocacy, there are more than 29 million small businesses in the U.S., amounting to 99.9 percent of all companies. At AFC, our team takes pride in developing strong partnerships to support an important segment of these small businesses—independent automotive dealerships. AFC values the ties we have within local communities. In fact, we have more than 120 local branches spread across the heartland of the U.S. and Canada. AFC branch employees care deeply about their communities and understand the important role they serve in helping local businesses succeed. By providing dealers with liquidity, bandwidth and industry expertise, they can obtain the right inventory they need to serve their unique markets and customers.

But like any true partnership, it takes an agreement and understanding between both parties to make it successful. So, what does it take in this partnership to help dealers grow and thrive?

Engagement with dealers to truly understand their business

To help dealers meet their financing needs, it’s critical to take an honest look at their business and growth strategy. Dealers should consider the scope of credit needed — credit for just two or three vehicles at a time versus an entire floorplan will make a great difference. Likewise, what is the dealer’s typical inventory and how often does the dealer turn it over? Having a deep understanding of these factors as related to their unique business will help ensure we provide the appropriate products and services needed to meet their needs. And, as a member of the KAR Auction Services family of companies, it’s worthwhile for dealerships to take a thorough look at how our other business units can contribute to their growth. ADESA or TradeRev, for instance, can help provide a variety of other services for our dealers—including physical and digital auctions with end-to-end platforms supporting whole car, logistics and other ancillary and related services.

Honest and open disclosure of information

Whether it’s financial records, tax returns or bank statements, it’s more important than ever that dealers provide all background information to help assure a solid foundation to the partnership. When dealers provide this information, AFC can assess the appropriate level of the credit line, and work with the dealer to provide the right mix of liquidity to help grow the business while minimizing any potential risk. 

Meeting expectations is a two-way street

“It’s simply never wrong to do the right thing.” This is a take on one of my favorite quotes by Mark Twain and I believe it can pertain to the AFC’s partnership with our dealers. During lot audits, it’s our expectation that vehicles are where the dealer says they are and that the dealer reimburses us in a timely manner once cars bought with their AFC credit lines are sold. Over time, we build a positive rapport with dealers who choose to meet our expectations. The benefit? We’ll always be more flexible when we can—including providing more access to credit and allowing for temporary increases to take advantage of seasonal needs.

Over the course of my career, I’ve seen first-hand how implementing these three elements have helped dealers grow and prosper. I’ve witnessed and worked with those who have started out small and have since expanded to three, four or even more stores with multimillion-dollar facilities. AFC has been a partner in their growth, and we’ll continue to be there for them in the long run.