FI showroom red and grey logo
MenuMENU
SearchSEARCH

Part 8: Secure the Funding

It's a terrible feeling when you've put great effort into a deal only to see it go splat because you can't get the customer's loan approved. Don't let this happen to you.

November 1, 2004
Part 8: Secure the Funding

 

4 min to read


It's a terrible feeling when you've put great effort into a deal only to see it go splat because you can't get the customer's loan approved. Don't let this happen to you.

A deal is only as good as the ability to secure the funding. When loan packages reach lenders after the approval period has expired or arrive with missing documentation, the dealership loses cash flow and sometimes even the loan approval!

Ad Loading...

Lenders enter into dealership agreements on good faith, relying on the dealership to accurately represent the customer, the deal structure and the vehicle.

The best way to ensure that your deals are funded is to use the lender's guidelines, get the details right the first time and follow the documents all the way to the deposit into the dealership's bank account.

Credit the Source

Lenders can access all three major credit bureaus. They will run the bureau that is most prevalent in the customer's area. For example, a lender will most likely pull a TransUnion bureau for a Texas customer, while the same lender may pull an Experian credit bureau for a customer residing on the West Coast. When the finance representative looks at the same bureau information, it not only makes the credit interview easier, it also prepares the representative to answer the lender's questions about the customer's past credit difficulties.

I am frequently asked if the dealership has the right to show the customer the credit bureau. My answer is no. The practice of showing the credit bureau violates the dealership's subscriber agreement with the credit bureau, which stipulates that the dealership has the right to share only the information the dealership can enter into the credit bureau system: name, address and social security number. It would be wise for you to verify your subscriber agreements with your dealership's legal counsel.

Ad Loading...

Give Credit Where Credit Is Due

The best way to begin a credit interview is to put your customer in a non-

confrontational environment. Introduce yourself as the one in the dealership who works with lenders to secure loan approvals. Ask for permission to discuss past credit items. Then you can safely say, "During my preliminary credit review, I noticed some credit difficulties (or glitches, hiccups, challenges — choose the word you think the customer will be most comfortable with). What happened during this time period?" Take notes, but don't show the credit bureau to the customer.

When you review credit information with the customer, ask for a recent pay stub to verify stated employment income. When the credit FICO score is low, lenders almost always want verification of income.

Verify the length of residency. Have they been in their house for two or more years? What was their previous address?

Ad Loading...

Are references listed on the credit application? A lender wants to know where the customer can go when times are tough. Where can the lender find the vehicle?

Document the Deal

The lender's guidelines are the F&I department's best friend. A properly structured deal will get approved much faster than one that seeks an exception to the guidelines.

Use a loan document checklist, and check it twice. Documentation is the key to securing rapid funding. Most lenders will provide a list for you.

Pull the deal apart and separate the loan documentation from the accounting office package. Make it easy for the accounting office to pull the funding package to verify the invoice and add on items to obtain the loan assignment.

Ad Loading...

Track the loan package. Whether it goes UPS, FedEx, Airborne, messenger, U.S. mail or by e-contract, the funding will most likely return the same way you sent the loan package. Perhaps your dealership can simply fax loan documents to the lender, followed by automatic deposit funding. Regardless of the delivery method, you must track the loan documents to their destination and the funding into the dealership.

Make It a Happy Ending

Again, a deal is only as good as the ability to secure the funding. And secured funding is verifiable; this will be our subject in Part 9.

Jan Kelly is the president of Kelly Enterprises. She is a sales trainer and consultant, convention speaker and frequent contributor to industry publications. For information about training opportunities call (800) 336-4275 or visit her Web site, www.JLKelly.com.

Subscribe to Our Newsletter

More F&I

Cover image for a BOK Financial report titled “Timing the market: How avoiding volatility entirely can hurt long-term reinsurance program performance.” The image shows several road construction barricades with flashing amber warning lights lined up in a nighttime work zone. Beneath the image, red text explains that avoiding volatility can mean falling behind inflation and missing market rebounds that drive long-term surplus growth. The BOK Financial logo appears at the bottom right.
SponsoredMay 8, 2026

Timing the Market Can Hurt Long-Term Program Performance

For dealer-owned reinsurance entities, avoiding volatility entirely can mean falling behind inflation and missing market rebounds that drive long term surplus growth. Missing just a handful of strong market days can materially impact cumulative returns—an important reminder for long horizon trust and investment strategies.

Read More →
Ryan Ruff, The 90/10 Rule, Automotive Training Academy, Sales Series
F&IMay 6, 2026

The 90/10 Rule

In this video, Ryan Ruff explains the rule that elite sales professionals use to turn ordinary conversations into unforgettable customer experiences.

Read More →
Photo of essential oil diffuser on desk next to laptop
F&IMay 4, 2026

Your Office Is Talking

What’s the atmosphere saying about you to your customers? You can make minor adjustments and additions that transform your space into one that creates trust with the people on the other side of the desk.

Read More →
Ad Loading...
"Effective training ensures the customer’s needs remain at the heart of everything we do. When that is the focus, both sales and profits naturally improve." by Rick McCormick with F&I and Showroom logo and picture of Rick McCormick
F&IMay 1, 2026

F&I Training Fundamentals

How can auto dealerships help F&I managers fulfill their vital role in the most effective ways? Industry expert Rick McCormick shares his insights on the best ways to train these professionals and help them maintain good habits.

Read More →
Photo of car tire and the tread mark it left in snow
F&Iby Hannah MitchellApril 29, 2026

Not Just Any Tire Will Do

More consumers and businesses are opting for all-season options for various reasons as safety, sustainability and convenience push practical change.

Read More →
Photo of robot holding a laptop
F&Iby Hannah MitchellApril 27, 2026

How AI Will Drive the Next Wave of Innovation in Finance & Insurance

It’s time to take the next digital step to free F&I managers to handle the most challenging aspects of customer meetings.

Read More →
Ad Loading...
Photo of notepad and pen next to computer keyboard on desktop
F&IApril 13, 2026

Control in Sales Is an Illusion

Some of it should be given to the customer, but that doesn’t mean the F&I office relinquishes the process. In fact, a different approach both builds trust and boosts sales.

Read More →
Photo of external keyboard on office deak next to window
F&IApril 7, 2026

The Limited Warranty Game

Bringing it in-house benefits the dealership and its customers.

Read More →
Woman in casual clothing sitting at a desk
F&Iby Rick McCormickMarch 31, 2026

Curb The Confusion

Talk to F&I customers like you’d talk to a friend, without industry lingo or sales-like questions, and use hard proof to show, not tell, them about a need.

Read More →
Ad Loading...
Photo of man's hand on laptop computer keyboard with blank screen
F&IMarch 16, 2026

There Is Always one More Product

Helping F&I customers understand complementary offerings is likely to lead to more sales, based on the success of a high-performing practitioner of the philosophy.

Read More →