By 
Almost all financial organizations have a training department. Their names are as varied as Problem Loan Administration; Central Loan Department; o Department of Special Assets. A merchant may be assigned to one of these special departments, or a member of the department may begin to appear at the meeting with the merchant’s regular bank officer.
Courts have consistently upheld the rights of lenders to have training teams and for those teams, within broad parameters, to take affirmative action to protect lenders’ interests.
Equating the average dealer’s experience with training, with the lender’s experience, would be equivalent to equating a high school football team against a professional team. Professionals have played the game hundreds of times. They have seen and heard hundreds of presentations, arguments, excuses and reasons for a dealer’s problems, as the inexperienced dealer encounters trauma for the first time. Realizing that the dealer is probably a neophyte, regarding the trainings, the following rules are provided to the dealer, as a plumb line, which he must follow throughout the entire training procedure:
1. Do not confuse friendship with business. Factories and lenders have seen and heard most of the turnaround plans any dealer could suggest. You’ve probably seen versions of each plan that have been perfected over generations by some of the best minds in the business. Their experience, however, cannot help the dealer obtain the best dealer benefits.
Employees of the factory/lender have an obligation to their corporation and, in turn, to their shareholders, to obtain the best contract for their corporation. There is nothing wrong in it; they have a legal duty to protect their shareholders and creditors, not you.
However, they will indicate if your training plan is “acceptable” or “unacceptable” to them. If the proposed plan is “unacceptable,” one of two things can happen. The dealer may continue to propose plans, until one is accepted, or the factory/lender may suggest an acceptable alternative.
If the factory/lender suggests a plan acceptable to them, it simply means that: the work plan is acceptable to the factory/lender. It does not mean, and it should not mean, that the factory/lender will not approve some other plan, which may be more beneficial to the dealer. if the dealer knows what to order and how to structure it.
2. Don’t confuse optimism with confidence. Optimism means hoping that a plan will work. Confidence means knowing what to do if you don’t. Never act without confidence.
3. Do not value a dealer with the “SOT + Assets” formula. The odds against the plan working are about the same as the odds against winning the lottery, except the ante is higher.
4. Don’t say “SOT”. Sometimes a dealer talks in SOT (Sold Out Of Trust) or OT (Out Of Trust) terms with the factory or lender, when the dealer actually has SAU (Sold Not Paid For) units. Once the dealer refers to a situation of lack of trust, it puts the factory/lender in a precarious position. Then all kinds of rules come into play, both legal and business, which not have had to take effect if the dealer used the phrase SAU. The factory/lender cannot read minds to know that the dealer actually meant SAU, instead of SOT. Since the SOT phrase is used, the only thing the listener knows for sure is that if there is a trial and the listener is asked if the dealer said he or she was SOT on such and such a date, the listener would have to answer “yes”. Don’t put them in that position.
5. Don’t lie. Do not lie to yourself; don’t tie yourself to the factory; don’t lie to the lender.
Distributors, who lie to themselves about their problems, how they got there, or their ability to solve them, base their entire solution on a lie and, without exception, compound and complicate the original problems.
A lie to the factory/lender will alienate the only entities that have the ability to help and the most to gain, other than the dealer and the dealer’s family, from finding a viable solution. When in doubt, remember what Mark Twain said: “I never got hurt by anything I didn’t say.” He also said that when he was ninety years old, he remembered that he had worried about many things in life, most of which never happened.
6. Don’t be scared. There are many challenges in business, and lack of cash is just one of them. Many dealers have been there before and many dealers have survived.
Analyze the problem as if it were someone else’s problem and write a short letter as if you were giving advice to another distributor. The advice should be to get professional help. A storm at sea calls for experienced sailors. No one would want a crew with little storm experience, unfamiliar with navigation, no charts, no radar, and no one to turn to for advice. A dealer with a SOT problem is in for a big storm, except it won’t go away with time. Without help, the dealer’s family, friends and employees will be affected. The dealer has to make tough decisions, or time will make them, and the dealer will not like the decisions that time makes.
By the time the lender has the second meeting, referenced above, where the lender wants the dealer to sign the deal agreement, the dealer should be prepared for structuring the deal plan, handling of a guardian, the refund method and such.
As soon as you know you are OT, your first call should be to us (or someone as experienced as we are) and your second call (after visiting us, to your attorney and accountant) should be to the credit company. Informing the credit company that you have sold units without paying before they tell you is vital to establishing a base on which to build a work plan. At the same time, Automotive Advisors’ expertise is vital to the dealer and dealer’s attorney and accountant in providing constructive suggestions and planning and recognizing realistic options.