Almost all financial organizations have a training department. Their names are as varied as Problem Loan Administration; Central Loan Department; o Department of Special Goods. A merchant may be assigned to one of these special departments, or a member of the department may start showing up at the meeting with the merchant’s regular bank official.

Courts have consistently upheld the rights of lenders to have training teams and that those teams, within broad parameters, take affirmative action to protect the interests of lenders.

Matching the average dealer’s training experience with the lender’s experience would be equivalent to matching 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, while the inexperienced dealer first encounters trauma. Realizing that the dealer is likely to be a neophyte, regarding trainings, the following rules are provided to the dealer, like 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 restructuring 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. Your experience, however, cannot help the distributor to obtain the best benefits for the distributor.

Factory/lender employees have an obligation to their corporation and, in turn, to their shareholders, to obtain the best deal 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 whether 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: the work plan is acceptable to the factory/lender. It does not, and should not, mean that the factory/lender will not approve some other plan, which may be more beneficial to the dealer. if the distributor knows what to order and how to structure it.

2. Do not 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 dealership with the formula “SOT + Assets”. The odds against the plan working are almost the same as the odds against winning the lottery, except the initial bet is higher.

4. Don’t say “SOT”. Sometimes a dealer talks in terms of SOT (sold out of trust) or OT (out of trust) with the factory or lender, when the dealer actually has SAUs (sold and not paid for). 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, that No have had to take effect if the dealer used the SAU phrase. The factory/lender cannot read minds to know that the dealer really meant SAU, rather than SOT. From the moment the phrase SOT 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 be tied 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, aggravate and complicate the original problems.

A lie to the factory/lender will drive away 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 a lack of cash is just one of them. Numerous dealers have been there before and numerous 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 an SOT problem is in for a big storm, except it won’t go away over time. Without help, family, friends, and dealer 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, in which the lender wants the dealer to sign the negotiation agreement, the dealer must be prepared for the structuring of the negotiation plan, handling of a guardian, the method of reimbursement and such.

As soon as you know you’re 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. Letting the credit company know that you have sold unpaid units before they tell you is vital to establishing a foundation on which to build a work plan. At the same time, Automotive Advisors’ expertise is vital to the dealer and the dealer’s attorney and accountant, providing constructive suggestions and planning and recognizing realistic options.