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| Frequently Asked Questions | ||||||
GENERAL QUESTIONS: What is FMSI? Financial Management Services, In. ("FMSI") was founded in 1973 as a commercial finance company specializing in sales-financing products and services for wholesalers and distributors and their customers. FMSI, A/k/a Contractors Credit, offers financing options such as the Pro-Power revolving credit business account and term loans such as closed-end installment loans and floor-plan loans. FMSI also offers financing products exclusively for industrial distributors such as the the Pro-Power Student Tool Program and consumer products such as the Pro-Power Signature account offered solely through wholesalers to their preferred contractors and their customers. What is the process to join FMSI as a member? Membership in FMSI is restricted to approved wholesalers and distributors. Submission of the Membership Application and fee, and financial statements start the process. After an applicant is approved, the Member may use any or all of the financial products available through FMSI. An assigned FMSI representative will work closely with the Member to create customized marketing materials and private-label applications, as well as train the Member's employees on the available programs. How much is the Membership Fee? The Membership Fee is a one-time, non-refundable payment of $1,000.00 used for set-up costs. Is there a limit on how much financing can be done for a Member? There is no limit on non-recourse lending. For recourse and shared recourse lending, each Member has an established Member Credit Limit that provides the maximum guaranteed lending limit. The Member Credit Limit is determined by quantitative and qualitative analysis of the financial status of the Member. Continued Membership in FMSI requires annual submission in confidence of the Member's annual financial statements. What is recourse and shared recourse lending? Recourse lending accounts are opened based on the financial strength of the Member. The Member is guaranteeing repayment of the debt and is responsible for repurchase of the account in the event of customer default. Term loans are only available as recourse loans and provide the Member with formal customer loan agreements including a note, security agreement, and guaranty that are assigned to the Member in the event of repurchase. The Member may designate Pro-Power Revolving Business Accounts as recourse accounts at any time. Shared recourse lending shares the credit risk between the wholesaler and FMSI equally. In the event of customer default, FMSI and the wholesaler would share the loss at 50% each. The Member Credit Limit determines the maximum recourse and shared recourse lending limits. What is non-recourse lending? Non-recourse account credit limits are determined solely by FMSI and are based on the financial status of the applicant. In the event of customer default, FMSI is solely responsible for the loss. PRO-POWER REVOLVING BUSINESS ACCOUNT QUESTIONS: What is the Pro-Power Revolving Business Account? Pro-Power is a private-label credit card program offered under the Member's name to commercial customers of their choice that enables them to satisfy ongoing purchasing needs within an established credit limit. The Member receives the sales proceeds within 24 hours of the sales transaction and the customer has an interest-free repayment period or can take advantage of flexible monthly payment options. Is the Member required to have a minimum number of Pro-Power accounts established? No, there is no minimum or maximum number of accounts necessary to utilize the Pro-Power program. The Member chooses whom to put on the program with no restrictions other than credit guidelines. How quickly are applications processed and what is the credit underwriting process? Recourse applications are processed upon receipt for the credit limit requested by the Member. Non-recourse and shared recourse account applications begin the credit underwriting process upon receipt by FMSI. A proprietary credit analysis and scoring system is used to determine the initial credit approval and limit. Credit references, business credit reports, and personal credit reports are all used to assist in determining credit. Most applications can be processed within 48 hours, although larger credit requests may require a more thorough credit review. Can existing in-house customer receivables be transferred to Pro-Power? Existing customer balances cannot be transferred to Pro-Power. Pro-Power accounts can be established for existing customers and new sales transactions can be processed, however the Member would be responsible for collecting any in-house, pre-existing customer receivables. What is the Pro-Points Rewards Program? The Pro-Points Rewards Program is a voluntary incentive program designed to encourage increased sales for the Members and works in conjunction with the Pro-Power Revolving Business Account. Members can select which customers participate in the Pro-Points Program. Customers earn on Pro-Point for every dollar repaid on purchases (principal only). A minimum cumulative total of 25,000 Pro-Points is necessary for redemption and Pro-Points expire three years from the month earned. Customers can view their point bank and the Award Catalog containing over 2,000 merchandise and travel selections as well as place their orders online. The cost to the Member is .005 or a half-cent per point and awards are billed to the Member only upon redemption. For example, an award redemption for 25,000 points would translate to a cost of $125 for the Member and purchases and repayment of $25,000. While Member participation in the Pro-Points Rewards Program is encouraged, the choice is Member determined and is entirely voluntary. Click here to view the Pro-Points Rewards Brochure. PRO-POWER SIGNATURE QUESTIONS: How does Pro-Power Signature differ from the Pro-Power Revolving Business Account? Pro-Power Signature is designed to be consumer financing and can be offered to individuals as well as businesses. Pro-Power Signature funds a specific project and is closed-end financing with a repayment period of 60 months and a fixed rate. The Pro-Power Revolving Business Account is revolving commercial financing and is open-ended. Can Members offer Pro-Power Signature to their customers? Members can use Pro-Power Signature to finance consumer customers with showroom purchases and can also offer the accounts through their preferred contractors to the end-consumer/customer to finance jobs or projects. How quickly are applications processed and what is the credit underwriting process? Typically, all Signature applications will be processed as non-recourse lending unless the Member requests differently. Because the Signature program is consumer financing, credit decisions are made swiftly and are based solely on the financial status of the applicant. Typically, the wholesaler and/or the contractor will receive credit decisions within 24 hours. INDUSTRIAL CREDIT/STUDENT TOOL PROGRAM QUESTIONS: What is Industrial Credit? Industrial Credit is a division of FMSI providing financial services to industrial wholesalers and distributors and their customers. What is the Pro-Power Student Tool Program? The Pro-Power Student Tool Program is a business credit program designed to finance student tool purchases through Industrial Credit Members and meet the needs of full-time students that are enrolled in an approved school program and fulfill curriculum requirements. How does the Pro-Power Student Tool Program differ from the Pro-Power Revolving Business Account? The Pro-Power Student Tool Program is designed to provide a business finance program to increase technical school student tool sales. The Pro-Power Student Tool Program funds a specific tool purchase and is closed-end financing with a repayment period of 24 months and a fixed rate. The Pro-Power Revolving Business Account is revolving commercial financing and is open-ended. How quickly are applications processed and what is the credit underwriting process? Typically, all Student applications will be processed as non-recourse lending unless the Member requests differently. Because the Student program is based on the financial status of the applicant or the guarantor, credit decisions are made swiftly. Typically, the Industrial Credit Member will receive credit decisions within 24 hours. TERM LOAN QUESTIONS: Can installment loans or floor-plan loans be opened as non-recourse accounts? No, installment loans and floor-plan loans are opened only as recourse accounts. Can pre-existing customer receivables be refinanced as an installment loan? Yes, because the installment loan is recourse and is guaranteed by the Member, aged debt owed to the Member can be written into an installment loan. The advantage to the Member is that the debt is professionalized with a note, security agreement, and personal guaranty. FMSI takes over collection efforts and provides the wholesaler with cash flow for aged receivables. In the event of customer default, the Member must repurchase the debt, however all loan documents are assigned to the Member putting them in a stronger legal position. Are there term loan credit limit restrictions? Because term loans are recourse accounts, the cumulative amount of allowed term loans for each Member is determined by the Member Credit Limit. FINANCIAL RESOURCES QUESTIONS: What is Financial Resources? Financial Resources offers a variety of credit management services specifically designed for wholesalers and distributors. Commercial debt recovery services, credit management services, and industry-specific credit database services are available as needed. Is Membership in FMSI required to use Financial Resources services? No, Financial Resources is affiliated with FMSI but operates as a stand-alone entity. Financial Resources services are not exclusive to FMSI Members and all products and services are available on an as-needed basis to all wholesale distributors. |
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