Time-Sale Financing

DEFINITION of 'Time-Sale Financing'

A form of indirect dealer lending or financing used by banks or other third parties. Under time-sale financing, the borrower buys installment sale contracts from the dealer and then makes payments to the dealer.

BREAKING DOWN 'Time-Sale Financing'

Time-sale financing deals are usually sold at a discount to face value. In most cases, this is done in tandem with dealer floor planning. Banks are the most common borrowers in these scenarios, but other borrowers use this form of financing as well.