FAQ

 

General Questions:

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 guarantees repayment of the debt and is responsible for repurchase of the account in the event of customer default. Share 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.

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 ProPower 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 Lending accounts are open based soley on the strenght of the customer. In the event of customer default, FMSI is soley responsible for the loss.

ProPower Revolving Business Account Questions:

What are the FMSI / ProPower Payment Options? 
1. Payments MUST BE made payable to:
FMSI/ProPower
PO Box 207,
Naperville, IL 60563

****PAYMENTS MADE PAYABLE TO SUPPLY HOUSES ARE NOT ACCEPTED.****

This address appears on the back of your statement and also on the envelope provided with statements to make a payment.
* PLEASE INCLUDE YOUR ACCOUNT NUMBER ON YOUR CHECK IF YOU DO NOT HAVE A STUB FROM YOUR STATEMENT TO SEND WITH THE CHECK FOR IMMEDIATE PROCESSING.

2. Overnight payments ONLY should be sent to:
FMSI/ProPower
535 E. Diehl Road, Ste. 350,
Naperville, IL 60563
3. ACH Payments deducted directly from your checking or savings account.
To view and print the ACH form click on the following link:

ACH Authorization Form

** This form will need to be filled out each time you would like to make a payment this way. Please fax the form back to us at 630-353-0030.

4. ONLINE BILL PAYMENT
Go to the top of the page and click on customer login. If you haven’t already registered, just supply us with a user ID, password and bank information. Once you are registered just logon and select Pay Bill.

Thanks for your business.


What is the ProPower Revolving Business Account? 
ProPower 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 ProPower accounts established? 
No, there is no minimum or maximum number of accounts necessary to utilize the ProPower 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 ProPower? 
Existing customer balances cannot be transferred to ProPower. ProPower 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 ProPoints Rewards Program? 
The ProPoints Rewards Program is a voluntary incentive program designed to encourage increased sales for the Members and works in conjunction with the ProPower Revolving Business Account. Members can select which customers participate in the ProPoints Program. Customers earn one ProPoint for every dollar repaid on purchases (principal only). A minimum cumulative total of 25,000 ProPoints is necessary for redemption and ProPoints expire three years from the month earned. Customers can view their point bank and the Award Catalog containing over 4,000 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 ProPoints Rewards Program is encouraged, the choice is Member-determined and is entirely voluntary. 

ProPower Signature Questions:

How does ProPower Signature differ from the ProPower Revolving Business Account?
ProPower Signature is designed to be consumer financing and can be offered to individuals as well as businesses. ProPower Signature funds a specific project and is closed-end financing with a repayment period of 60 months and a fixed rate. The ProPower Revolving Business Account is revolving commercial financing and is open-ended.

Can Members offer ProPower Signature to their customers?
Members can use ProPower 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. 

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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