alt Hacker NewsVendor financing is already a sign of an unhealthy market. When widespread, almost always. If the only easy way you can borrow enough to buy a thing is from the vendor, that’s bad. And if vendor financing is an increasing, not decreasing, proportion of the finance in a market, that’s worse.
Channel-stuffing, if it is happening, is usually plain illegal.
The implications are obvious: if people are using GPU scarcity and prices as a proxy for AI demand (and they absolutely have and still are, at every level), and use it as an indication that they must secure GPUs while they can, then it matters a lot if in fact that demand is being padded out and front-loaded in various ways.
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The enthusiasm for consumption seems real, though. Very large enterprises would purchase many more if they could.
>Vendor financing is already a sign of an unhealthy market. When widespread, almost always. If the only easy way you can borrow enough to buy a thing is from the vendor, that’s bad. And if vendor financing is an increasing, not decreasing, proportion of the finance in a market, that’s worse.
How much % of car loans are vendor financed?
Yes, but also, vendors are best positioned and most incentivized to be the lenders for their customers. They often just provide unbeatable terms compared to all options, even better than cash for those who do have that option and ability.
A financing company usually is fully taking the credit risk. They have to charge a high interest and hope their underwriting process is sound. That is generally the only way they make money from the transaction.
A vendor can give 0% interest or even a discount to financing customers because they are protected by the profit margin of the transaction. They can also have a looser underwriting process and take more credit risks while doing so.