Meritor Finance

Meritor Finance, formerly ArvinMeritor Financial Services, is a captive finance company focused primarily on providing financial products and services to support the sales of commercial vehicle components and systems manufactured by Meritor, Inc. While the name might conjure images of a broad lending institution, it's crucial to understand its specific niche within the larger financial landscape.

The core business of Meritor Finance revolves around facilitating the purchase of Meritor's products. This means they offer financing solutions to distributors, dealers, and end-users like trucking companies and fleet operators who are looking to acquire axles, brakes, drivetrain components, and other parts manufactured by Meritor. These solutions typically include retail financing, wholesale financing (also known as floorplan financing for dealers), and leasing options.

Retail financing allows end-users to purchase Meritor components and systems over time through installment loans or leases. This can be a significant benefit for smaller trucking companies or independent owner-operators who might not have the immediate capital to invest in new equipment or replacement parts. It provides them with a manageable payment plan, allowing them to upgrade their vehicles and maintain their operations. The structure of these financing arrangements are tailored to meet the needs of customers.

Wholesale financing, on the other hand, is geared towards Meritor's dealers and distributors. It enables them to stock their inventory with Meritor products. Essentially, Meritor Finance provides a line of credit that allows dealers to purchase inventory upfront, paying it back as they sell the components to their customers. This ensures a consistent supply of Meritor parts in the market and supports the smooth functioning of the supply chain. This also provides an advantage for Meritor and its presence.

The primary benefit of Meritor Finance is its deep understanding of the commercial vehicle industry and the specific needs of Meritor's customers. Unlike a generic bank or financial institution, they possess specialized knowledge of the lifecycle, performance, and value of Meritor products. This allows them to offer tailored financing solutions that are competitive and aligned with the unique demands of the trucking industry. Their expertise allows them to make informed decisions and reduce potential risk.

While Meritor Finance primarily serves as a support function for Meritor, Inc., it also contributes to the company's overall profitability. By facilitating sales and promoting the use of Meritor components, it indirectly increases the demand for the company's products. In conclusion, it is a critical, integral piece to Meritor's success.