The contracts in time sale financing are generally sold at a discounted value; i.e. at a value less than the par value of the investment under contract. The dealers are able to sell the contracts at a discounted value because of the dealer floor planning. Floor planning financing is a revolving line of credit which allows the borrower to take a loan for retail goods. And these loans require collateral as the underlying security. The collateral can be a housing property, homes, or automobiles. With the sale of retail goods, the borrowers can take further loan in their line of credit to add new inventory from the dealer.
Banks are the entities which use the time sale financing to borrow money commonly, but the other borrowers use this mechanism as well.