Auto Repair Loans
This tech-enabled, POS financing platform guarantees 1st lien security interest and offered a projected yield of 14% on $25M in financing.
Helping an auto repair lender grow
Collateral Type: Portfolio of auto repair loans
Projected Yield: 14%
Term: 2 years
Geography: Toronto, Canada
Tech-enabled, point of sale financing platform that originates and services secured auto repair loans.
The platform ensures a perfected 1st lien security interest in the collateral through the Repair and Storage Lien Act (RSLA), which is senior to primary (existing) auto financing lender.
The platform does not evaluate borrowers by credit history or credit scores, but instead underwrites loans based on the Canadian Black Book value of the vehicle collateral. Underlying loan collateral is conservatively underwritten to an average LTV of 25%-30% (capped at 50%) and are senior secured by RSLA liens.
Structured as a revolving line of credit the Facility provided margin at 80% of current principal loan balances. Funding proceeds were used to fund new growth as well as repay certain subordinate debt.
Tangible net worth requirement was structured in a stepped approach, depending on facility amount in use. Minimum $3.5M and a high-end of $8M for usage over $20M.