Sub-Prime Auto Lending

Sub-prime auto lender needed cash for expansion. We lent $8M at 13.5% to allow them to accommodate their increasing inflow of loan applications.

Helping a sub-prime auto lender handle demand

Type: Senior Secured Loan
Collateral Type: Portfolio of sub-prime auto loans
Amount: $8M

Projected Yield: 13.5%
Term: 1 year, auto renewable
Geography: Canada

Originally a smaller lender, focused on the sub-prime auto space in a limited region, we were approached to provide the Company with a working capital line of credit against their existing book of $2M auto loans, in order for them to grow and expand across their territory.

Advance rate of 80% of eligible receivables/loans was provided; the facility provided for dominion of cash and weekly reporting requirements.

With our facility, the company was able to achieve their growth targets in a shorter amount of time by having the capital available to expand into platforms that provide higher inflow of loan requests.
We have, over the past 3 years, increased our facility to $8M in order to accommodate their loan portfolio of almost $11M.

Required tangible net worth is equal to 25% of outstanding loan balance.

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