ADA Business Credit Corporation A Licensed Mortgage Brokerage Business

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P. O. Box 2266 E-Mail: Phone (239) 498-9488

Bonita Springs, FL 34133-2266  Fax (239) 498-5088

Funding Programs For Sub-Prime Automobile Contract Receivables

Thank you for inquiring about funding programs for your auto dealer clients who may have sub-prime auto contract receivables to sell. ADA Business Credit Corporation also represents a funding source to fund lines of credit to auto dealers to purchase their vehicles (floor plan financing). ADA Business Credit Corporation represents several sources that buy portfolios depending on the types of auto contracts and the geographical location. Some of our funding sources also are interested in establishing auto dealer agreements to fund new auto loans. Portfolios of auto contracts of $200,000 total balance and larger are preferred.

In considering the acquisition of an existing auto contract portfolio, the price paid will vary based on many factors such as the age of the contracts (seasoning of 3+ months required), the quality of the contracts, the interest rate, the payment mode (weekly, bi-weekly or monthly payments) the value of the vehicle in relation to the loan balance, the underwriting criteria, and the consistency of the underwriting as well as many other factors. The funding sources look to yield in the range of 18% - 20% on the funds they invest. Some sources will pay 90% and higher of the net principal contract remaining balance while others will pay as low as 50%. The price range for monthly payment contracts is 70% - 85% of the remaining principal balance while the price range is 60% to 75% for weekly and bi-weekly payment contracts.

The main services we offer to auto dealers are:

  • Acquisition of existing sub-prime auto loan portfolios with a minimum size of $200,000 of contracts with 3+ months seasoning. Dealer pays broker’s fee (see attached “Agreement to Pay Broker Fees”). List the auto contract information on the attached “Portfolio Template” (Excel file format) and email to me. Various funding sources portfolio purchasing programs are available (see attached some buyer profiles)
  • Line of credit for auto finance companies that provides funding for sub-prime auto loans and leases. Interest rate range from 2%+ over prime. Advances are in the range of 65% to 85%. Audited financials may be required. Minimum credit lines of $5 million and will consider $100 million and higher. Broker fees to 2%.

Attached are several documents pertaining to our programs. For portfolio acquisitions situations, you will first need to provide me the portfolio data as noted on the attached Portfolio Template (Excel file format). The contract information is to be entered onto this template and emailed to me for price evaluation. After receipt of the information, I will evaluate the portfolio and provide you a price range proposal within 2-3 days. We will then discuss the broker fee to be assessed on the deal. If you wish to provide the pertinent client information (names, addresses, etc.), broker agreements will be prepared with the client information entered and ready for you to take to your client for signatures.

As a Master Broker for the American Cash Flow Association, we welcome the opportunity to work with you. Broker fees are in the range of 3% to $500,000, 2% to $2,000,000 and 1% over $2,000,000. Depending on your level of involvement in closing projects you bring to us, your portion of the fee paid by your client can range from 20% to as high as 50%. It is assumed that you know how to market your services and that the attached will provide the information you need to get started. If you aren’t sure what to do, start by referring your clients to us thereby providing you the opportunity to learn the process while maximizing the possibility of the deal being closed for you. We are also available to telephone conference with your clients. You should review, sign and return fax to me the attached “Master Broker/Broker Fee Agreement”.

Please review the attached and call or email us with any questions or to discuss any of your clients/projects.

SBA Business Loans * Commercial Real Estate Loans * Factoring * Equipment Leasing * Venture Capital * Business Loans * Consulting

Purchase Structured Settlements, Notes & Contracts * Purchase Loan Portfolio (Auto Loans, Consumer Loans, and Home Equity Loans)