What is the real cost of warehouse line?

After fees and everything, what's the real "APR" for a warehouse line of credit if the interest rate is 6% at prime plus 2%?  What's a good profit margin for the warehouse line business in non-prime auto for banks?

Tags: line, warehouse

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Permalink Reply by Gerald Parker on November 2, 2010 at 8:00pm
A good question; unfortunately the anwser is complex and involves the calculation of several other loan (transaction) factors. In my experience institutional lenders seek annual yields of 12%+ for this type risk profile. Again, calculation of a profit-margin is somewhat more complex.

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