NextGear Now Extending Loans to Franchise Dealers
NextGear Capital is offering loans to finance both new and used franchise dealerships’ inventory for the first time, according to a published report. Although NextGear, a sister company to Manheim, has offered financing for independent used dealerships before, this is a first for new car franchise dealerships — a move that will put it in direct competition with the finance companies that sell their off-lease vehicles at Manheim auctions.
The company began the program with small and rural retail operations in June, and had piloted it for about six months prior to that, according to Eric Hurst, vice president of franchise and major dealer operations, who spoke with Automotive News last week. Hurst said that he is optimistic about the program, thanks to the NextGear’s partnerships with companies like Manheim and AutoTrader.com.
“NextGear is connected with a thousand auctions across the U.S. with a touch of a button,” Hurst said. “A lot of the banks have not invested in the infrastructure to do that because they are not in the floorplan business; it’s a sidebar for them,” he said. “We get up and we do it every single day. It’s like drinking water.” NextGear is aiming at franchise dealers who own up to about 10 small stores, and will not provide loans for operating capital.
