Arivo Acceptance eyes second securitization, growth in 2021

Subprime lender Arivo Acceptance is eyeing growth in 2021 on the coattails of increased funding resources and mounting momentum in recent months as it works toward STIP-less funding. The Sandy, Utah-based lender recently renewed and upsized its warehouse line of credit with JPMorgan Chase to $250 million from $200 million . Arivo is targeting the first quarter of next year for its sophomore entry into the auto asset-backed securities market, Michael Gustafson, vice president of capital markets, told Auto Finance News . The deal is estimated range between $190 and $200 million, he said. Arivo’s debut transaction in November 2019 clocked in at $166 million. Participation in the capital markets is integral to Arivo’s strategy of securing diversified funding sources, Gustafson said. “It's important for us to build that foundation in the securitization market. It's one of the legs of the stool, but I wouldn't say it's the only leg. Moving forward, we really want to stay diversified in how we how we fund the business.” Arivo Acceptance has a managed portfolio of about $250 million. Meanwhile, the upsized warehouse facility with JP Morgan will allow Arivo to expand its market presence in Kansas, North Carolina, Ohio, South Carolina, Tennessee, and Virginia, according to a release. The lender has seen a “faster than expected” rebound in recent months, Gustafson said, leading to origination volume growth of 80% to 90% from pandemic lows. “We’re upwards of $20 million [in originations] per month over the last couple months. [In November 2019], we were closer to $12 to $14 million per month,” he said. Arivo’s origination strategy lies in working toward a STIP-less environment, Alli Schreiber, director of dealer experience, said. “Going STIP-less is unheard of in our market, as everybody knows, in subprime. So that's something that we're shooting for — really trying to get to as high as percentage as we can in our fundings, that they all come in STIP-less.” The lender harnesses alternative data and alternative resources, such as a partnership with TransUnion, to work toward that goal, Schreiber said. “Our current average turn time on funding is less than two days,” she said, noting that a high percentage of loans are funded on the same day. Loan-modification programs have also normalized since peaking at around 5%, well under the industry average, Gustafson said. Normative modification rates usually land around 1%, he explained, and have returned to that level. “Heading into 2021, our goals are to get our second securitization in the market and secure that funding,” Gustafson said. “That gives us an open runway in our renewed warehouse facility to continue our growth, expand our existing dealer base and get better penetration there,” he said. “We’re really hoping to carry that momentum from late 2020, in terms of growth [into 2021], and continue on that trajectory,” Gustafson said.

Arivo Acceptance eyes second securitization, growth in 2021

Fed: Interest rates drive sales as manufacturing rebounds

Tesla’s diversity report shows a white, male leadership

Related Posts

Fed group lays out path for securitized issuers to ditch Libor

Unify Financial Credit Union becomes second CU to enter auto ABS market

Bank mergers send stocks higher as investors crave more deals

Tesla’s diversity report shows a white, male leadership

INNOVATION & TECHNOLOGY

My BMW app integrates BMW Financial Services for omnichannel experience

‘Chargers everywhere’: Biden maps $174B path for EV boom

CORONAVIRUS

April brings uptick in 0% APR financing

HyreCar sees surge in delivery drivers amid pandemic-spurred shift

SPONSORED

Closing the gaps in the digital lending experience requires a new way of coaching agents

Self-insurance, blanket coverage or CPI: Which is better for your auto loan portfolio?

Collateral Protection Insurance (CPI): What is CPI and what does it do?

About

Contact Us

Follow Us

Arivo Acceptance eyes second securitization, growth in 2021

Already subscribed? Log in below.

Fed: Interest rates drive sales as manufacturing rebounds

Tesla’s diversity report shows a white, male leadership

Related Posts

By subscribing you agree to our Terms of Use and Privacy Policy

CORONAVIRUS

SPONSORED

About

Contact Us

Follow Us