NASHVILLE, Tenn. — Auto lenders are diversifying their funding sources to include private credit, significant risk transfer transactions and forward-flow agreements against the backdrop of volatility in funding markets and continued investor demand.
When the inaugural Auto Finance Capital Summit kicks off here on May 11 at the JW Marriott Hotel, industry leaders, investors and issuers will dive into how diversification and auto asset-backed securitization (ABS) are key levers to fund originations and optimize balance sheets. At the same time, the industry is facing increased scrutiny after the collapse of lender Tricolor Auto Acceptance and a rise in private transactions.
Funding diversification and capital access
Diversification in auto lenders’ funding strategies not only looks at various ways to shore up capital to fund originations, but includes diversifying investor bases, structures and risk transfer mechanisms.
Beyond securitization, auto financiers are turning to bank credit facilities, warehouse funding and credit risk transfer transactions to optimize funding costs and tap into demand from insurance companies, asset management groups, fintechs and large banking institutions.
Lenders during the summit will discuss auto ABS dynamics, funding costs and how they decide what lever to pull and when.
Investor discipline and transparency
Lenders are providing more transparency into their private credit market exposure after several large banks, including Fifth Third and JPMorgan Chase, reported hundreds of millions of dollars in losses following Tricolor’s bankruptcy in September 2025 and subsequent allegations of double pledging of collateral.
In fact, in the first quarter, banks including Ally Financial, Fifth Third and Chase provided details around exposure to non-bank financial institutions and private credit loan performance.
Transparency will be a recurring topic throughout the summit as lenders address investor questions and increased demand for stronger servicing oversight, tighter document requirements and structural protections.
Risks and benefits of private credit
Lenders are turning to private credit for balance sheet management, capital efficiency and funding optimization and as intuitional investor demand ramps up in auto finance.
Fintechs such as Pagaya Technologies and Upstart are using forward-flow agreements with banks, alternative investment firms and other financiers to grow auto originations while maintaining balance sheet risk. Pagaya’s auto annualized run rate for auto reached $2.3 billion in the first quarter, up 109.1% year over year after the fintech onboarded additional third-party financiers as part of its funding strategy. Upstart’s Q1 auto originations soared 304.6% YoY to $263 million.
Financiers will address private credit benefits, opportunities and challenges throughout the summit.
Find more coverage from Auto Finance Capital Summit 2026 here.
