Rifco National Auto Finance renewed and expanded a securitization warehouse facility with Schedule 1 Charter Bank last week. Though Rifco’s utilization limit was bumped up to $40 million from $30 million, the Canadian lender plans to keep originations in the $120-million range, as stated in its 2019 objectives.
“Rifco pursues growth within constraints of profitability at all times,” said Chief Finance Officer Warren Van Orman.
The Red Deer, Alberta-based subprime auto lender has five funding facilities that combine for $205 million of capacity. Currently, more than $100 million is unused.
Van Orman said the funding capacity allows for future growth. “We prefer to secure funding well in advance of anticipated growth,” he said.
Even so, the increased credit line was unsolicited. “We have more than enough funding capacity already, so we didn’t necessarily go out seeking an increase in that funding capacity,” Van Orman said, noting that Rifco has received funding from Schedule 1 Charter Bank since 2012.
Rifco is behind track on its annual origination target of $120 million. Last quarter, Rifco originated $19.3 million of loans, down 30.6% year over year. The company attributed slow originations to the company’s refocus on the rollout of its new loan origination model and next-generation scorecard, launched last month under new Chief Credit Officer Roger Saran. Van Orman said the new model and scorecard should bring more opportunities for growth.