Crediauto Eyes Summit Financial Acquisition to Jumpstart Comeback | Auto Finance News | Auto Finance News

Crediauto Eyes Summit Financial Acquisition to Jumpstart Comeback

© Can Stock Photo / Gajus

San Diego-based subprime lender Crediauto is re-entering the auto finance space after a one-year hiatus and is looking to grow rapidly through acquisitions starting with Summit Financial Corp.’s $105 million portfolio, said Rafael Gómez, chief executive of Crediauto.

“We’ll continue to grow organically as well, but we’re pursuing a couple of transactions actively and are on the lookout for other acquisitions where we can add to our balance sheet, Gómez told AFN. “We haven’t been able to complete our due diligence [on Summit Financial] just yet, but we’re starting the process.”

Summit Financial — an indirect lender with operations in Alabama, Florida, and Georgia — filed for bankruptcy in March. Company lawyer Douglas Jeffrey previously told AFN that the lender expects operations to continue throughout the reorganization process, but he did not respond to a request for comment for this story.

Crediauto launched in 2014 and grew its portfolio to $17.2 million before it was forced to stop originations to arrange for new debt capital. Investment firm Arena Investors LP is providing Crediauto with a “multi-million” credit line to refinance its current portfolio and restart operations.

The lender’s portfolio currently sits at $9 million, Gómez said. Time off allowed Crediauto to implement an automated decisioning model, revamp its scorecards, and bring collections in-house.

Since restarting originations in April, the company’s delinquencies are 60% lower than they were before the hiatus, which is giving the company confidence it can take on more volume, Gómez said. “We’re putting our name out there and letting people know that we’re in buying mode to purchase portfolios that are in distress,” he said.

8 - Readers Like This Post