Consumer Portfolio Services Inc. has a two-year revolving line of credit, with a one year amortization period, which — while not recession proof — is hopefully recession resistant, Chief Executive Charles Bradley said.
“It gives us two years to use them, but what it really does, with the amortization, if for some reason you can’t securitize and clear those lines, they then continue for another year, almost like a securitization,” he said during a fireside chat at the 2016 Auto Finance Summit. “That a huge, sort of hedge against a recession. Remember, those markets only closed for ten months, so a year amortization would almost get you through the whole thing. So it’s not a coincidence that we went out and tried to build out those lines, so that you could weather a recession.”
