Goldman Sachs has provided a $10 million line of credit to On the Road Lending, a Dallas-based auto financier that works to provide character-based car loans at a flat interest rate of 9.75% to qualified buyers. On the Road Lending also helps clients with vehicle selection and financial mentoring.
On the Road Lending is looking to use the investment to expand its operations to two new markets in the latter half of 2020, Michelle Corson, founder and chief executive, told Auto Finance News. The deep-subprime lender currently operates in Alabama, Georgia, Mississippi, and Texas. It is eyeing expansion into Utah and Nevada, along with a Midwest market that will encompass Ohio, Indiana and Kentucky, she said.
The lender currently has $7 million in outstanding loans on its books and expects to originate an additional $5 million in 2020. The average loan balance is around $15,000, Corson said. The company first began originating loans in 2014 and works with 25 dealer partners in its footprint.
In order to qualify, low-income borrowers with thin or damaged credit have to participate in financial counseling, which includes writing a personal essay. On the Road Lending also interviews friends and family to get an understanding of each person’s particular circumstance. The potential buyer then saves for a down payment on the vehicle before financing is provided.
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