Flagship Credit to launch direct-to-consumer lending

Flagship Credit Acceptance is expanding into direct-to-consumer lending through an equity investment in automotive e-commerce technology provider Blinker . The Chadds Ford, Pa.-based subprime lender will integrate Denver-based Blinker’s loan origination technology powered by artificial intelligence (AI) and machine learning (ML). The tech allows consumers to apply for and complete financing online, Flagship Chief Executive Bob Hurzeler told Auto Finance News , noting the direct-to-consumer program will roll out in the coming months. Historically, Flagship has purchased direct loans from its lending partners, Hurzeler said. With Blinker’s technology, Flagship will enter the direct-to-consumer space originating and servicing loans using funding from a warehouse facility and the auto asset-backed securities (ABS) market, where Flagship is a frequent entrant, he said. Year to date, Flagship has secured about $1.5 billion in funding over three transactions in the ABS market, according to Finsight , which monitors securities. Starting with refi Flagship will initially offer direct lending for refinance, Hurzeler said. Indirect lending will remain a core business for Flagship, he noted. Approximately 80% of Flagship’s originations come through the indirect channel, according to a DRBS Morningstar presale report of its Aug. 11 securitization. © Can Stock Photo / Apriori Blinker leverages AI, ML and vision technology to allow a consumer to upload photos of their vehicle and documentation such as a copy of the title, verify their identity and upload necessary financing documentation online or via their smartphone, Blinker Chief Executive Rod Buscher told AFN . “It's truly an e-commerce transaction; [consumers] can do everything digitally,” he said, adding that the technology minimizes the risk of fraud by using ML to confirm identities and authenticate documents. Flagship will build on Blinker’s platform to enhance the lender’s direct-to-consumer experience, Hurzeler said, adding that Flagship will eventually expand its credit box for direct lending. “We're taking what [Blinker has] built, and what we have a deep knowledge of, and tweaking things to make it even more efficient. You can't do direct lending in this day and age and make it clunky — it doesn’t work,” he said, noting Flagship vetted multiple platforms before landing on Blinker. Flagship, which has worked closely with the technology provider for many years, is the sole investor in Blinker’s Series C capital funding raise, according to a company release. Through the deal, Flagship will gain an unspecified stake in Blinker and proprietary ownership of the direct lending solution, Hurzeler said. Flagship did not divulge how much the company had invested in the deal. Meanwhile, in line with the direct lending launch, Flagship named Rob McKie the company’s chief direct lending officer, according to a statement. McKie, a 30-year industry veteran who previously led Wells Fargo ’s centralized operations, will lead Flagship’s direct-to-consumer line of business. Flagship has a managed portfolio of $3.8 billion, according to the release. Auto Finance Summit, the premier industry event for auto lending and leasing , returns October 26-28 at the Wynn Las Vegas. To learn more about the 2022 event and register, visit www.AutoFinanceSummit.com .

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