Subprime startup lender BlueFin Auto has “no plans to go beyond 66-month loan terms,” said the company’s President Norman Hale, after increasing its maximum term from 60 to 66 months, late last year.
There is “too much risk going beyond that,” especially for a subprime lender, he said. “Maintaining the terms is an important part of our model going forward. For where we are at in the space, 66 months is adequate.”
O’Fallon, Mo.-based BlueFin’s minimum loan term can go as low as 24 months, depending on the consumer, he said. The startup increased its maximum loan term in response to market conditions, because “it looked like the fed was going to increase rates — which they subsequently did — so we increased our rates at the beginning of the year as well,” Hale said. “We are trying to attract a better buyer and collateral, and extending those terms makes it easier.”
There are certain profiles within the underserved space that BlueFin Auto is not serving that “historically have not performed well,” and “a critical aspect for us is to have a portfolio that performs exceedingly well,” Hale said. As the company grows, “we will expand that [underserved portfolio], but we will not expand marketshare by buying deeper, we will expand through marketing and sales efforts.”
Separately, BlueFin Auto is looking into additional expansion opportunities. The lender currently operates in five states — Ohio, Georgia, Tennessee, Missouri, and Illinois — and makes loans for more than 750 auto dealers. “We are looking at some other opportunities to take us into Kansas, and increase our focus in some existing markets,” Hale said. BlueFin Auto has “limited penetration” within Tennessee and Georgia, so immediate expansion will include increasing its penetration within its current operating states.
