Lenders See Capital Return to the Market

FORT WORTH, Texas — Competition is getting heated, earnings are solid, and static pools are holding up “pretty well.” In general, lenders are encouraged by what the future has in store for auto finance. Particularly, capital is back in the market, and banks are competing for a piece of that pie. That was the sentiment here yesterday during a CEO panel at the NAF Association’s Nonprime Auto Financing Conference.

Two of three companies represented during the session touted their relationship with Wells Fargo and noted the recent competitiveness the bank possesses now that things are looking better in the market.

“It’s interesting how many more options are available today than in 2009,” said Bruce Newmark, president of MarkOne Holdings. “I think for companies that are growing and performing, there is quite a bit more capital availability then there was even 24 months ago.”

For Turner Acceptance Corp., calls come in every day from banks that want to offer capital to the company, a true indicator of the industry’s recovery. “There’s a heavy appetite,” said President and CEO Jonathon Levin. “There’s a lot of energy.”

Bo Culver, CEO of Automobile Acceptance Corp., noted that he also receives calls often from banks offering more capital, but the Riverdale, Ga.-based lender’s existing relationship is working well. “We have a good relationship with a national bank,” he said without specifying. “We feel well taken care of, and it’s not something we are looking for right now.”

Levin, too, plans to stick with Wells Fargo for the company’s capital requirements. “We have a terrific relationship with Wells Fargo,” Levin said. “They were there during the rough times and there for us during these good times.”

Before inking a banking relationship, though, lenders must recognize their company goals and determine what they want from a bank partner. “Make sure whatever you do relative to those private equity partners is a good relationship, and that the relationship with the capital partners is going to support the goals you have as an organization,” Newmark said.

“Bad capital partners are just as bad as a bad marriage, but harder to get out of,” he said jokingly.