Westlake Financial is adding a second strategic partnership in Canada, Group President Ian Anderson told Auto Finance News.
The Los Angeles-based lender partnered with Preston, Ontario-based auto finance company Source One Financial two weeks ago, Anderson said, and plans to fund its first contract on Dec. 2.
The alliance comes on the heels of a partnership with Mississauga, Ontario-based Axis Auto Finance, which debuted in September. Both Canadian lenders will originate B and C paper; Westlake will service the loans and keep them on its balance sheet.
“We want to secure more volume so we can better understand the [Canadian] market more with Source One and Axis,” Anderson explained. “As we develop more and grow the portfolio, we’ll be able to understand more, and with that we could probably make a larger investment in both companies.”
Venturing into a new market poses challenges, Anderson said, including understanding the competitive landscape, credit tiers, yields and laws in Canada. “Really, there are five large banks — BMO, Royal Bank of Canada, etc. — that own the market,” Anderson said. “The other challenge for us will be developing a new deep-subprime product and seeing how the market reacts to that. There’s still a lot of customers that don’t have a way to get financed. We have an opportunity as we learn more about the market to find ways to provide financing to those customers, which will help dealers sell more cars.”
