Axis Auto Posts Quarterly Loss Amid Expansion Efforts | Auto Finance News | Auto Finance News

Axis Auto Posts Quarterly Loss Amid Expansion Efforts

Axis Auto Finance recorded a $1.7 million net loss for the quarter ending March 31 despite doubling outstandings year over year, the Toronto lender reported last week. By comparison, Axis lost $400,000 in the prior-year period.

Expansion across Canada on the heels of two acquisitions last year — Trend Financial Corp. and Cars on Credit Financial Inc.— propped up Axis Auto’s portfolio to $112.6 million from $60.3 million. Axis now has a presence in every major market in the country and has tripled its workforce, President Ilja Troitschanski told AFN. The used-car lender’s dealership network has grown to more than 1,000 dealers, a number that is growing at a rate of about 30% per year, he said.

Meanwhile, in March, Axis secured a larger — and lower cost — credit facility. The interest rate on Axis’s new $100 million facility is prime plus 2.25%, compared with prime plus 7.5% for the previous $14 million facility. “It’s a significantly lower capital cost of about 500 basis points in savings — straight to the bottom line,” Troitschanski said.

While Axis Auto is open to the idea of growing through acquisitions, the deep-subprime lender has yet to find the right fit. “Unfortunately, there are a lot of players in this space that don’t really have the discipline in terms of underwriting credit that is the basis for a successful portfolio,” he said. “We’ve looked at different opportunities, but a lot of them don’t pass our standards and, therefore, make the transaction very difficult.”

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