A True Partner in Buy Here Pay Here

Over the last year or so, dealers’ interest in the buy here pay here business has grown significantly, due to increased foreclosures and bankruptcies, tighter lending guidelines, and disappearing subprime finance sources. For the savvy dealer, there is money to be made, but the BHPH business comes with its own particular set of challenges like managing collections and maintaining sufficient capital. However, there are resources to help BHPH dealers address these challenges.

Mid-Atlantic Finance Company (MAF) is a company ready to leverage its 21 years in the industry to help BHPH dealers make the most of their portfolios, whether that means account servicing, portfolio acquisitions or even the purchase of GPS devices.

The bulk of the company’s business is portfolio acquisition. “[Dealers] need capital to keep the machine moving, so we become their main liquidity source,” said Pete Agostinelli, president of Mid-Atlantic Finance Company. While many dealers opt for traditional bulk purchase, MAF also offers an alternative called the FLEX Line Program.

The FLEX Line Program, as the name implies, offers a greater amount of flexibility and is a more individualized solution for dealers’ capital needs. “We’ll evaluate a portfolio on its own merits, and every portfolio that we look at across the country has different characteristics,” said Agostinelli. With this program, rather than having to wait for an account to age a certain number of months, MAF is able to purchase that note from inception. The dealer receives an initial advance on the account, and once the account has reached a predetermined point in its performance, MAF will release a secondary advance. As long as they’re in good standing with the program, dealers can submit accounts at any time as needed.

Dealers selling loans to MAF through traditional portfolio acquisition or the FLEX Line Program are able to participate in a bonus pool. If a dealer’s portfolio exhibits better-than-expected performance, that dealer can earn above and beyond their advance. Agostinelli added if the dealer’s portfolio doesn’t perform well, “there’s no additional obligation.”

For dealers who need a little extra help keeping up with collections management, but do not wish to sell off their accounts, MAF will service accounts on a monthly basis for a fee. Dealers choose the level of service provided to them. MAF can provide cradle-to-grave account management and even repossession services, or dealers may select a small number of desired services á la carte.

Also notable about MAF is the degree of transparency with which it operates. With portfolio acquisitions, the FLEX Line Program and account servicing, dealers are able to logon to the company’s Web site and monitor the performance of their portfolios or even the activity on a particular account—the amount a customer has paid, the number of days the account is past due, the date of the last payment, and so forth. With other companies that purchase loans, Agostinelli said, “once [dealers] make it past the recourse provisions of the sale, they really never know how the loan pool performed or how the individual customers performed.” With MAF, dealers can check up on accounts 24 hours a day, seven days a week. “It’s a pretty transparent system,” he said. “We do all the heavy lifting.”

There are a couple of distinct advantages to this system, he pointed out. Dealers can monitor their accounts so as a customer pays down, “they can try to bring the customer back in and remarket them another vehicle,” said Agostinelli. The other advantage is that dealers have another potential resource to draw on for the inventory they need. “After any recourse period is over, they can voluntarily … request to repurchase any account they choose that’s delinquent,” said Agostinelli. If the account is paid down to a certain point, repurchasing the account and repossessing the vehicle could be more cost-efficient than attempting to acquire the same kind of vehicle elsewhere.

A dealer who sells loans to Mid-Atlantic Finance Company will have a dedicated relationship manager to contact in reference to their pool of loans. A dealer utilizing the company’s account servicing is assigned a dedicated collections representative who communicates detailed information to the dealer on an account-by-account basis.

Dealers are also able to acquire GPS devices through MAF’s sister company, CallPass Tech. As an added bonus, if MAF purchases a block of loans and those accounts have GPS devices purchased from CallPass Tech, the dealers will be able to buy that same number of new devices at a price well under market value. “It’s just another relationship tool that we’re extending to our existing clients,” Agostinelli noted.

Headquartered in Clearwater, Fla., with a business development and collections center in Houston, Texas, MAF will work with any size dealership in almost every state. “We’ll deal in transactions as small as $25,000 or as large as $20 million,” said Agostinelli. It’s preferred for dealers to be in business at least one year, but the company will consider taking on dealers who’ve been in business a shorter time.

Flexibility, transparency and individualized solutions make Mid-Atlantic Finance Company a true partner for BHPH dealers. “It’s technology and service that truly sets us apart,” said Agostinelli. “The industry itself is a price-driven industry, so you’ve got to be competitive in order to earn people’s business … but there needs to be a high level of service afterwards. When you combine both price and service, that’s what keeps people coming back.”

For more information on the programs and services available from Mid-Atlantic Finance Company, call 888.243.8367 or visit www.midfinance.com.