Capital Solutions
Deal Of The Week
Customer has a 410 credit score
The Problem: The Dealer Had A Customer With A 410 Credit Score
This is a simple example of how aggressive we can be with credit. Since we look more at the additional collateral, credit score is almost insignificant. One thing for sure: other lenders wont even look at a guy with a score this low. Here were other complications:
- The customer wanted to purchase a 2002 Freightliner. While we can do older trucks it still added to the risk
- The customer had open collection acccounts. The problem here is a collection account can be the precurser to a judgment - again, more risk
- The customer only had 10% down.
Again, to clarify we look at the additional collateral to make our decision to move forward. But we still like to know who we are "getting into bed" with. This guy's credit made us nervous.
The Solution: The Customer Had Two Trucks Free and Clear For Additional Collateral
The customer had great collateral. We don't normally need this much but given his terrible credit we had to over compensate. Here's how we filled in the pieces:
- The bad credit was the result of a double wammy. He went through a divorce and six months later got sick, resulting is obliterating his credit
- He was well established in the industry having two solid contracts to haul for national carriers
- He also had a good cash flow. He could show he could make the payments
His cash flow and additional collateral made this challenging deal easy to put together. He as also smart. He wanted as little down as possible so he could pay cash for a trailer, not incurring more debt.
Remember, we don't have a minimum credit score.