Capital Solutions
Deal Of The Week
Customer has a 512 credit score
The Problem: Customer Had A 512 Credit Score And No Other Trucks Or Real Estate For Collateral
Additional collateral is the backbone of our program. We can't do a deal without it. This customer had no other trucks and didn't own any real estate. Here are the reasons we require additional collateral:
- Gives us extra equity in the case of repossession. By the time we liquidate the asset, pay legal fees, pay repo people, etc we get about twenty cents on the dollar. The additional collateral helps fill the gap
- Allows us as a lender to attract capital. We use private investor money to fund our transactions. Not bank lines. The collateral gives our investors additional security to invest in our program
- Gets the commitment from the customer. When he has more to loose he gets more serious about making his payments
While we are strict about the use of additional collateral, the extra equity allows us much more flexibility of who we can approve.
The Solution: The Customer Had An Annuity From A Lawsuit That Could Be Pledged For Collateral
The customer had been injured in an auto accident and was awarded a fairly large sum in a settlement. He was to receive a certain amount of money every month for compensation. Here's how we did it:
- We contacted the attorney to verify the information we were receiving from the customer. He was able to confirm that the payments were coming in and the source was sound financially
- We paid the attorney to write up an assignment on the proceeds from the annuity in case of default
- We verified the customer had a place to put the truck to work to make sure he could make the payments
Because the only paperwork we had to deal with was the assignment we were able to close this deal in about three days. It was easier than using other trucks for collateral.
This is another example of how our creativity can help you get the financing you need.