CHESTERFIELD, Mich. — Dealer financing program provider Lender to Lender Financing LLC has announced the launch of Lender Franchise System, a new program designed to license territory or dealer group franchisees to finance nonprime customers.
The franchise system is the brainchild of Richard Vanderport, who founded Lender to Lender Financing in 2002. After purchasing and servicing buy-here, pay-here (BHPH) contracts from dealers across the U.S. for five years, Vanderport was able to compile Lender to Lender Financing's collected data and develop a risk-mitigation software suite designed to determine a customer's probability of repayment.
"Our BHPH portfolios performed either good or bad, and we only want to do business with the 'good' people," Vanderport said. "We built software to determine probability of repayment across the board, and we can now apply that to individual customers."
After a rigorous qualification and training process, franchisees are entitled to receive assistance with initial funding, the proprietary risk-mitigation software, and continuing education in the form of a dedicated account manager, according to the company. Franchises are awarded in the form of an exclusive territory or, for dealer groups, a central finance office.
"The definition of 'credit-challenged' customer has changed," Vanderport said. "The captive lenders won't touch the nonprime customer and dealers need at least $1 million to start an in-house financing program. Lender Franchise System has risk vs. reward and probability of repayment built in. It's an alternative to a related finance company and I believe it's the next logical step in nonprime and subprime sales."