FEATURED CASE STUDY - 01
Expanding Credit Capacity to Fuel Growth
About
Unlocking Growth Through Strategic Credit Expansion
A growing West Coast specialty finance company approached us to increase its line of credit. The business provided subprime automotive loans and had a $3.5M line with a local bank. Despite a strong loan portfolio and solid profitability, multiple lenders declined their request for an increase.
The company’s performance metrics demonstrated exceptional portfolio health and steady profitability, yet traditional banking partners were unwilling to extend further credit, limiting growth opportunities.
Problem
Traditional Lenders Decline Facility Expansion
The client faced multiple rejections from banks despite strong performance, leaving them without the additional credit required to meet increasing loan demand.
Goal
Secure Non-Bank Growth Capital
The company sought a flexible credit facility that would scale with their loan book while maintaining reasonable terms and covenants.
Solution
Non-Bank Facility & Strategic Expansion
We identified a non-bank specialty finance provider offering a $10M two-year revolving facility with an option to increase to $20M. Subsequent performance milestones led to further increases in the commitment and advance rates, reaching $25M at an 80% advance rate and reduced borrowing costs.
Strategic Lending Process
We approached the engagement with a multi-phase strategy focused on assessment, negotiation, and ongoing optimization.
Phase 1
Reviewed client’s full lending performance metrics
Identified key portfolio strengths for underwriting leverage
Evaluated non-bank lenders specializing in subprime auto finance
Phase 2
Facility Structuring & Negotiation
Negotiated terms with selected non-bank lender
Secured $10M initial facility with growth provisions
Structured performance-based advance rate increases
Phase 3
Ongoing Optimization & Expansion
Increased facility from $10M → $20M → $25M
Raised advance rates from 70% to 80%
Reduced reserve requirements and borrowing rate
Preparing transition to commercial-bank refinancing (Fall 2026)
Result
Secured Scalable Financing and Lower Borrowing Costs
Through our structured financing strategy, the client expanded its facility from $3.5M to $25M, enabling sustained portfolio growth and higher profitability.
With improved advance rates and reduced costs, the business is now positioned for long-term success, targeting a future commercial-bank refinance at lower interest rates.
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