Deep sub-prime auto lender expands

Deep sub-prime auto finance provider Pelican Auto Finance has agreed a $100 million warehouse funding facility with Wells Fargo Securities, which the company says will help boost its ability to raise funds and its expansion plans, with the ability to offer dealers a wider range of options.

Pelican’s chief executive officer Troy Cavallaro said: “With the growth that’s underway, we were looking at the next step. I think Wells Fargo certainly is that. We’re looking at it from a rising interest rate environment. The potential access to the securitization market becomes more attractive.”

The lender is likely to use the funding injection to support dealers with potential customers who have low credit scores and who face being rejected. Pelican now has the capacity to fund originations at 60 months and 66 months depending on the quality of the vehicle collateral.

“For franchised dealers, we’re going to allow them the opportunity to finance customers who are probably walking off their dealership lots today,” Cavallaro said.

Pelican has traditionally provided indirect auto financing at both franchised and independent stores. But the development with Wells Fargo means the company has plans to expand to address the requirements of buy-here, pay-here dealers.