“We define ourselves differently than most other lenders. We are a lender with the widest client base we can operate with,” Eric Kaplan, TREND Financials’ COO, told Canadian AutoWorld . He went on to explain. “With A conventional lender, if something falls within their credit box, they can approve it. If doesn’t, they can’t. We are a nonconventional lender. We structure each loan depending on how the client looks.”
Kaplan went on to describe four typical TREND clients: the self-employed car buyer who has difficulty proving income and with few assets to secure the loan; the prime borrower who has a yen for a 1997 Mercedes-Benz C Class; and what he calls the “deep subprime” borrower.
On the other hand, he says the bank might finance the purchase of a 2003 C Class, but only for a 12- to 18-month term. In this case, he says TREND will come to the buyer’s rescue with a 48-month lease.
“We say the interest rate might be a couple of points higher, but instead of paying it off over 12 to 18 months, you can go to 48 months, and your payments (amounts) will be cut in half.”
In other words, he says if the prime-rate lender can’t finance the deal, he wants dealers and business managers to turn to TREND.
“We can create a program for the client.”
He says dealers don’t need more than two lender: their prime rate lender and TREND.
He and father, Nahum Kaplan, now TREND’s CEO, toiled in non-prime vehicle finance for a total of over 30 years at CarCap Financial until that company went bankrupt. Relying on experience gained there, they opened TREND about 18 months ago.
TREND’s first transaction was the purchase of the CarCap lease portfolio when the bankruptcy trustee sold off that company’s assets.
Eric Kaplan says the purchase gave TREND “2,300, new active customers and over $10 million in receivables.”
TREND leases vehicles; it does not finance them. Kaplan explains why.
“Because on a conditional sales agreement, if the car cost $10,000, you borrow that amount and you pay tax on it. In other words, you wind up borrowing 10,000 plus HST of 13 per cent or $11,300 and paying back that larger amount.
“With a lease, we figure out the payment and we tax each payment, so the borrowing isn’t taxed. The monthly payments are.”
He figures that leasing saves the client a few dollars over the life of the transaction.
Of course, title stays with TREND until the client makes all lease payments. Then they get title, hence the term lease-to-own.
He told Canadian AutoWorld that while a typical client may not have a bad credit history, his car may be a financing problem. That affects procedure.
A rebuilt or accident-damaged vehicle is a good example. The banks won’t lend any money on a rebuilt vehicle, he says.
“These cars are cheaper because of their rebuilt history, The result is a major discount. The buyer should be able to buy that car if it’s well repaired.
“So what we tell the dealer is ‘We won’t give you the same amount on the car as if it has a clean status. We will lend the money based on the fair market value.’ ”
That means TREND expects dealers to disclose items such as rebuilt status, credit history, cash income early on or risk slowing up the process.
Kaplan says dealer can apply for financing using DealerTrack, by fax and using the TREND website. He favours the website.
“That’s where dealers have to answer all the questions and the app goes directly to the TREND credit department.”
Turnaround times range from one to three hours. But the lender is working on an automated adjudication tool, he says will process all types of credit types from the best to the worst and come up with the right interest rate. It will be available 24/7.
“We will be one of the first specialty lenders with a fully automated adjudication system,” he boasts.
One of the features, he’s particularly proud of is the buy-up feature, which lets clients buy their way up to a better interest rate by increasing their security deposit.
“We offer the client the ability to buy their way up to a higher term and get, say, tier six financing with longer payment times.”
TREND will work with independent dealers as well as franchise dealers. Training is available. But if the store’s business manager hasn’t the time to work their way through the deals, they can turn to TREND’s staff .
“Our internal sales department helps dealers work with clients who are nonprime if the store’s business manager hasn’t the time,” he says. “We take over the deal to get the deal done so the business manager has the time to work on others.”
For more information, contact Eric Kaplan at 1-855-888-7363, eric@TRENDfinancial.com or visit www.TRENDfinancial.com.