PayLink Direct — a financial services company that specializes in providing interest-free payment plans for the purchase of service contracts for vehicles, RVs, homes, commercial trucks and other products — now is available in Canada.
According to a news release, the Chicago-based company targeted geographic expansion as one of its vital growth levers in 2020 and beyond and launched in all Canadian provinces this month.
Since the company’s inception in 2006, PayLink Direct’s infrastructure has processed more than 3.8 million service contracts and originated more than $10 billion in receivables.
“As we continue to evolve the business, we are consistently evaluating new geographic markets,” PayLink Direct co-founder and chief executive officer Rebecca Howard said.
“The Canadian market has over 35 million registered vehicles and sells nearly two million new vehicles annually,” Howard continued. “We felt it was important that our company expanded to a neighboring market and had the fortune of being able to do so with key partners who viewed our payment plans and processing expertise as an integral selling tool for their finance and insurance offerings,”
For more information, send a message to info@paylinkdirect.com or call (800) 839-7940.
Before 2019 wrapped up, OCM Auto Financing Group gained more funding horsepower to propel its business this year and down the road, too.
The Ottawa-based subprime auto lender secured a $10 million credit facility from Toronto-based lender Bridging Finance Inc. (BFI), which is one of Canada’s leading credit management firms with more than $1 billion in assets.
While currently lending primarily in the Ontario market, OCM said in a news release that the company plans to expand further in Ontario as well as in Alberta and Quebec, too.
Since its inception in Q3 of 2018, OCM reported that it has produced gross returns of more than 20% for the year and maintained a loan loss ratio of less than 1%.
OCM president and chief executive officer Andrew Abraham explained what the funding means to the company.
“We are thrilled to be working with BFI,” Abraham said. “This new credit facility, along with the money we have already raised, gives us the unique opportunity to lend up to $20 million in this rapidly emerging market segment.
“In (2020), we intend to raise even more funds so that we can provide the products and services necessary to meet the increasing demand,” he continued.
OCM emphasized that subprime auto financing in Canada consists of $15 billion within an industry that is both structured and stable.
And the company is poised for a successful 2020 and beyond.
“Considerable thought has gone into the OCM structure as well as the business and investor governance model,” said Justin Fogarty, an Ottawa-based lawyer and one of four directors of OCM.
“We anticipate OCM exceeding a quarter billion dollars’ worth of sub-prime auto financing within the next five years,” Fogarty went on to say.
Axis Auto Finance originated $1 million in new loans in a single day.
The milestone, which took place at the end of September, was a single-day originations record for the company.
The record highlights the culmination of 12 months of integration and sales platform build-out at Axis, the company said.
In addition to allowing the origination of loans across Canada, Axis said that through its platform, automotive dealers can convert up to three times more applications into loans than their competition.
“It’s great to see our efforts over the last year reflected in record origination numbers,” Axis chief executive officer Todd Hudson said in a news release.
Hudson continued, “We look forward to continuous portfolio expansion and the resulting revenue growth.”
Axis, which describes itself as Canada’s fastest-growing publicly traded alternative automotive finance company, also announced on Oct. 23 the launch of originations for Westlake Financial Services.
Through its partnership with Westlake, Axis said it can expand its credit product offering to cover the entire non-prime auto finance spectrum.
Through the partnership, Axis originates and services loans to near-prime customers in Canada on behalf of Westlake. The loans are originated under the Axis brand, and the parties share the profits.
“The Westlake partnership allows Axis to offer an unparalleled breadth of credit products in the Canadian non-prime auto market,” said Axis president Ilja Troitschanski.
Troitschanski added, “Together with superior technology, we are now able to bring he Axis program into significantly more dealerships across the country.”
The Canadian non-prime auto finance space is getting a jolt from a finance company that has grown its portfolio in that credit segment exponentially within the United States.
Westlake Financial Services and Nowcom Corp. recently announced a strategic partnership with Axis Auto Finance, which enables Westlake to access the large and growing Canadian non-prime automotive finance market.
Under the terms of the partnership, Westlake and Nowcom will invest, on a private placement basis, into Axis by way of convertible unsecured subordinated debentures. Axis will originate and service loans to near-prime customers in Canada on behalf of Westlake. The loans will be originated under the Axis brand and profits will be shared between the parties. Nowcom will provide its leading-edge technology, DealerCenter and Carzing, to the Canadian markets to enhance communication and improve origination efficiency in auto dealers working with Axis.
“This partnership greatly enhances our leading position in the Canadian non-prime automotive finance sector and provides Westlake and Axis the opportunity to symbiotically grow our respective businesses,” Axis chief executive officer Todd Hudson said. “We look forward to a long, ever expanding and mutually prosperous relationship between our two companies.”
Westlake is bringing plenty of financial momentum to the relationship. Back in July, Westlake finalized another securitization above $1 billion, setting a new company record in the process.
At the summer’s midpoint, Westlake announced the closing of its 19th asset-backed securitization (WLAKE 19-2) at $1.2 billion. This latest securitization is the largest ever in Westlake history and the fifth consecutive issuance of more than $1 billion.
When that securitization closed, Westlake’s portfolio of $8.3 billion included originated auto loans and leases, direct-to-consumer loans, portfolio purchases and servicing and dealer floorplan lines of credit.
And now Westlake is getting involved in Canada.
“We are very excited about our expansion into Canada and partnership with Axis,” said Ian Anderson, group president of Westlake Technology Holdings. “The Canadian auto finance market is very similar to the United States and offers tremendous opportunities for Westlake and Axis to help auto dealers finance more customers. We look forward to growing the business together.”
In the news release, the companies added the private placement is subject to standard and customary closing conditions including the receipt of regulatory approval.
INFOR Financial Inc. acted as the exclusive financial advisor to Axis in connection with the private placement.
Dealers are looking for finance companies to be even more of an ally.
Against a backdrop of declining auto sales in Canada, J.D. Power emphasized that dealers are expecting their lenders to go shoulder to shoulder with them in weathering the tightening market, and are looking for lenders to foster a dealer-lender relationship focusing on ease of doing business. Analysts arrived at those assertions as part of the J.D. Power "2019 Canada Dealer Financing Satisfaction Study" released on Tuesday.
The top two reasons cited by dealers for sending business to a lender are the company’s people and relationships as well as how easy they are to work with.
“The constricting market presents both risk and opportunity for lenders,” said Patrick Roosenberg, director of automotive finance at J.D. Power. “As dealers face headwinds, the pressure on lenders mounts not only to be price competitive, but also to provide a high level of service.
“Every dealer-lender communication touch point, from the credit analysts to the sales representative, must be a value-add,” Roosenberg continued. “Lenders who are engaged with their dealer partners are poised to protect market share and even grow it over the long-term.”
The study also found that dealers will seek the path of least resistance. Dealers who gave high marks (9 or 10 on a scale of 1-10) on the reasonableness of the lender’s stipulation process, are twice as likely to increase their business with the lender compared with those who rated the process 8 or lower.
Lender rankings
Ford Credit ranked highest in the captive lender segment with a score of 915. Toyota Financial Services (897) came in second, and Honda Financial Services (891) followed in third.
Among non-captive lenders, TD Auto Finance ranked highest for the second consecutive year with a score of 906. Bank of Montreal (890) took second, and Scotiabank (888) finished third.
Overall satisfaction in the captive segment improved to 883 (on a 1,000-point scale), up from 875 in 2018. In the non-captive segment, overall satisfaction climbed to 878, a 16-point improvement over 2018.
The 2019 Canada Dealer Financing Satisfaction Study, now in its 21st year, captures 5,572 finance provider evaluations across the two segments from new-vehicle dealerships in Canada. The study was fielded in February.
For more information about the Canada Dealer Financing Satisfaction Study, visit this website.
Retail Credit Satisfaction Index Ranking
(Based on a 1,000-point scale)
Captive
Ford Credit: 915
Toyota Financial Services: 897
Honda Financial Services: 891
Captive Average: 883
Kia Motors Finance: 848
Nissan Canada Finance: 838
GM Financial: 772
Hyundai Motor Finance: 768
Note: Hyundai Motor Finance is award-eligible based on equivalent sample size calculations.
Non-Captive
TD Auto Finance: 906
Bank of Montreal: 890
Scotiabank: 888
Non-Captive Average: 878
RBC Royal Bank: 866
Caisse Populaire Desjardins: 864
CIBC: 854
National Bank of Canada: 851
General Bank of Canada: 840
Scotia Dealer Advantage: 835
ATB Financial: 826
AutoCapital Canada: 819
IA Auto Finance: 817
CarFinco: 760
SCI Lease Corp.: 600
