Three years after leaving the investment banking world to form Braeger Financial Group with the objective of bringing individual accredited investors directly into auto finance, David Braeger recently rolled out his latest financing products to help buy-here, pay-here and independent dealerships secure more working capital.
Braeger is now offering short-term finance notes to dealers; notes that come in 15-, 20-, 30- and 40-month maturities while annually paying investors 8 percent, 9 percent and 10 percent, respectfully.
The company insisted this new short-term note program has been met with monstrous enthusiasm from dealers because of the simplicity and cost savings.
Braeger explained how the product works using the 15-month note as an example. Dealers pay 1/15th of the principal, plus interest, each month, which is then used to pay the investors. If dealers have a strong history of payment, they can ask for a credit increase at any time.
According to Braeger, “The traditional auto lenders are killing dealers with purchase fees, re-floor fees on flip, title time fees, curtailment fees and offset fees among others. Our system allows the dealers to become entrepreneurs again.
“If we decide to loan them money, they get it up front and pay us according to contract with none of these fees,” he continued. “The pressure is off the dealer to get the car off the lot or get hit with fees. Furthermore, the way many of the finance companies work, you can actually end up paying higher fees in months you turn cars more quickly.”
A Braeger client described his experiences using this product. Dusty Jackson is president and chief executive officer of AutoStart, an operation based in Kansas City, Mo., with 10 locations in Missouri, Kansas and Oklahoma.
“Traditional finance companies charge between 9 and 15 percent interest on financing, but once fees are factored in, the cost is most often three or more times that. Braeger has relieved that.” Jackson said.
“The biggest problem (Braeger) has in my opinion is the demand from the multi-billion dollar independent dealer market is so high for a program like his, even with the secure nature of the investors’ money, protected by the dealer’s inventory, I am not sure how he could ever raise capital fast enough,” Jackson continued.
Sherwood Neiss, co-founder of Crowdfund Capital Advisors, said when Braeger first launched his company that “It’s incredibly innovative. If hecan get it right, he will have more business than he can handle because there will be auto dealers coming to him for solutions who wouldn’t find them elsewhere.”
Now with this note program, Braeger is hopeful about how the company can help dealerships.
“We try and make things as simple as possible for the dealer, which benefits the consumer,” he said. “I have always tried to make the auto finance experience enjoyable for the dealer down to the consumer and that is what has made all parties including investors so happy.”
For more information, visit www.braegerfinancial.com or call (262) 385-5914.