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The Glenview finance business model
What We Do
- We buy retail installment contracts from more than 100 franchised and independent used auto dealers.
- Retail installment contracts - the "auto loan" - are the consumer’s contractual obligation to pay principal and interest to the provider of the financing.
- We do not originate retail installment contracts. We do partner with more than 100 independent used auto dealers and provide financing to the dealer's customers through a process known as "Indirect Financing".
- Indirect Financing is a process where dealers finance their customer's vehicle purchases but sell that retail installment contracts at the time of the dealer's entry into the contract, known as indirect financing. This is considered indirect lending as we are purchasing a newly created contract. We are not lending directly to the dealer’s customer.
- The indirect financing market is well-established and accounts for ~95% of the total automobile finance market with annual originations of greater than $100 billion.
- We only purchase these retail installment contracts under strict terms and conditions, including closely evaluating the quality of the collateral (the vehicle) and the credit quality of the vehicle purchaser. We use artificial intelligence and data analysis that goes well-beyond traditional credit score metrics to evaluate the credit quality of the vehicle purchaser.
- Terms and conditions in which we will purchase a retail installment contract are pre-negotiated with the dealer.
- With each purchase of a retail installment contract, we are secured lenders and hold a First Lien position on each vehicle's title.
- We track all customer's vehicles via GPS.
- We service the retail installment contracts we purchase, we provide our numerous easy-to-use payment options, and we control all payments from customers and to dealers.
Glenview’s innovative business model generates income, mitigates downside risk & safeguards capitaL
how it works
Secured Lending Against Hard Assets
Glenview manages a portfolio of high interest, retail installment contracts (commonly referred to as "auto loans") and provide our investors with an opportunity to generate monthly income backed by thousands of individual retail installment contract assets sourced from multiple, diverse geographic locations around the southeastern and mid-western United States.
We pair our decades of consumer and automobile financial expertise and our extensive network of more than 100 independent used automobile dealers to acquire these assets.
We limit our risk to capital by purchasing retail installment contract using an Indirect Financing model; that is, we purchase the contract from the dealer at the time of inception and after conducting due diligence on the vehicle (the collateral) and the borrower. During the underwriting of the retail installment contract, we use artificial intelligence and alternative credit scoring metrics to arrive at a go/no-go criteria with respect to the purchase of the retail installment contract. If the contract does not meet our strict criteria, we will not purchase that contract.
We are laser-focused on the "risk-to-value" metric; the ratio of the purchase price relative to the auction value of the underlying vehicle. In any situation where our purchase price is close to auction value of the vehicle, we will pass on that purchase. It is important to note that we are not obligated to purchase any retail installment contract offered to us by our select auto dealer network, and we frequently reject retail installment contracts based on risk-to-value and other capital-preserving metrics.
For our Accredited Investors, we have specifically built the Glenview Finance portfolio of retail installment contracts with the intention of generating stable, repeatable income in up or down economies with very low correlation to the publicly traded equity, bond, and other markets (such as real estate). With our superior portfolio monitoring technology, our conservative approach and our extensive underwriting processes, we believe the Glenview Finance portfolio is, from a risk-adjusted-return standpoint, well positioned to sustain a severe economic downturn.
generate passive interest income safe secure asset backed monthly payment
important details
Who can invest with Glenview Finance?
Any Accredited Investor, as defined by Regulation D of the Securities Act of 1933. See sec.gov for more information.
How is the interest rate on my loan to Glenview Finance determined?
We set our interest rates at a level which we believe is commensurate with the risk involved. Longer term retail installment contracts will typically earn slightly higher interest rates.
How long until my loan to Glenview Finance is paid off?
We have various term lengths, ranging from six (6) to thirty-six (36) months. Each month you will be paid your interest-only payment and in the final month, your final interest payment and your principal will be returned. We set these terms to match the terms of the retail installment contracts in our portfolio. If you anticipate needing your investment back in the near-term, we don't recommend investing with us.
What if I need my money back prior to the term?
We understand that investors may want or need to get their money back prior to the end of the loans stated term. Accordingly, our investors may request to liquidate their loans at any time, although such liquidation cannot be guaranteed and there may be costs associated with premature redemption.
How do payments work on my loan to Glenview Finance?
Glenview will send your monthly payment via ACH directly to your bank account. Each monthly payment will be interest only. In the final month of your loan, you will receive your final interest payment and your principal amount. Options will be available to "roll over" your loan at the end of the term into a new loan.
Will I pay taxes on the interest payments I earn from my loan to Glenview Finance?
You may owe taxes on the interest income. The tax laws are written in such a way so that virtually every dollar you earn is taxable unless a specific exception exists. Interest income is reported by banks and other financial institutions on Form 1099-INT, a copy of which is then sent to you and to the IRS. Glenview will send you an IRS Form 1099-INT that shows exactly how much interest you were paid during the calendar year. Check with your tax preparer to determine if you will owe taxes on your interest income.
auto market overview and opportunity
Large, Underserved Subprime Market
Auto Loan Market*
- $1.3 trillion total retail installment contract balances outstanding
- $255.6 billion, or 28%, of total retail installment contract balances outstanding are classified as subprime (FICO score below 660)
- 34% of all used autos sold in 2021 were financed with a subprime retail installment contract
Dealers
- There are more than 50,000 independent used-car dealerships in the US
- An estimated 33,000 independent used automobile dealers originate subprime retail installment contracts
- Many independent used automobile dealers are underserved from a banking, finance and technology perspective
Banks, Credit Unions and Finance Companies
- Highly fragmented market
- No lender has more than a 7% share of total automobile finance market
- 20th largest lender has less than 1% market share
- Non-Bank Finance Companies are generally unpopular with poor dealer relationships
- Traditional bank players exiting market due to changes in capital requirements
* Experian State of the Automotive Finance Market Q3 of 2022
Why we are different
Ominous Headlines
We have all seen the headlines declaring “peak auto sales”, “subprime auto finance bubble” and “used car values to decline by 50% in 4 years”. They never stop. And - WE AGREE – Auto lenders who are writing long-term retail installment contracts (50 to 72+ months) to subprime borrowers at low to mid teens interest rates, on late model collateral, with little to no down payment will face serious headwinds.
This is not Glenview’s business model. We do not compete against those lenders "chasing" risky subprime retail installment contracts.
Glenview’s current portfolio compares very favorably to the most recent averages for the used auto finance industry:
- Lower total amount financed
- Shorter term at origination
- Higher down payments
- Higher interest rates
- Older collateral with less depreciation risk
