SpringboardAuto Shifts Lending Model Following Portfolio Sale

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July 12, 2018

Auto Finance News, Vol 6. No 27

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Direct lending platform SpringboardAuto sold its portfolio last week to an undisclosed buyer for nearly $60 million as it moves away from holding loans on its books, Founder and Chief Executive Jim Landy told Auto Finance News. SpringboardAuto will no longer use its own capital to finance loans, but rather, it will originate loans then sell them to its bank partners. “I wouldn’t say we’ll never hold another loan on our balance sheet again,” Landy said. “But we’d like to partner with lenders [moving forward].” SpringboardAuto already has one lender signed and is prepping for another in the near future. Although Landy declined to disclose who the lenders are, he said they are both “below prime,” adding that the company is seeking banks that will originate in the prime and super-prime space. Springboard will only originate loans that fit its lender partners’ credit specifications and will present consumers with the best-matched offer, rather than displaying multiple offers as other marketplace models do. “[Being a lender] takes a lot of capital. I’d argue there is already a lot of supply in the market, and to the extent we can align ourselves with players in the market [the better off we’ll be],” Landy said. “In the marketplace model, what consumers are selecting is more price-oriented than experience-oriented. We view Springboard as a user experience, and we don’t want to give that up.” Separately, SpringboardAuto white-labels its direct lending technology to credit unions and banks.