Alternative Data Spurs Record-Low Delinquencies for American Cycle Finance

American Cycle Finance reported its lowest delinquencies on record last month, after the lender ramped up use of alternative data for credit decisioning, Managing Director Ben Donnarumma told PowerSports Finance.

“We have made some improvements with technologies,” he said, referencing the company’s use of alternative data, which has “given us more information to do our job.”

American Cycle has been testing alternative data for the past couple years, but is now honing the data more efficiently. “Over the past eight months, we really made some strides in putting all of the pieces of the puzzle together to do our job in the best way we can,” he said.

American Cycle Finance — which specializes in subprime and nonprime financing — is “mitigating [subprime] risk, analyzing it,” on a day-to-day basis, Donnarumma said.

American Cycle has had “really good luck with subprime,” he said, noting the company’s record-low delinquencies in late October. “We are doing a lot of things right,” he added.

The subprime lender was acquired by public holding company Cardiff International in February.

American Cycle Finance — formerly known as Ride Today Acceptance — began making loans for on-road motorcycles in 2015. The lender makes loans for 265 dealers in 15 states and ended 2016 with a portfolio of more than $7 million.

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