American Cycle Finance has raised “substantial” funding through private investors after an acquisition of the company was rescinded in August 2017, Managing Director Ben Donnarumma told Powersports Finance.
The capital includes “one large investment from one [entity] who is a major player in the subprime industry,” he said. Because of this, the lender is in a “great financial position.”
American Cycle — formerly known as Ride Today Acceptance LLC — intends to double its portfolio in 2018 through additional funding and credit lines, he said.
The new lines of funding come after Cardiff International Inc. decided to “unwind” its acquisition of the subprime lender. At the time, the acquisition would have transformed ACF into a subsidiary in an all-stock transaction valued at $5 million. Donnarumma declined to say why the deal was nullified after an initial closing in April.
Upon rescission of the contract, American Cycle Finance will keep its finance business and Cardiff does not have to issue the stock, according to a Securities and Exchange Commission filing. Cardiff believes the termination of this acquisition is “in the best interest of its shareholders,” according to the filing.
The lender ended 2016 with a portfolio of more than $7 million, and losses of less than 1.6%, according to SEC filings.