The Batesville, Ark.-based division of First Community Bank funded $73 million in powersports loans in 2016, with a goal of reaching $150 million by yearend. The company makes loans for more than 1,800 dealers in 48 states.
While Dealer Direct works to double its 2016 volume, it’s also preparing to launch a new website and logo, National Sales Manager Jon Vestal told Powersport Finance. “Our identity and email domains were FirstCommunity.net, and while that’s a strong brand in Arkansas and in the south, we needed a more national brand because our program is a national program,” he said.
Powersports Finance spoke with Vestal about Dealer Direct’s plans for growth, refining its underwriting without automation, and what 2018 has in stock. Following are edited excerpts from the interview:
Powersports Finance: How has the Dealer Direct business evolved over the past few years?
Jon Vestal: We were heavily focused in the lawn and garden and zero-turn lawn mower market exclusively for the first several years. We looked at the powersports market as the larger market where we could really make some inroads with different manufacturers because there are quite a few United States manufacturers that need retail financing help. There are several solutions that are out in the market that are regional, but not a lot of solutions are national for consumer financing. Most of the manufacturers are looking for a national solution that they can offer widely to their dealer network, and that’s what we offer to them.
PF: Is there anything you are doing differently in your underwriting this year as compared to 2016?
JV: We were able to really refine the underwriting process to offer the dealer specials all the way down to a 660 credit score, whereas before they were offered to higher-credit consumers. If you are a manufacturer working with us, you have that ability to offer that promotion to the full spectrum of borrowers. … If a consumer comes in and sees that a UTV has 0% financing for up to 48 months, even if they have a lower credit score they can now get approved for that promotion, whereas before they couldn’t. That’s helped a lot, and that’s just refining what we do to reflect the market.
PF: Do you have automated underwriting?
JV: We don’t. We could but the only automation is if they are under the age of 18 or their credit score is below our minimum. The reason we don’t is that our response time is five to seven minutes for an answer, and we’ve found if you’re really trying to automate the system for underwriting purposes there’d be more declines. It’s important to us to really make sure we have the best loan decision we can and our dealers have really responded saying, “You know we’d be willing to take an extra five minutes if we knew we got the final loan decision.”
PF: What is on the road map for 2018?
JV: In the fall, we have a lot of dealer meetings that we attend and we work with those dealers to do retail financing seminars, not only the mechanics on how to submit applications and things like that, but we talk about strategically how to use retail financing to leverage sales. … We are going to be at the Green Industry Equipment Expo and the American International Motorcycle Expo, and I’ve got a slate of manufacturers that we are meeting with to discuss possible retail financing. So, what does 2018 look like? Hopefully just like 2017 but bigger with more manufacturers. We want to add quality growth and originations through our current dealers, but we also want to add additional manufacturers and multiply our dealer network to the degree that their dealer network is involved.
This article originally appeared in the third-quarter issue of Powersports Finance. To view the full digital magazine, click here.