Dealer Funding
Introductions
Will Chandler
Regional Director, So. Atlantic
Thad Sykes
Divisional Vice President, Central Region
Will is responsible for the
management and oversight
of all aspects of NextGear Capital’s business
operations in his region.
Thad Sykes is responsible for the strategic
planning, operations, sales, product
development and services for the company’s
key dealer accounts in the Central Division.
He has more than 15 years of experience within
the financial services industry. Since joining the
company in 2008, Will has held several positions,
including General Manager, Field Operations
Specialist, Account Executive and Regional
Director. Prior to his time with NextGear Capital,
Will worked in various capacities in the
consumer finance industry.
Thad has more than 20 years of experience in the
financial services industry. Since joining Dealer
Services Corporation in 2007, he has held several positions,
including General Manager and Account Executive and
Regional Director. Prior to NextGear Capital, Sykes served in
numerous capacities with Wells Fargo Financial, Bank of
America and American Home Mortgage.
Topics of Discussion
Who is Next Gear Capital?
Floor Plan 101
The Impact of Flooring
Leveraging Your Floor Plan
Relationship
Who Is NextGear Capital?
MAFS + DSC = NextGear Capital, Inc.
• Narrow focus – drive auction volume
• Well Capitalized
• State of the Art Technology
• Leading independent floor plan financing
provider to non-franchise dealers
• Experienced Management Team
•
•
•
•
Key financing arm of Cox Automotive
Rebranding of DSC and MAFS in 2013
Broad Aggressive Growth Strategy
54% growth in AR in 1st full year of combined US
operations (2014)
NextGear Capital Snapshot
Snapshot
Dealer Concentration
Total Portfolio
$3.8
billion
Total Line of Credit Outstanding
$6.2
billion
Total Flooring Count
362,046
Number of Active Dealers
17,536
Number of Contracted Dealers
21,190
Avg Financed Amount per Active
Dealer
$215,041
Avg Line of Credit per Active
Dealer
$353,994
Average Loan Amount
$11,100
% Delinquent
(1)
1.39%
Note: US data as of December 31, 2015
(1)
2015 monthly average; receivables unpaid past their due date
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“Dealer Direct” Business Model – Key Division
NextGear has developed a strategy to maximize market penetration and minimize portfolio risk by
having multiple touch-points with dealers
Account Executives organized by
geography – 3 divisions
19 regions
220 markets across the
continental United States
Sales Executives (“SEs“)
►
49 SEs separated into geographical
regions, each lead by a Regional Sales
Director
►
Focus solely on developing new
relationships
►
Each SE works closely with its AE in
their assigned territory to meet and
exceed budgeted goals
DDBM allows NextGear Capital to
be in-market with the dealers,
on-site at the dealer’s place of
business
NextGear Capital
“Dealer Direct” Business Model (DDBM)
Account Executives (“AEs“)
►
220 AEs are responsible for the
development and management of a
floor plan portfolio within a defined
territory
►
AEs typically manage between 75 –
120 contracted dealer relationships
►
As a particular market grows beyond
120 contracted dealers, NextGear will
create another market area and hire
another AE
Field Auditors
►
Auditors conduct dealer field audits
focused on mitigating collateral risk
►
120 personnel strategically
positioned within NextGear markets
►
Conduct regular, unscheduled on-site
dealership audits
DataScan ( Industry Leader)
►
Private & Confidential – Do Not Distribute
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OUR BRANDS
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Floor Plan 101
Inventory Finance Solutions
Protects
cash flow
and capital
Allows
adequate
stocking of lot
Promotes
sound
inventory
management
and turn time
Professional
consultation
Wholesale Floor Plan – How It Works
Receivable created at the time the advance is made and is
secured by first lien on vehicle perfected by UCC filing
Receivable is sold into the master trust to provide the
collateral to support the outstanding securitization Series
Source (Auction)
Dealer
Dealers
Consumer
Floor Plan Financing Providers
Floor Plan Financing Uses
►
Independent dealers don’t get funding
from manufacturer captive finance
►
Short-term inventory secured
advances
►
NextGear Capital finances up to 100%
of the wholesale cost of the vehicle
►
Provides liquidity to increase
inventory
►
Inventory optimization
►
►
►
Advances and balances treated on a
vehicle-by-vehicle basis
Cash is advanced straight to the
vehicle source (primarily auctions)
Title is received directly by NextGear
Capital
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Competitive Landscape – Key Division
NextGear Capital maintains #1 market position and competes primarily with the following types of
financing providers
AFC & Ally represents primary competitor in the independent dealers
floor planning space
6 competitors at various entry points throughout the portfolio:
regional (Auto-Use, CarBucks), lower end units (ACE, Floor Plan
Xpress), higher end units (Westlake)
5 companies that would generally be competitive in
the higher end vehicle category
~12 companies similar to Tier 3 except smaller
size
Other providers
This tier represents about 100
different companies
Private & Confidential – Do Not Distribute
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The Impact of Flooring
The Value of Dealer Funding
(To Auctions and Sellers)
Increased Sales via Increased Online and “In
Lane” Purchasing Cash
Increased Working Cash for Auction –
Decreased Collections and Outstanding A/R
Flooring Dealer’s Impact on Sales
Vehicles Sold at Auction paid by Inventory Finance
37%
Excludes OEM factory programs
2015 Manheim Consulting
Flooring Dealers Impact on Sales
Average Vehicle Floored 2015
2008
$12,400
92,000 miles
3.5 Condition Grade
2015 Manheim Consulting
Leveraging Your Floor Plan
Relationships
Leveraging Your Floor Plan Relationships
Do you know your point of
contact with your dealer’s
floor plan lenders?
How often do you
communicate with them?
• Aging Dealers
Data that can be obtained
• Heavy Buyers
verbally from most Field Reps
• Large Volume Wholesale Sellers
Leveraging Your Floor Plan Relationship
307k Units Floored by
NextGear Capital with
Independents
588k Units Floored by
NextGear Capital with
Association Affiliated
Auctions (Non
Manheim/Adesa)
What lenders provide the
greatest impact on flooring
at your auction?
What lenders have market
presence and could have a
greater flooring impact?
Leveraging Floor Plan Promos for Success
Traditional low buying season
BE SELECTIVE
& CONSERVATIVE
In Frequency
Large volume of inventory to liquidate
Heavy buying season if you are fighting
for market share
New presence or new business model
Circling Back
Who is Next Gear Capital?
Floor Plan 101
The Impact of Flooring
Leveraging Your Floor Plan
Relationship
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Contact Us at NextGear Capital
220 Local Market Account Executives
• [email protected]
• [email protected]
Thad Sykes/Will Chandler
• [email protected]
• [email protected]
www.nextgearcapital.com
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