Dealer interest spikes in other finance programs
The demise of Leasecomm Corp.'s dealer program last month, following major cutbacks in ADT's Authorized Dealer program, have sent many dealers enrolled in those programs looking to other sources for assistance. Officials at those companies report an overwhelming amount of interest.
More than 340 dealers in Leasecomm's program were notified in mid-October that effective immediately, the company would cease all new account funding. ADT told its 700 plus dealers in September that it was cutting funding for the program to focus on accounts with higher credit scores.
"We have got more dealers interested in doing business with us," said Dave Hill, sales manager at Security Alarm Financing, based in San Ramo, Calif. "We've got a couple of hundred dealers in our program and a couple of hundred prospects we're talking to as a result of ADT reducing their funding and Leasecomm."
Such a plethora of dealers looking for alternative financing means that current programs can have their pick of both dealers and accounts, experts said, although being highly selective is a large element to success, said officials at some dealer programs.
"Our program has remained relatively stable as far as the quality goals we have and our criteria for purchasing accounts and our thorough due diligence," said Michael Gregory, vice president of marketing at Monitronics in Dallas. "We have had growth over the last two months on top of our normal growth that we experience in our dealer program."
With about 300 dealers in its program, Monitronics is currently monitoring about 400,000 accounts with the capacity to go well over 1 million. The company also does contract monitoring hundreds for other dealers, Gregory said.
Officials at SLP also reported a high volume of phone calls from dealers, particularly ones from ADT.
SAFE's due diligence includes the filing of a Universal Commercial Code filing with the secretary of state's office, a document that will notify other lenders that a lien has already been placed on that dealer's accounts. The filing would come up in a background or credit check, Hill said.
"When we get dealers in who are in a current dealer program, we'll find out that they do not have UCC liens against them by other funding companies," Hill said. "It's another way to protect the financing company."