Fintech company Car Capital has closed an $8.8 million Series A funding round that will enable it to launch its auto loan business across several states.
The Grapevine, Texas-based startup specializes in facilitating fast loan applications for car dealerships, promising a completely automated approval process and offering loans regardless of the customer's credit background.
A dealer submits a customer application through the company's Dealer Electric Auto Loan System (DEALS), which provides deal structures for all the cars on the dealer's lot. It shows the dealer's projected profit, enabling them to find the most profitable vehicle that is affordable for the customer.
Car Capital specifies no minimum number of deals, and it funds delinquent loans from a pool of loan capital. The company charges an upfront boarding fee and makes a 20% margin on the customer's loan payment. This opens up automated loan approvals to the subprime market.
"Anyone, no matter their credit situation, should be able to buy a car for personal transportation, particularly during these trying times,” said president and CEO Justin Tisler.
Tisler co-founded the company in January 2020. He comes from a financial background, having been managing director at US ABS Capital Markets and President of boutique advisory firm KentMoore Capital.
The funding round coincides with its official launch. It began rolling out the web portal-based service to a series of dealers in a beta test in mid-March and plans a larger deployment in the coming weeks, it said.
FM Capital led the funding round and was joined by over 50 individual and institutional investors, including Automotive Ventures and Medalist Partners.
Car Capital is currently licensed to operate in Florida, Georgia, Illinois, Indiana, Ohio, Oklahoma, Tennessee, and Texas according to its website. The funding round will help it expand to serve additional states in the future, it explained when announcing the launch.
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