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2021-01-25 Agora Data changes the trajectory of auto financing with crowdsourced securitization

Agora Data changes the trajectory of auto financing with crowdsourced securitization


Unlike major car dealership groups, Buy Here Pay Here dealers have struggled with accessing affordable capital.  It’s a vicious cycle where BHPH dealers are making personal guarantees and paying high interest rates.  The business model is all too familiar for dealers that make up over 70% of auto dealerships in the United States.  Fortunately, there is one company looking to change the way auto financing works – all through advanced technology with robust analytics, artificial intelligence, and opening of a new funding channel to access capital through a crowdsourced securitization.
Arlington, Texas-based company Agora Data announced that on December 29, 2020, they closed the first-ever crowdsourced auto securitization. This revolutionary development in the world of structured finance represents a quantum leap for Buy Here Pay Here dealers and smaller finance companies.  It’s a game changer in terms of their access to capital markets funding.
Agora Data aggregated numerous originators with portfolios ranging in size from $11,000 to more than $20 million into a single capital markets securitization. We spoke with one of those originators, Steven and Kerri Watkins, owners of Watkins Auto Sales in Mississippi.
“We were spending a good part of our day focused on paying back the interest on our debt,” said Watkins. “Buy Here Pay Here Dealers have been forced by the banks to operate that way.”
Watkins explained that their Buy Here Pay Here dealership had a line of credit with a small-town bank starting in 2007.  Several years later, that bank was acquired by a regional bank who did not like asset-based lending.   In 2016, the bank told Watkins that they didn’t want to continue to renew the loan.  When looking to move the loan, their option was to move it to a loan with an interest rate between 12-15% with personal guarantees. Within the last year, they learned of an alternative option with Agora Data.
“We want to grow,” added Watkins.  “The main reason we want to continue working with Agora Data is to have the ability to grow quickly and safely.  Our plan is to participate in the securitizations to lower and ultimately eliminate our debt.  If I had to do it again, absolutely, yes, I would.  In fact, we plan to participate in Agora’s second securitization.”
Watkins added that while there was a big learning curve with the first securitization, it was incredibly rewarding to be part of something that has the potential to change the industry.
“Other dealers I have spoken to are reluctant about this securitization model because they think giving up their collections will mean giving up their customer relationships.  But that is not the case.  It’s still your accounts, your customers and your relationships.”
Watkins highlighted the fact that they have more time to focus on other areas of the business now that the repossessions and collections are outsourced.
“This could be a game changer for our industry,” Watkins added.
Agora Data is aiming to close multiple deals in 2021. In the future, they plan to help more dealers participate in their crowdsourced securitization and the process is underway now for the next one.  According to Agora, they have more than 200 dealers and finance companies interested in their second deal.
About Agora Data, Inc: Agora is re-inventing auto finance for Buy Here Pay Here dealers and finance companies with a crowdsourcing platform that bridges access to the capital market. Easy to use and analytically robust business tools empower the untapped and diverse portfolios of the BHPH auto market connecting dealers, sub-prime buyers, and capital market lenders with results-driven resources to enhance financial growth. Founded in 2017 by a best-in-class team of top professionals in auto finance and leading data scientists, the company has successfully combined billions in historical loan performance data to develop its AI-Infused predictive loan technology and machine learning models. For more information, please contact Agora at (877) 592-4672 or