Banking can sometimes seem boring, but there are always bright spots in the industry and areas where growth and excitement are the norm. Specialty lenders like Consumer Portfolio Services that focus on the automotive market, for example, have been the subjects of some of the most interesting financial stories of recent times. With some of these companies continuing their record-setting stretches of consistent growth, a look at how they have achieved such results could be enlightening.
Filling the Void Left by the Retreat of Conventional Lenders
Many consumer lending markets were fundamentally transformed in the aftermath of the last major economic meltdown. With traditional lenders retreating from certain niches and tightening up their standards in general, a period of clear retrenchment emerged.
Fortunately, a new generation of more flexible and ambitious lenders cropped up to fill the gaps that resulted. With many of these companies receiving generous financing from venture capitalists and other creative investors, new ways of providing the financing consumers sought started to become available.
A Firm Focus on the Fundamentals Pays Off Over the Years
Naturally enough, some of these newcomers failed to gain the traction and momentum they needed. While there have been a number of prominent failures, there have also been some truly impressive success stories.
Some of the leaders in the field of indirect automotive financing, for example, have by now amassed records that are unlikely to be matched by lenders of any others kinds. With one of the top performers in this area having recently announced its twenty-seventh consecutive quarter of earnings growth, it is clear that certain of these ventures have figured out the business.
What that means tends to boil down to a few basic features. For one, the most successful indirect lenders inevitably have a notable facility for turning certain parts of their portfolios into securities. Being able to quickly convert debt into assets that can be easily sold to investors allows these specialists to free up capital on demand and use it for seizing new opportunities.
Another important feature of the most successful players in the field is the ability to keep a close eye on delinquencies and underperforming loans. When these two strengths come together, some impressive results can follow.