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Thursday, Jul 18, 2024

Woodside Credit Floors It

Woodside Credit has collected a growing base of car-loving, and car-collecting, customers.

As tourism restrictions put a temporary stop to air travel, locals turned to the new and used car market to get out of town, and the Newport Beach-based auto financing company was ready to take advantage of the changing tides.

“Car enthusiasts were eager to acquire their next car and hit the road,” said Mitch Shatzen, president and chief operating officer. “We were already on a strong growth trajectory, but [the pandemic] gave us a nice boost.”

As of last week, year-to-date loan originations were 40% ahead of 2020 levels, representing the 12th consecutive year of record growth for the company, which provides financing for buyers of classic, collector and exotic cars.

Revenue of $19.9 million for the year ending in June is about 62% ahead of 2019 levels, earning the company the No. 16 spot in this year’s list of the Fastest-Growing Private Companies, in the midsize category, for those with between $10 million and $100 million in annual revenue.

Business Model 

Woodside has surpassed $2 billion in loan volume since its founding in 2003 by Roger Kirwan, a financial services industry veteran who founded Ganis Credit Corp. in 1980 and is credited with revolutionizing financing in the recreational vehicle space as the first to offer 15-year loans for RVs. 

He sold Ganis to Bank of Boston in a 1995 deal.

At Woodside, Kirwan introduced 12-year loan terms for cars priced over $100,000; two years ago, that structure expanded to 15-year terms for cars over $200,000.

“That allows our buyers to have very attractive payments instead of tying up a lot of money in the process,” said Shatzen, who worked with Kirwan at Ganis, and rejoined him at Woodside in 2008.

The company primarily originates loans by pairing with dealerships in 17 states. It also offers direct loans through dealerships in all 50 states.

Woodside packages and sells its loans to more than 15 community banks in 4 western states, including Costa Mesa-based Pacific Mercantile Bancorp (Nasdaq: PMBC), Irvine-based CommerceWest Bank and Irvine-based Commercial Bank of California. 

“Local banks have been instrumental in helping us grow our business,” Shatzen said.

Savvy Borrowers 

Woodside provides loans up to $600,000, with the average price hovering around $90,000. The median annual income of the average borrower is about $243,000, Shatzen notes.

“These are savvy borrowers that are only looking to make smart financial plays,” he added.

Another customer source for Woodside is auction buyers; the company has been the exclusive loan provider for more than a decade for the Barrett-Jackson Auction Co., which hosts four auctions per year with about $200 million in total sales volume.

Woodside recently started offering electronic loan documents through eOriginal, marking a notable shake-up for an industry that can be slow to innovate.

Shatzen notes Woodside is unique for three main things: “providing the lowest monthly payments in the nation, offering common sense lending with more than 25,000 applications per year, and providing professional and personal customer service.” 

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