Needing Wheels: Prestige Financial Services focuses on auto buyers who are in the bankruptcy process. Its customers are "great people" who have a life event "that just causes them to spiral," said President Bryant Henrie.

Prestige Financial Services, a privately held subprime auto lender, is looking to spark growth by offering credit directly to consumers over the Internet.

The Salt Lake City-based firm specializes in lending to car buyers who are going through bankruptcy. It makes loans, mostly for the purchase of used cars, through roughly 2,600 auto dealers nationwide.

Prestige Financial does not have its own retail footprint. President Bryant Henrie said in an interview that the firm plans to use social media and loan referral sites such as Lending Tree to reach borrowers who want to refinance their existing auto loans.

"We'll position ourselves on the Internet in such a way that if they want a car loan, and they have less than less stellar credit, we could be an option for them," Henrie said.

Prestige Financial is looking to expand at a time when other subprime auto lenders, and the industry as a whole, have grown at a much faster clip.

Exeter Finance Corp., which is owned by the asset management giant Blackstone, grew its portfolio from $150 million to $2.8 billion between 2012 and early this year. Publicly traded Santander Consumer USA saw its total originations rise from $2.7 billion in the first quarter of 2013 to $7.6 billion in the first quarter of this year.

Earlier in 2015, Prestige Financial securitized auto loans that were worth $360.6 million when they were originated, according to a report by the rating agency DBRS. That number was basically flat compared to the two previous years; Prestige securitized loans worth $342.2 million in 2014 and $363.7 million in 2013.

Henrie said that Prestige Financial isn't interested in growing its business quickly in order to sell and move on. The company is part of a family-owned conglomerate that also includes the Utah Jazz pro basketball franchise and one of the nation's largest networks of auto dealers.

"We're very methodical in the way that we grow our businesses," Henrie said. "We're operators and not sellers," Henrie said.

Prestige Financial has carved out a niche offering auto loans to consumers who have recently declared Chapter 7 or Chapter 13 bankruptcy. Roughly 49% of the balance on loans the company securitized earlier this year, according to DBRS, went to consumers who were currently in the bankruptcy process.

"What we find is that it's not that they're bad people at all. They're great people," Henrie said. "And a lot of them just have a life event — a medical experience or a job loss or something like that — that just causes them to spiral."

The loans securitized by Prestige Financial in 2015 had an average interest rate of 18.2%, according to DBRS, and an average loan term of 70 months.

Those loan characteristics might suggest the company's borrowers represent a high-risk bet, but Prestige Financial benefits from the fact that many of its customers will have their earlier debts extinguished as part of the bankruptcy process.

The company, whose bonds have gotten a triple-A rating from Standard & Poor's, gets additional protection from rules preventing consumers from filing for bankruptcy twice in rapid succession.

As of the end of 2013, 3.36% of the firm's receivables outstanding were at least 31 days delinquent, according to S&P. That was far below the 8.78% average at subprime auto finance companies.

Henrie doesn't expect the firm's new direct-to-consumer business to rival in size its existing business with auto dealers. The growth of the new offering will also be limited by state licensing issues. Prestige Financial is currently licensed to make direct auto loans in only 23 states.

Still, Henrie anticipates that the direct auto loans will appeal to car owners whose credit has improved since they took out a loan. In time, Henrie also anticipates financing person-to-person automobile purchases, though he said those transactions are more complex than refinancing existing loans.

"We're 21 years in business," he said. "We've developed an initiative where we can take the machine that's already built and use it in another area of financing automobiles."

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