Arra Finance, a subprime indirect auto finance company, finalized its acquisition of the auto finance division of Crescent Bank and increased its funding capital sources.
Arra’s acquisition of Crescent Bank’s auto finance division closed on Sept. 15. The transaction also added an established servicing system, infrastructure and larger team, which will allow Arra to service Crescent Bank’s $770 million auto loan portfolio in addition to Arra’s own loans.
With the support of Obra Capital, Arra has entered into a multi-year forward flow agreement designed to ensure its supporting capital base can scale in tandem with the rapid growth of its business. Through its capital structure, Arra has also secured access to a credit warehouse facility with Goldman Sachs, providing readily accessible senior warehouse financing. Taken together, this wider pool of funding capital and ability to generate consistent long-term cash flow allows Arra to match its expanded origination capacity with a financing ecosystem operating at scale.
“Arra is set to advance the subprime auto financing market. We have built a platform tailor-made to meet dealer needs, with near immediate credit application response times and a strong financing pipeline,” Kenn Wardle, CEO of Arra, said. “With today’s announcement, we have the funding, reach, technology and analytic capabilities necessary to deliver routinely positive results for our dealers at significant volume. We are thrilled to enter this next phase of growth for our business.”
Steven Lackowski, chief financial officer of Arra, added, “Arra has established an innovative and durable capital structure, with flexibility enabled by continued support from Obra. Our capital strategy continues to be a key differentiator as we can offer efficient products for dealerships, borrowers and investors. In preparation for our entry into the ABS market, we have enhanced the scalability of our platform, improving our ability to meet dealer needs with diversified, reliable capital sources and positioning Arra as the trusted partner dealers can count on to fuel their growth.”
Blair Wallace, president and CEO of Obra, said, “In just a few short months, Arra has executed on key growth objectives with speed and precision, emerging as a leader in the subprime auto finance market. With expanded capital markets access, we see considerable opportunity for Arra to capitalize on its industry positioning, establishing a new model for operational excellence and strategic execution.”
