Subprime lender Arivo Acceptance has secured an expandable $200 million warehouse line of credit with JPMorgan Chase, Steve Pachella, chief financial officer, told Auto Finance News. The warehouse facility comes on the heels of an inaugural $166 million securitization — the Sandy, Utah-based lender’s entire book of business — last month.

“Obviously JPMorgan is one of the biggest — if not the biggest — warehouse and securitization underwriters in the business. We’re happy to be right in the mainstream with everyone else,” Pachella said.

Arivo previously had a syndicated credit line with Cantor Fitzgerald since October 2018, which the lender closed out after its securitization, Pachella said. Prior to its line with Cantor, Arivo had a line of credit with Ally Bank.

Arivo — which was founded in March 2017 — is a subsidiary of Ken Garff Enterprises, a network of more than 50 dealerships throughout the Southwest, Pachella said, noting, however, that Arivo mainly lends to dealers outside of that dealership group. “We’re probably 97% non-Garff dealerships,” he added.

 

“It’s not that we don’t want to lend to the Ken Garff Group, but we also feel its important for us to be an independent company and show we can be profitable,” Pachella explained. “We think that’s important from a capital markets and rating agency standpoint — we’re not just a captive.”

Arivo lends in “seven or eight” states — primarily in the southwest region, with Texas providing its largest volume — but is licensed in “15 or 16” states, Pachella said. Average loan terms hover around 70 months but don’t exceed 72 months.

Looking forward, Arivo is focused on sustained profitability, with an eye toward “judicious” expansion “where it makes sense,” Pachella explained. “The idea is to create a profitable, efficient company that’s going to be around for a long time,” he said.