As an executive in the financial business, David Braeger spent seven years financing auto credit facilities for brokerage firms. Now, Braeger has taken the passion his father had for the auto industry and branched out on his own. After the financial crisis, he observed that nationwide, the growth of independent dealers credit facilities halted when they could not get traditional financing. They were unable to keep up with the demand for consumer loans. Braeger was able to solve the problem by forming Braeger Auto Finance Group and implementing the first business model driven by investor’s funds to support auto dealership credit facilities.
“We are helping to connect car buyers such as the mother that has to wake up at 3:00 a.m. to take her kids to school on two buses and then take another few buses to get to work,” said Braeger.
Most traditional lending sites loan to individuals. But, Braeger Auto Finance Group may be the only crowd-funded model lending to independent finance companies. Braeger points out that his business model has significant advantages over traditional crowd-funding. “It is recommended that you invest in 100 loans or more on a simple $5,000 investment to get your desired rate of return. “We are investing in multi-million dollar credit facilities with thousands of loans in portfolios in which tremendous due-diligence has been done by us and our partners,” said Braeger.
“Do you want to invest in the “faith” of individuals paying the loan back, or do you want to invest in diversified million dollar credit facilities backed by two assets: the cars and the loan portfolio? We have taken it to the next step of crowd-funding. We are investing in the credit facility making the loans to individual investors.”
Because of the large number of loans in the credit facility, Braeger’s portal, www.vroombank.com prompts investors to set up an account, select a fixed investment: a three, four, or five year note, yielding 7%, 8% or 9% respectively and receive quarterly interest payments sent out automatically. Investors can also invest by reaching the executives directly on www.braegerfinancial.com.
Tremendous due diligence is done on auto finance companies prior to working with them. This includes site visits to make sure that dealerships meet strict terms Braeger mandates before they can to participate. All portfolio numbers are looked at. Risk is spread out across a vetted group of auto finance companies. On Vroombank.com, Investor funds flow through the portal company to an authorized Financial Industry Regulatory Authority (FINRA) broker/dealer. Braeger said that adds another layer of safety, “You know where your money is going and you know it is regulated.”
With over 55 years of financial experience, Braeger Auto Finance Group has raised approximately $6 million dollars with a new $3.8 million dollar deal that has just closed. All this success has come in just over one year. One of Braeger’s dealer clients is Drive Away Auto in Houston. CEO Bill Kelleger puts it this way, “We are in an incredibly lucrative business if done honestly and correctly.
David’s company and his industry peers who I know, do incredible diligence on each finance company. During our relationship, Braeger Auto Finance Group and his new community lending site VroomBank.com have allowed us to grow our credit facility from an approximate $3 million to close to $38 million with the access we now have with traditional lenders. It is truly the most creative auto credit finance models I have ever seen. The demand for what they are doing is why they are getting so much attention.”
“The individual investor finally has the opportunity to invest in the $100 to $200 Billion auto finance sector,” said Braeger. “Individual investors can now get in on the action of auto credit financing, once open only to institutions. It’s an exciting time and we invite investors to join us.”
Braeger Auto Finance Group is a privately-owned, Milwaukee-based automobile financing company. Our mission is to provide financial services of superior quality to independent automobile dealers, and our qualified investment partners by exceeding expectations through focusing on solid fundamentals to achieve superior investment returns. www.braegerfinancial.com and www.vroombank.com.