Ottawa-based sub-prime auto lender OCM Auto Financing Group Ltd., is bolstering its lending energy, eying growth as used-vehicle costs stay excessive, and extra consumers fail to qualify for prime loans amid increased rates of interest.

“There’s extra demand in sub-prime as we speak than there was three years in the past, pre-pandemic,” firm CEO Andrew Abraham informed Automotive Information Canada. “Extra persons are struggling to get approvals on the huge banks, so there’s positively extra demand, extra prospects.”

As with different non-prime auto lenders, OCM supplies automobile loans to newcomers to Canada, these with poor or no credit score, and others unable to faucet financial institution financing, Abraham mentioned.

“At any time when the financial institution says no, we’re there to backstop them.”

OCM works with 800 auto dealerships throughout Ontario and Quebec, reserving enterprise with roughly 250 of these retailers in any given quarter, Abraham mentioned.

And because the sub-prime auto lending market features traction, the corporate is pursuing progress throughout each provinces.

OCM introduced it had secured a brand new credit score facility from CWB Maxium Monetary Inc., an arm of Edmonton-based Canadian Western Financial institution, April 20. The brand new facility combines with funds from current accredited traders, rising the scale of OCM’s complete fund to $100 million.

The bigger fund will enable the corporate to offer loans to extra sub-prime automobile consumers, as demand for financing amongst those that don’t qualify with the massive banks grows, Abraham mentioned.

Given lingering manufacturing constraints, resulting in a restricted stock of latest automobiles, Abraham expects used-vehicle demand to stay excessive.

“None of us have a crystal ball to know when and if the provision chain ever goes again to the place it was in terms of new automobiles. Till then, the used market goes to do nicely.”

Used-vehicle costs have softened in current months, Abraham added, however automobiles are nonetheless holding their worth nicely, and he doesn’t anticipate a return to pre-pandemic used-vehicle costs.

OCM, which was based in 2018 and employs about 30 workers as we speak, plans to stay targeted on the Ontario and Quebec markets, although it has thought-about shifting into different provinces so as to add to its community of sellers.