The lending market seems to have improved since last summer when we published our “Guide to Powersports Lenders” at www.dealernews.com/lenders. But smart dealers remain on the outlook for new lenders or brokers.
We didn’t include MB Financial Bank in last year’s guide, but its Indirect Loan Program provides retail loans and commercial banking services to motorcycle dealers nationwide. The bank recently sent us answers to our survey, and we’ve added an entry to our guide. We also present its answers below.
MB Financial Bank, N.A.
800 W. Madison St.
Chicago, IL 60607
Types of units financed: Motorcycles, typically cruisers or touring models, of the following brands: Harley-Davidson, Ducati, Triumph, BMW, MV Agusta and KTM. About half the bikes financed are used. The bank will go back as far as NADA does (currently 1995), as long as the unit has an average retail value of at least $6,000.
States in which it does business: MB Financial will consider any new franchised dealer within the continental U.S. that carries the models it supports. The bank has about 500 dealers in 46 states. “We do not look for a minimum amount of deals per month to consider a dealer active,” the bank’s Charles Schaefer says. “We believe the dealer should place the contract where they get the best value, whether that is service, rate, term, advance amount, or dealer reserve amount. As long as we are consistently receiving contracts, we count a dealer as active.”
Setup costs: There is a $250 Dealer Application Fee. “This is a one-time fee that most dealers recoup within the first few contracts placed with us,” says Schaefer.
Lowest FICO score accepted: “Typically, our niche is in A and B paper,” Schaefer says. “We manually underwrite every loan; therefore, no consumer is rejected simply based on score.”
Range of loan amounts: The loan amount should typically be at least $6,000, but the bank might make exceptions in cases with large down payments.
Range of down payments required: The required down payment usually depends on the customer’s credit or the term requested. MB Financial does offer no-money-down options.
Range of term lengths: Usually 24 to 96 months, depending on the product, the customer’s credit-worthiness, and/or the deal parameters.
Range of interest rates: Dealers can obtain rates as low as 4.99 percent APR. All loans are simple interest loans.
Discount fee charged: None. “Discount fees are typically charged on subprime customers,” Schaefer notes. “Since that isn’t our niche, we currently do not charge one.”
Other fees: None.
Maximum amount advanced: For new units, MB Financial bases the loan amount on MSRP; for used units, it bases the loan amount on NADA Average Retail. “Advance amounts really depend on the strength of the customer,” Schaefer says. “We do not have set advance levels based solely on credit. We have advanced as high as 120 percent of MSRP.”
Stipulations: ”Unless we have requested stipulations on a specific deal,” Schaefer says, “our funding requirements are the typical documents. We do provide every dealer with a funding checklist. We also highly recommended that the documents be sent via our secured e-mail due to the speed, cost savings, and tracking options this service can provide. MB makes every effort to fund loans no later than 24 hours after the completed loan package is received. Loans are funded via ACH at no charge.” MB Financial requires the collateral to have full-coverage insurance for the life of the loan.
Participation: The bank usually offers a 70/30 split reserve with traditional reserve calculation. Dealer reserve is paid out in one lump sum per month. The bank usually has a 90-day chargeback period, so there is recourse back to the dealer.
Finder’s fee paid to dealer: Finder’s or flat fees depend on the loan amount and product. They range from $50 to $250.
Other: Dealers are not required to have a reserve account, but as a full-service commercial bank, MB Financial does have dealers who are part of its Premier Dealer Group. This entitles them to additional benefits due to their overall relationship.
MB Financial employees are available by phone, both work and cell, to answer dealers’ questions. Applications are submitted via fax, and the bank’s decisions are returned via fax and e-mail. On average, all decisions on a completed application are done in 15 to 20 minutes. The bank also recently signed an agreement with AppOne to offer an online application and contract process, which will be available soon.
The bank is open Monday, 9 a.m. to 6 p.m. CST; Tuesday through Thursday, 9 a.m. to 7 p.m.; Friday, 9 a.m. to 6 p.m.; and Saturday, 10 a.m. to 5 p.m.
”MB has been building relationships with motorcycle dealers for over a decade,” Schaefer says. “Our focus on lifestyle and not just motorcycles has allowed us to grow over the years. Our goal is quite simple: We want to help dealers move more iron while making more money. MB offers superior service along with the most competitive terms. Plus, MB is a full-service bank. That means that besides acting as your retail financing outlet, you also have access to an experienced MB business banker who can provide you with the financial tools you need to support your business.”