AUSTIN, Texas – One of the great time sucks of the F&I department is re-keying customer information for every loan application. Jason Guss said he started Octane Lending to put an end to that.
The startup company offers free software that enables dealers to apply to all of their existing online lenders from one form without rekeying information and to optional additional lending sources Octane provides. Dealer applicants enter the customer’s information once, then retains the information across multiple loan applications.
The goal is to later this year open a free online portal that will do one "hard" credit pull for multiple applications.
"Before we can launch the pre-approval platform, we believe we need to get about 200 dealers signed up so that lenders will make the investment to be able to accommodate pre-approvals," Guss said.
The company offers access to several subprime as well as prime lenders. Since the platform aggregates pre-approvals, banks can use a “soft pull” credit check. That lets dealers send out applications simultaneously and choose from among a list of offers, the company said.
So far the company has signed up 50 dealerships with a combined 36 stores, mostly in Texas.
Guss left Capital One in September to start Octane Lending. He received venture backing in December from DreamIt Ventures, moved from Seattle to Austin in January, and started offering the Octane Lending beta product with the first 10 dealers Feb. 22. Octane has three core employees, two part-time salespeople and two part-time developers.
Although most of Octane's dealers so far are in Texas, Guss's goal is to make Octane a nationwide product. The software is set up to accommodate numerous lenders and applications, and dealers can add their own lenders, although it may take a week or two for Octane to get new forms into the system, he said.
Once a dealer registers and logs in, it has access to information on Octane's partner lenders and their target markets. The dealer also can add lenders, according to Guss.
“Anyone in the business can use it. It probably has the most value for used dealers” and dealers that are not aligned with OEM financing companies, Guss said.
The company makes its money from lender referral fees. “We get loan referral fees from our sponsor lenders, and we are very upfront about who our sponsor lenders are,” Guss said. “Dealers are not under any obligation to submit applications to those lenders.”