ARLINGTON, Texas -

Sometimes, too many cooks in the kitchen can be a recipe for disaster.

But Agora Data championed a financial dish with several buy-here, pay-here operators and smaller finance companies that the tech firm says “represents a quantum leap” for their access to capital markets funding.

This week, Agora Data announced the successful closing of what it believes is the first-ever crowdsourced auto securitization; a development that came to fruition on Dec. 29.

Fueled by artificial intelligence and machine learning, Agora Data aggregated numerous originators with portfolios ranging in size from $11,000 to more than $20 million into a single capital markets securitization. Agora Data chief executive officer Steve Burke highlighted three specific achievements, including:

• One dealer had a $10 million portfolio paying its senior lender 14% with a 60% advance rate, personal guarantees, restrictive financial covenants and was at full capacity, so he could not sell more vehicles.

• On Dec. 29, that senior lender was paid off in full. The dealer’s new rate is 6.5% with a 62% advance (cash out over and above senior lender payoff), plus residual cash based on the quality of receivables, no personal guaranty and no financial covenants. Now the operator can build up another $10 million with consistent underwriting.

• Within 12 months, that dealer will have doubled the operation’s portfolio, cut the interest rate by more than 50%, increased the advance by 3.5% and can repeat the again.

Prior to Agora Data’s technology, Burke pointed out that direct access to the capital markets with more favorable financing terms was limited to only the largest institutional lenders and auto dealers. With an AgoraCapital crowdsourced securitization, Burke said subprime originators of all sizes now have a “unique and viable” financing option to obtain lower-cost capital providing liquidity and fueling growth.

“AgoraCapital has revolutionized access to affordable and abundant capital for the BHPH dealer and small to mid-tier finance companies,” Burke said in a news release. “This type of transaction has never been accomplished before due to the complexity of different originators and lack of technology.

“We have overcome all of these obstacles and we are energized by this achievement that will unquestionably shape the future for dealers, finance companies, capital markets and consumers,” he continued.

Agora Data chief revenue officer Chris Hawke described how the firm worked with numerous different shops to create a product to benefit all of the participants.

“We effectively aligned numerous buy-here, pay-here dealers and finance companies into a single transaction,” Hawke said. “This successful transaction further validates Agora Data’s mission to develop financial solutions that advance the growth of BHPH dealers and finance companies in ways previously unimaginable.”

For more information, visit www.agoradata.com or contact Agora Data at (877) 592-4672 or contactus@agoradata.com.