Behind Gateway One's 'high-tech, high-touch' approach

Gateway One Lending & Finance, a relatively small but growing auto lender, assigns dedicated teams to specific dealerships, to encourage closer dealer relationships. COO Todd Pierson refers to the strategy as “high-tech, high-touch.”

Founded in 2007, Gateway was acquired by TCF National Bank in Wayzata, Minn., in November 2011. Gateway offers auto loans via 10,100 dealerships in all 50 states, about equally divided between new-car dealerships and independents.

Its outstanding auto loans were $1.7 billion as of Sept. 30, up from $1.1 billion a year earlier. Used cars make up about 75 percent of the loan portfolio.

Pierson spoke about the business by phone with Automotive News Special Correspondent Jim Henry.

How would you describe Gateway’s growth? Is the company moving into new states, or is it doing more business in the states it’s already in?

Until 2011, we were probably in 30 states. It wasn’t until the beginning of 2014 that we were in all 50 states. Two big reasons why we’re in all 50 states are one, a diversification strategy and two, we are aligning with many of our national dealership group relationships. They want a lender that’s in all the states they’re in. That’s why we filled in all of the states beyond the top 40 or 45 states we were already in.


There are more to approvals than credit score, but what’s Gateway’s average credit score?

I can’t give you our average score, but based on our rate sheet we’re a lender that does FICO scores at 580-plus. We are not subprime or deep subprime; it depends how you draw that line. We try to provide a lending solution for dealers that is complete, including prime, near-prime or nonprime. We are not known for subprime or deep subprime. At around 580 to 640, for us to do it, the structure of the deal needs to be very solid -- the age of the vehicle, the number of miles, the loan-to-value.

Gateway is not what I would have called a household word in auto loans; how big is the company?

We have been growing pretty significantly. We are the 28th largest lender in the U.S., based on Experian AutoCount data. We are the 12th largest independent lender to independent dealers in the country. We are continuing to grow, to gain efficiencies.


What’s the mix of dealers?

Our strategy is really to sign up any dealer that qualifies from our minimum qualifications. We’re roughly 50-50, franchised vs. independent.

Pretty much every lender says it differentiates itself on service as opposed to price. Does that include Gateway, too?

A big thing we do is we view ourselves as “high-tech, high-touch,” as opposed to “high-tech, low-touch.” What I mean by that is our relationship to the dealer is really our differentiator. What we do is we have dedicated credit and salespeople directly to a dealer to build and enhance that relationship with that dealer. Those people are constant and consistent in dealing the dealer.

Other lenders leverage “black boxes” of technology. You have salespeople in the state and a pool of credit officers that work with exceptions. Maybe only your credit manager is engaging at the dealer level. Dealers rank us high in the area of representatives and customer service because of that team orientation. From day one, it’s that same person you’re dealing with. That’s a big thing.

You can reach Jim Henry at autonews@crain.com

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