Responding to dealer feedback, Santander expands small business auto financing

Santander Consumer USA Inc. has expanded its small business automotive finance program to all of its roughly 14,000 dealership partners across the U.S., the lender announced Sept. 16. Santander plans to offer automotive financing primarily to small franchises and startups.

The program was previously available at about 3,000 stores where Santander offered captive financing. The Dallas-based lender decided to expand the program because a number of dealerships asked for it, said Betty Jotanovic, president of Santander Consumer's Chrysler capital program and auto relationships.

"We pride ourselves in being an end-to-end, full-spectrum all-things retail and commercial lender," Jotanovic said. The program bridges the gap for the noncaptive dealers Santander does business with, she added.

Thirty-six percent of Santander's existing commercial business consists of returning customers, Jotanovic said. The lender wants to find more of those loyal consumers through small business auto financing.

Small businesses are an underserved market in automotive lending, Jotanovic said. Previously, if a small business could not get financing at a dealership, it would have to go to another dealership or to a bank, making for a complicated and time-consuming process for the company and for the loss of a sale or finance revenue for the dealership.

"Our dealers shared this feedback with us that they really need more options," Jotanovic said. "We view the dealer as our partner, and we want to continue helping them manage their business."

Financing vehicles for small businesses is more nuanced than traditional automotive lending, Jotanovic said. Lenders must look at credit situations differently and companies have different income sources, which makes the process typically a more manual task. When Santander expanded its program, it invested heavily in data and technology to make the process more automated.

The lender wanted the program to be "more efficient" and "convenient" for both the dealer and the small business owner, Jotanovic said, "so that it was not a cumbersome process."

Any business that meets the underwriting, credit and policy requirements is eligible, but the program is aimed at smaller companies with fewer than 10 vehicles in their fleet. The main customers will not be "large rental car companies," Jotanovic said. The program is primarily for "the true small business owner, the backbone of the U.S. economy."