Braeger Auto Finance Group, via Vroombank a peer to peer (P2P) platform, has identified challenge and set out to solve it. In 2013, despite many signs of a recovering economy, the growth of auto dealerships nationwide was limited due to the reluctance of banks to fully fund them. Most affected were auto buyers who did not qualify for traditional loans and were seeking non-prime financing through auto dealership finance companies. To this group of buyers, an auto means the difference between a working mother or father’s ability to get to a job, to earn a living to raise a family.
David Braeger, CEO of Braeger Auto Finance Group decided to put to use his background in the financial industry, and knowledge gained from the 90-year-old Midwest-based auto dealership started by his grandfather. Braeger’s business is not related to the Braeger Automotive Group. The auto related business model invites individual investors to choose the term of their investment and earn interest.
“The investor makes the loan and earns the interest,” said Braeger. On average, investors provide their capital for four years and receive quarterly payments amounting to 8% annually. Additional term options are available.
The model is working with $6 million raised in one year and Braeger expects to raise $10 million or more by the end of the year.
Recently, crowdfunding sites have been receiving multi-million dollar investments and Braeger’s site has launched an investment crowdfunding campaign on Fundable.
Sherwood Neiss, co-founder of Crowdfund Capital Advisors, applauds the timing of the Braeger business model.
“It’s incredibly innovative,” said Neiss. “If he (Braeger) can get it right, he will have more business than he can handle because there will be auto dealers coming to him for solutions who wouldn’t find them elsewhere.”
Neiss added that he expects to see more companies like Braeger’s filling the void left by the recent financial crisis.