The automobile finance industry is the second largest consumer finance market in the United States. Banks and the finance subsidiaries of major automobile manufacturers finance many of these loans, however, independent finance companies finance the majority of them.
LMD Auto Fund, LLC, is a hedge fund that is focused on automobile finance, primarily Indirect Lending. Indirect Lending involves the purchase of loans already in existence; for example, when a consumer goes to a dealership and the dealer “originates” the loan … the dealer is the lender. The dealer then sells the loan to an indirect lender. LMD Auto Fund, LLC invests in this space.
LMD Auto Fund, LLC sell membership interests for $20,000 per unit with a minimum target rate of return of 10% per annum.
For more information on LMD Auto Fund, LLC, including complete detail on the fund and its methods of operation please go to www.fafcapital.com .
Consumer Receivables
Consumer receivables can be purchased on a whole loan basis. Investors can purchase a single loan or a portfolio of loans. The individual investors and sellers set the price of the loans. Loans made to borrowers with good credit with high loan-to-values are generally considered to be low risk. Loans made to borrowers with bad credit with low loan-to-values are generally considered to be high risk. Investors negotiate to buy loans at a price that will give them a desired rate of return. The price can be more or less than the principal amount of the loan - Premium or Discount - similar to pricing a bond instrument.
For more information on purchasing consumer receivables please go to Loan Market Direct.