Credit Acceptance Corporation extended its $100 million asset‑backed, non‑recourse secured financing, originally entered into on January 29, 2021. The extension pushes the revolving period from February 17, 2026 to January 18, 2028, giving the company an additional 23 months of access to the capital structure.
The company also reduced the borrowing cost on the facility, cutting the interest rate from SOFR + 220 basis points to SOFR + 140 basis points. The 80‑basis‑point reduction translates into an estimated $800,000 per year in interest savings, or roughly $1.6 million over the two‑year period, improving cash‑flow flexibility during a time of heavy technology investment and margin defense.
Credit Acceptance has historically carried a relatively high leverage profile. By extending the term and lowering the cost of debt, the company secures a more stable funding base, reducing exposure to refinancing risk and providing the liquidity needed to continue investing in its loan‑origination platform and dealer network—key levers in a tightening subprime auto‑finance market.
Recent earnings data illustrate the context for the financing move. In Q3 2025 the company reported earnings per share of $10.28, beating expectations of $9.87, while revenue of $582.4 million fell short of the $593.77 million forecast. The Q4 2024 results were stronger, with EPS of $10.17 versus an expected $7.93 and revenue of $565.9 million versus $522.6 million. Q1 2025 saw an EPS of $9.35 against an expected $9.66, with revenue of $571.1 million slightly above expectations. These mixed results highlight the company’s ongoing focus on cost discipline amid competitive pricing pressures.
Management has emphasized that the financing extension supports its long‑term strategy of balancing capital deployment with a robust funding base. CEO Ken Booth, who announced his retirement in Q3 2025, has overseen a period of disciplined growth, and the new terms reinforce the company’s commitment to maintaining liquidity while pursuing technology and network expansion.
The subprime auto‑finance market remains sensitive to macro‑economic shifts, including rising rates and consumer credit tightening. By securing lower‑cost, longer‑term debt, Credit Acceptance positions itself to weather potential headwinds and sustain its dealer‑partner ecosystem, which is critical for maintaining market share in a competitive landscape.
Overall, the extension and rate reduction provide Credit Acceptance with a stronger financial footing, enabling continued investment in growth initiatives while mitigating interest‑expense risk in an uncertain market environment.
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