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Capital for small independent auto broker

What's the best place and/or way to find capital for a small auto broker with no business credit and bad personal credit history ?

I'd prefer to do business with an individual or small investor's group for a personal relationship. I'd like to start out smallish with $5000 to $20,000. I believe I can provide monthly ROI of around 10%. In other words, $500 on $5000.

I have no collatoral other than the auto inventory which is the purpose of the funds. I am currently operating with my own limited funds buying and selling 2 cars per month. Because of the small funds only buy cars less than $1250 and make an average of $800 per car. Obviously I need more capital to increase the revenue.

Any ideas or is this an impossible dream?

Mark Heatherly

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Answers (3)
No User Photo

If you're collecting monthly payments for a pool of vehicles you finfanced, you can sell those payments for a lump sum of cash to get the required capital you need. Call me at 706-288-7271 to see what we can come up with. --Arthur Pain

Mar 28, 2011
Mark Heatherly
Home Improvement Specialties
Alachua County, FL

Thanks for you response and interest. I would be glad to answer your question.

I have been a home roofing and construction for over 25 years and still do this but because the market is horrible I sought other means of income.

I have always liked and utilized different strategies for guying and selling my own personal and business vehicles in the past to maximize usage while minimizing costs. My main focus was to search for the best deal on a vehicle, use it for a year or less and resale it for as close to my purchase price as possible so that the car would in effect have cost me nothing except for fuel, insurance, plate and maintenance. If I bought right, I would also incur no repair costs.

Anyway this was the extent of my prior auto business experience until I came across a dealer who invited me to become an auto broker. He specializes in having multiple brokers instead of having the traditional car lot with multiple salesmen so that he has a system for everyone to follow. He also has some valuable resources available to me such as his own repair shop for evaluating vehicles and performing what ever repairs and improvements I may wish at a greatly reduced rate. I can even get a cheap paint job for $175 on most cars. The dealer also handles all the paper work including vehicle tag, title and taxes.

Because of the low volume, I currently do all the evaluating, fixing and detailing myself with the exception of bigger repairs which I then farm out. On some occasions I have simply sold cars that need a lot of work as “as is fixers” to individuals on a budget who can do it themselves.

My current business model is to buy cars from $400 to a maximum of $2000 that need little to nothing where the titles are either in hand or can be had within a week so that I can turn them quickly. Most of these cars are very neglected cosmetically so that after I do about 8 hours of thorough detailing they look great. Detailing can work wonders on many of these cars.

At some point I’d like to have the services of a good mechanic to take along to the auctions to assist me with pre-evaluation prior to auction.

Having been in the contracting business for 25 years I learned that it is critical to explore the best possible ways to exploit the market according to consumer demand, the amount and type of competition, and all pertinent resources available to me. This means constantly customizing and refining my business model to best utilize my available resources to maximize my returns. This entails but it not limited to exploiting a niche market. For example, most dealers go after Japanese cars because public perception makes them popular with consumers so that they are good sellers. However, because so many dealers do this, the law of supply and demand causes them to go for a premium price at auction. This means that cars in my budget range generally go for nearly twice what a comparable American or European made car would go for so that I stay away from Japanese cars altogether.

Always being short on financial resources has made me very resourceful and shrewd in every other aspect of doing business so that I never become stagnant but always adapting, refining and seeking out other and better solutions. Right now, I live in an apartment and have a storage unit to store all my tools and equipment and only buy 1 or 2 cars at a time keeping them at the apartment whereas when I am able to start purchasing more cars I will seek out either renting a house with shop space and car storage space or a joint venture with someone else who currently has extra shop and storage space available that could lease it out. I already know 2 contractors who might be interested in doing this.

I could go on and on but I will stop here and see if you have any more specific questions which I would be glad to answer. I would also add that having moved to Florida within the past year, I am currently working on getting my roofing license and then possibly adding a general contracting license so that there is the possibility that we could do some business there as well. I already have a national source that would give me about 4 to 10 roofs per month in any region of Florida to my choosing once I obtain the license, insurance and etc. This has enormous potential and is very easy stuff for me since I have personally installed over 4,000 roofs and have managed as many as 10 crews at a time during storm seasons. Speaking of which, with a state certified roofing license in place before the next hurricane along with sufficient financial backing I could earn a million dollars or more off of one good storm !

Thanks again,
Mark Heatherly

Mar 11, 2011
No User Photo

I'd like to hear more about your business.

respond to
Linwood Jones

Mar 10, 2011