Start-Up Firm Specializes in Financing F&I Add-Ons

Justin Lane took a problem he witnessed as a dealership manager and turned it into a new business to try to help dealers sell more F&I products.

His clients are dealers but his audience is consumers for whom banks have declined to fund aftermarket products or who’ve paid cash for their vehicle but then lack additional money to buy tire-and-wheel insurance, service agreements and other F&I products to protect their new investment.

His firm, Line 5, finances any product sold in the F&I office, Lane says.

Line 5 refers to the line on the contract for the total amount financed.  A line 5 call is when the bank offers the dealer a conditional approval, which usually limits the financing of back-end products.

“This is a very common problem, and why my partners and I came up with this idea, from experience,” Lane says.

His Naples, FL-based business took on its first customers in October and now provides services to 50 dealers, most of them franchised and in the Miami and Tampa markets. Dealer clientele average 30 to 40 contracts a month with the company.

Finance terms are tied to those of the products being sold. Dealers can opt to extend financing for up to 84 months. The service is free to dealers to sign up for and have at hand, when needed. Line 5 charges the dealer a 10% fee on each transaction.

Lane says it gives dealers the ability to sell products to customers who would otherwise need to pay cash or use credit cards.

“We help dealers keep the F&I business that the usual financing channels decline to fund,” he says.