Financial Technology Startup Offers Short-Term Service Lane Loans

A new poll by financial technology company Sunbit shows only half of service lane recommendations at dealerships are fully executed, but when dealers offer financing that number goes to 70%.

Sunbit, a startup founded in 2015, aims to connect those two dots. Its mobile platform allows dealership service lane customers to apply for loans with maturities ranging from three to 18 months, with approval nearly instantaneous. Currently, more than 6,000 dealerships offer Sunbit in their service lanes, and 97% are franchised dealers, Sunbit co-founder and chief revenue officer Tal Riesenfeld tells Wards. “We are for that moment when you get hit by that unexpected $1,000 expense,” he says.

If a customer wants to take out a loan through Sunbit, the service lane associate asks for a driver’s license and scans it. Sunbit performs a soft credit check; no personal questions are asked.

The process takes 30 seconds and 90% of loan applications are approved. The loan originator is Utah’s Transportation Alliance Bank, which determines loan qualifications and terms of credit.

Three-month loans are interest free for dealerships offering that program. Longer maturity loans carry up to a 35.99% APR. The average loan is $1,000 over 12 months.

The money is withdrawn each month automatically from the borrower’s bank account. Sunbit receives between 3% and 5% of the loan as a fee based on the program the dealership selects and any 0% offer the customer gets. “We make most of our money from the dealership,” says Riesenfeld.

The loan is unsecured. But recipients usually associate the loan with the dealership and Sunbit bets customers feel a connection with the dealership and are therefore likely to pay back the loan.

Sunbit has partnerships with 14 manufacturers, Riesenfeld adds.

For a dealership to offer Sunbit products, its service advisors undergo an online certification process that includes an “intense legal section which has a strict 100% passing criteria,” according to Sunbit.

Those who pass are known as “Sunbeasts.” They can compete through a gamified rewards system that allocates points every time an advisor signs up a customer. Attending workshops, answering surveys, providing feedback and watching training videos also earn rewards. The company ranks "Sunbeasts" against each other.

The rewards include items such as Starbucks cards, says Riesenfeld. “It’s more about the social engagement,” he says.

Soon dealers can access other services through the company. It recently launched an F&I product offering financing for warranties. “We are moving deeper into the extended warranty world,” says Riesenfeld.

Sunbit executives are also working on integrating its product into dealership management systems such as cloud-based Tekion so the loan offer is automatically part of the dealership process. “It will be on the invoice,” says Riesenfeld. That will be a crucial way of getting it in front of the customer, he says.