NEW YORK, NY – January 20, 2011 – (Motor Sports Newswire) – Sparta Commercial Services, Inc. (OTCBB: SRCO) today announced that the Company will now be offering indirect consumer automobile financing to new and used automobile dealers throughout the country.
Through a purchase and sale agreement with a subsidiary of one of the country’s largest independent regional banks, Sparta will offer a non-prime consumer indirect automobile financing program through both new and pre-owned automobile dealers. Under the terms of the agreement, Sparta will generate revenue from the origination and sale of the loans, and will only be responsible for losses due to a customer’s first payment default or non-delivery of title, both of which are the responsibility of the selling dealer pursuant to the terms of Sparta’s dealer agreements. This new Sparta non-prime retail installment sales contract program is specifically designed for consumers whose credit and related criteria may not be sufficient to meet the more stringent requirements of most other lenders. This program will provide an opportunity for dealers to expand their sales and for consumers to obtain the cars they need. Since Sparta has and is providing financial services to the powersports industry, we expect the program to be well received by those automobile dealerships whose owners also own motorcycle dealerships.
This new auto financing program represents an additional area of potential growth for Sparta in the consumer marketplace, which, until now, focused on powersports vehicles. The expansion into this new market will not require significant investment by Sparta as its management group has nearly 50 years of experience in automobile financing, and the Company’s proprietary application processing, credit review, and decisioning platform, iPLUS® Version 2.0, can accommodate the automobile financing product with only minor system enhancements.
Commenting on his company’s expansion into automobile financing, Anthony Havens, Sparta’s CEO, said, “We never realized that our reputation for prudent credit risk evaluation and loan servicing abilities had spread beyond the powersports industry, but we were obviously pleased when approached and presented with this opportunity. The flexibility that has always been a hallmark of Sparta is once again demonstrated by our launching of this new product. Although we began as a powersports targeted company offering consumer financing and leasing, we recognized an opportunity to enter the municipal leasing market and are enjoying increasing success in that expanding sector. More recently, we recognized another unserved niche in the powersports marketplace and launched Cyclechex, the first and only online source exclusively for motorcycle history reports. Now, with the addition of a new, non-prime automobile financing program, we’ve significantly expanded our addressable market. Even though we continue to grow and service the powersports industry, the automobile financing sector is substantially larger, and we fully expect that our presence in this new marketplace will produce positive results for Sparta and our shareholders.”
About Sparta Commercial Services, Inc.:
Sparta Commercial Services, Inc., www.spartacommercial.com, is a New York-based, nationwide financial services company offering financing and leasing products to consumers and retail powersports and automotive dealers. Sparta also serves municipal and governmental agencies nationwide with its Municipal Lease Program, which offers financing for essential equipment for the law enforcement and emergency response communities.
Our subsidiary, Specialty Reports, Inc. d/b/a Cyclechex, is in the business of offering online access to title histories and salvage information for various classes of previously owned assets. Cyclechex’s initial product release is the Cyclechex Motorcycle History Report.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are valid only as of today and we disclaim any obligation to update this information. Actual results may differ significantly from management’s expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks related to potential future losses, obtaining, satisfying terms of, and amount of credit lines, competition, financing and commercial agreements and strategic alliances, seasonality, potential fluctuations in operating results and rate of growth, management of potential growth, system interruption, consumer and industry trends, limited operating history, and government regulation. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. Further information regarding these and other risks is described from time to time in the Company’s filings with the SEC, which are available on its website at: http://www.sec.gov.
SOURCE: Sparta Commercial Services, Inc.