Car-Mart expands borrowing capacity by $274 million

Rogers-based America’s Car-Mart has extended the term of its revolving credit facilities to Sept. 29, 2024, and increased total permitted borrowings to $600 million, an increase of $274 million, according to a Thursday (Sept. 30) news release.

The buy here, pay here used car dealer has entered into Amendment No. 3 to the Third Amended and Restated Loan and Security Agreement that shows total permitted borrowings will rise by 84% from $326 million. According to the new agreement, CIBC Bank USA and Axos Bank have joined the lending group as two new lenders.

The group also includes BMO Harris Bank N.A. with an $88 million commitment, up from $71 million; Wells Fargo Bank N.A. with an $84 million commitment, up from $50 million; BOKF NA doing business as BOK Financial with a $55 million commitment, up from $50 million; MUFG Union Bank N.A. with an $84 million commitment, up from $50 million; First Horizon Bank with a $75 million commitment, up from $50 million; Arvest Bank with a $40 million commitment, up from $30 million; and Commerce Bank with a $40 million commitment, up from $25 million. Commitments from CIBC Bank USA and Axos Bank are $50 million and $84 million, respectively.

“As we continue to grow, serving more customers at the highest levels, our strong lending group is partnering with us as we allocate capital for our consistent, disciplined growth approach,” said Jeff Williams, president and CEO of Car-Mart. “The consumer demand for our unique offering is strong, and the investments we are making in the business are putting us in a position to continue to excel into the future.”

The new agreement also amends the distribution limits to renew the aggregate limit on the company’s stock repurchases, increases the company’s permissible capital expenditures by $10 million to $35 million during any fiscal year, restores the accordion feature back to $100 million, and adds certain mechanics for the replacement of LIBOR as the applicable benchmark interest rate under the agreement.

“We are very excited by the participation and commitment of our lending group and happy to be adding two new lenders,” said Vickie Judy, chief financial officer of Car-Mart. “This increase is fundamental in our strategy to transition from a collections company to a sales company very good at collections. The increased facility will allow us to continue to grow our customer base, and to continue making key investments to better serve our customers both digitally and in-person as well as provide for additional funding for acquisition opportunities. The expanded facility will allow us to support our commitment and promise to provide customers with excellent service, care and compassion before, during and after the vehicle sale and keep them on the road with peace of mind.”

The agreement was previously amended on Feb. 10 and Oct. 29, according to a Wednesday (Sept. 29) filing from the U.S. Securities and Exchange Commission. As of July 31, the company had about $53 million in additional availability under the agreement.

Shares of Car-Mart (NASDAQ: CRMT) closed Thursday at $116.78, down $6.62 or 5.36%. In the past 52 weeks, the stock has ranged between $177.45 and $82.72.