The Money Store Inc. is bidding to become a major player in the lucrative sub-prime auto lending business. And analysts say its national branch network and advertising program give it a good chance of success.

The Union, N.J.-based consumer finance company announced last week that it had established a unit in Sacramento, Calif., to buy sales contracts from both franchised and independent auto dealers. Best known for its home equity, SBA, and government-guaranteed student loans, The Money Store originated its first auto receivables last month.

"Although a new business for us, sub-prime auto finance has a number of important similarities to our home equity business," said chief executive Marc Turtletaub. "It is a highly fragmented and growing market where the credit risk is manageable through proper underwriting and servicing."

"Sub-prime" refers to that part of the used car finance business in which borrowers suffer from some degree of impaired credit. Although the market is estimated to generate about $60 billion of receivables a year, no one company is dominant. Mercury Finance Co., the industry's biggest player, accounts for only $1 billion of receivables.

Given that market fragmentation, Montgomery Securities analyst Joseph A. Jolson said The Money Store enjoys an advantage with its network of 157 offices in 40 states.

"They're going to be a tough competitor for the average finance company," he said. "They have a consumer franchise that virtually no one in the auto finance business has."

The Money Store's well-known name also gives it "instant credibility" with auto dealers, Mr. Jolson said.

The Money Store will target the higher end of the sub-prime market, or so-called "B" and "C" paper, he added. While other companies focus on riskier "D"-rated paper, The Money Store looks for customers who are employed but have some kind of blemish on their credit record. Or, they have too much debt-to-income coverage to qualify for an 'A' credit loan," Mr. Jolson said.

The Money Store was founded in 1967 and now has a serviced loan portfolio of more than $5 billion. Its new auto finance division is headed by Tom Jones, formerly a vice president with Westcorp, another sub-prime auto lender. It has 20 employees based in Sacramento, although that number is expected to increase as the business grows.

Mr. Jolson said the company maintains good credit standards, despite its rapid expansion.

"The Money Store is the kind of company that's extremely conservative when they get into a new business. I don't think they'll have a material impact on the competitive landscape in the next year or so," Mr. Jolson said. "Over time, though, I think they'll be a big player in the business."

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