Cleveland-based banking company National City Corp. is motoring its RV and marine lending business across the country in an effort to triple the unit’s revenue and market share in the next five years.
Until this month, National City focused its RV and boat retail and wholesale finance business in the Midwest and the Southeast. But now it has expanded that business to make loans in 38 states, said Greg Jelinek, National City’s executive vice president of national recreation finance.
The company plans to offer RV and marine financing in 45 states by the end of the year, he added.
“Our plan is to provide retail and floorplan financing on a nationwide basis,” Jelinek said. “Initially, we are only pursuing the larger ($10 million or greater) floorplan opportunities outside our footprint.
“We are in the middle of a project to replace our floorplan loan system, which should be completed by midyear 2004.”
That would allow National City to compete for smaller dealer inventory finance accounts, he said.
National City made slightly more than $1 billion in recreation finance loans in 2003, Jelinek said, noting that the total represents about 3% of the national recreation lending market.
In the next five years, National City plans to grow that business to more than $6 billion, or roughly the size of its automobile lending division, and to snag 10% of the national market currently dominated by Bank of America, Bank of the West and National City’s Cleveland neighbor, KeyBank, Jelinek said.
“We’re the No. 1 lender in the Midwest,” he said. “Our objective is to do the same in all of the other regions. We see that the RV and marine businesses are growing at a tremendous rate, especially on the coasts.”
The typical RV or boat loan is three to four times the size of the average car loan, and it lasts twice as long, so the recreation finance business is highly profitable for lenders, Jelinek said.
The recreation finance division currently has 29 employees, but Jelinek said National City is hiring a still-to-be-determined number of regional managers and direct-sales employees to spearhead lending on the West Coast and in the Northeast and the Southwest.
Jelinek said National City also is targeting its lending efforts at RV and watercraft manufacturers and dealers. In the second quarter of 2003, the bank inked a deal with Gulf Stream Coach Inc. to allow National City to finance customer loans for all the company’s nearly 500 dealers.