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Turner Acceptance Corp. June 07 Businessexcellence 71 The business of Turner Acceptance Corp. is inherently risky. The company lends money to people whose credit histories are sparse or show signs they have had trouble making regular payments to their creditors in the past. The company deals in the non-prime and sub-prime loan spaces, making auto and personal loans to individuals who are considered too risky to receive loans from banks or other traditional lending sources. For more than 30 years, Chicago-based Turner has managed to navigate that risk to become one of the larger and more successful underwriters of less than prime loans in the state of Illinois. Chief executive officer Jonathon Levin says the firm, founded in 1973, mitigates the risk it faces by focusing its energy on knowing its customers and delivering high touch customer service. Whether a customer comes to Turner for a personal loan or is filling out applications at a used car dealer or one of the company’s other merchant partners, Turner trains its employees and partners to look beyond the credit history reports to determine a consumer’s credit-worthiness. “Those pieces of paper tell part of the story but when you are talking to the person or they are right in front of you, you have an opportunity to really learn about them, to find out what caused them to fall behind in the past,” Levin says. “It’s when you learn if you have a paying customer here going forward, regardless of what the formal credit history says.” That same philosophy extends to Turner’s Turner Acceptance Corp. provides modest-sized automobile and personal loans to people with blemished or unproven credit records. Keith Regan learns from CEO Jonathon Levin how it uses a careful, human touch to build long-term relationships with customers Lending support

Businessexcellence July 07 72 that person needs a loan, when they’re in better shape, they might think of us before they go to the bank and that’s really something.” Turner’s average loan size is around $5,500 in the auto division and $2,000 on the personal loan side of the business. Most loans are for terms of 24 months for cars and 16 months for personal loans. “We try to turn the loans over quickly so they aren’t bogged down making payments on interest for a long time,” says Levin. To date, Turner has operated only in the state of Illinois, but will be expanding outside the state and is finishing up an automated decisionmaking tool that will help improve the efficiency of application processing. One of the biggest business challenges Turner faces is the economy itself. Even slight shifts—such as increases in the price of gas and food—can dramatically impact the financial situations of its customers, resulting in fewer loan applications and more missed payments. Other seemingly unrelated issues, such as the move toward vigorous reform of US immigration policy can impact business, since many of Turner’s customers are non-natives. Another challenge Turner faces every day is regulation. Because the sub-prime loan industry has its share of bad apples who take advantage of customers with predatory practices such as lessthan- full disclosure of loan terms and collection tactics built on fear and harassment, consumer groups and other third parties can often be found lobbying regulators and lawmakers to tighten the regulatory oversight of the industry. Levin says Turner counters those efforts by staying actively involved in its own industry associations, such as the Independent Finance Association of Illinois, where he serves as second vice president. That group and the national American Financial Services Association, where he is actively involved as a section board member, help ensure regulators consider the good that sub-prime lenders can do, giving those who can least afford it access to capital to buy a car to commute to work, to fix a broken furnace in the wintertime or buy school supplies for their children. Additionally, the basic business model of respecting its customers and doing everything it can to work with them towards solutions has kept Turner ahead of much of its competition. Technology is also impacting the business in approach when it comes to keeping borrowers who have fallen behind from being sent to a more aggressive collection process. Many of Turner’s 70 employees spend the bulk of their time working directly with customers. “Our collection unit works hard on treating customers with respect and educating them about paying on time and why that’s so important,” says Levin. “Consumer education is a big part of being a successful collector. A customer that goes into late stage collections is usually a lost customer. We want to maintain relationships with our customers. If we can find a way to meet them halfway and keep them paying, we might make a customer for life. If they have a payment of $300 but can afford to pay $150, we’ll accept that and help them get back on track. We’ll be stern, but accept it and look to move forward. Next time