Repo Agencies: Keep an Eye on Your America’s Car Mart Receivables

America’s Car-Mart, one of the larger buy-here-pay-here auto retailers and subprime auto finance companies in the country, is currently operating under lender covenant relief as it works to address significant liquidity and financing problems.

According to the company’s recent filings, its lenders have provided temporary relief from certain financial covenant requirements. That relief is currently scheduled to expire September 7, 2026, although provisions allow for potential extensions under certain conditions.

That doesn’t mean America’s Car-Mart is going bankrupt on September 8—or that repo agencies should panic. But given what the recovery industry experienced during the collapse of Tricolor, it is a date worth watching.

A lender’s financial problems can quickly become a recovery agency’s financial problems when there are significant outstanding invoices.

When a client experiences financial distress, those outstanding invoices can suddenly become much more difficult to collect.

Car-Mart’s situation is particularly noteworthy because the company has acknowledged substantial doubt regarding its ability to continue as a going concern and is pursuing financing and other strategic alternatives. Its portfolio also continues to experience significant credit losses.

Again, this is not an indication that Car-Mart is about to fail. The company remains an operating business and is actively working with its lenders to address its financial position.

But the lesson from Tricolor is still fresh: having a large loan portfolio and a lot of collateral does not necessarily mean a company has the liquidity to pay its vendors.

The repossession industry learned an expensive lesson from Tricolor. Nobody wants to learn it twice.

September 7 is approaching. Keep an eye on the date—and keep an eye on your receivables.