NEW YORK – Online lender E-Loan Inc. Monday said it agreed with eBay Inc. (EBAY) to provide financing for cars and motorcycles bought by the online auctioneer's customers, and E-Loan shares rose as much as 34 percent.
E-Loan (EELN), which is based in Pleasanton, Calif., joined Capital One Auto Finance (search), GE Consumer Finance (search) and HSBC Auto Finance (search) among other lenders that offer financing for vehicles bought on eBay Motors (search), according to eBay Motors' Web site.
Sales on eBay Motors totaled about $11.1 billion in 2004, up 48 percent from a year earlier, San Jose, California-based eBay said last week.
"We believe over time more and more people will go to the Internet to buy cars," said Mark Lefanowicz, chief operating officer of E-Loan, in an interview. "EBay is a significant player, and over time we expect to obtain a good chunk of the financing (on vehicles) that eBay sells."
E-Loan did not disclose financial terms of its agreement with eBay, or how much additional business it expects to gain. The company in the first nine months of 2004 had a net loss of $227,000 on revenue of $99.1 million.
E-Loan said users of eBay Motors may complete their purchases as soon as 24 hours after they apply for E-Loan financing. It said this financing is usually at lower rates than are available at banks or credit unions, and does not require vehicle inspections or appraisals.
The eBay Motors Web site said E-Loan borrowers must be in the continental United States, have annual gross incomes of at least $18,000 per year, and borrow between $2,500 and $100,000. No down payment is needed. Exceptions apply in Arizona and Ohio.
In afternoon trading on the Nasdaq, shares of E-Loan rose 48 cents, or 16.1 percent, to $3.46, after earlier rising to $4.00. Trading volume, which rarely tops 2 million shares in a single day, exceeded 13 million.
Shares of eBay fell $3.64, or 4.2 percent, to $82.41.