SAN DIEGO, Feb. 2, 2009 (GLOBE NEWSWIRE) -- San West, Inc. is excited to announce that it has begun negotiations to enter into a joint venture with a Southern California-based regional auto-title loan provider.
Under the terms of the proposed agreement, which has been tentatively agreed upon by both parties, San West would issue auto-title loans to consumers at its "Buggy World" stores located in Santee and San Marcos, CA. The proposal also dictates that San West retain 30% of each repaid loan issued at one of its brick & mortar locations and implement its partner's proven loan strategy, which has historically facilitated an annual bad loan rate of less than 1%.
After conducting a robust and thorough due diligence analysis of the potential benefits associated with the business alliance, both companies strongly concur that partnership represents a compelling and mutually beneficial growth opportunity.
San West's Buggy World stores logged more than $1.685 million in unaudited consolidated revenues during 2008. The company's management team firmly believes that diversification into the non-bank financial services sector - which national trade association Financial Service Centers of America ("FiSCA) estimates generates approximately $106 billion in sales annually - has the distinct potential to facilitate significant improvements to the company's financial position.
The current state of the U.S. credit market is driving increased consumer demand for non-traditional credit products and creating a favorable environment for providers of auto-title loans. Consumers are now finding it harder than ever before to access capital in emergency situations and being forced to leverage key assets including houses and automobiles in debt instruments that typically carry much higher interests rates than bank loans and credit cards.
Historically, sub-prime borrowers and the unemployed have been the most frequent recipients of auto title loans. However, due to the ongoing global recession and virtually frozen credit markets, consumers from all walks of life are now seeking out non-traditional loans in times of need. By implementing a proven loan strategy designed to minimize default risk and maximize net profit per loan, San West aspires to capitalize on this trend.
Commenting on the potential strategic alliance, San West CEO Frank Drechsler stated:
"After evaluating a vast array of business opportunities that hold the potential to improve the depth and breadth of the San West offering and bolster our financial position, partnership within the auto-title loan marketplace has been identified as the most promising venture on the table today. With more than 40% of Americans now living paycheck to paycheck and consumer credit falling at a record rate, a massive need exists for non-traditional credit facilities including auto-title loans.
To optimally capitalize on the growing opportunity for non-traditional loans, our potential partner has developed and successfully deployed a bulletproof auto-title loan strategy. Due to the massive potential of non-bank financial services sector and our potential partner's proven ability to executive high profit auto-title loans with default rates far lower than those associated with credit cards and residential property, I am extremely compelled to push forward with negotiations. This is indeed a very exciting time for San West Inc., and I look forward to updating investors on our progress in that regard as developments arise."
About Buggy World
Buggy World is the exclusive authorized sales, service and parts distributor for the San Diego County with a factory trained staff that can answer all product and service questions. Privately held by Mr. Jim Jordan, Buggy World's mission is to bring innovative products and services to the off-road industry and deliver those products through a dedicated retail and Internet network. Mr. Jordan has spent his whole life 'off-roading' and racing everything from three wheelers, bikes, buggies and trucks. Cambio Enterprises, the parent company, has been in business in San Diego for over 20 years and has dealt exclusively with off-road vehicles.
Buggy World currently has two retail locations in San Diego County California as well as a growing Internet presence. For further information about Buggy World and its products please visit www.buggyworld.net and http://stores.ebay.com/BuggyWorld-8770.
About San West, Inc.
San West Inc. finds its niche in the off-road arena improving designs of buggy manufactures and, selling these products and services as well as repairing of these off-road buggies and additionally providing after market performance products and accessories for buggies. Our products are sold both at our Online store and through our growing dealer network, while our buggy repair services are sold and repaired at our store.
For further information about San West, Inc. you may visit www.sanwestinc.com.
Forward-Looking Statements
This release contains forward-looking statements, including, without limitation, statements concerning our business and possible or assumed future results of operations. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including: our ability to continue as a going concern, adverse economic changes affecting markets we serve; competition in our markets and industry segments; our timing and the profitability of entering new markets; greater than expected costs, customer acceptance of our products or difficulties related to our integration of the businesses we may acquire; and other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.