SOURCE: Sparta Commercial Services, Inc.

December 30, 2008 09:30 ET

Sparta Commercial Announces New Revolving Credit Facility

NEW YORK, NY--(Marketwire - December 30, 2008) - Sparta Commercial Services, Inc. (OTCBB: SRCO) has announced that its wholly owned subsidiary, Sparta Funding LLC, has entered into a one year, extendable revolving credit agreement with Autobahn Funding Company LLC as lender, and DZ Bank AG Deutsche Zentral-Genossenchaftsbank New York Branch ("DZ Bank") as Administrative Agent and Liquidity Agent. The new credit facility is for the purchase of retail sales and lease contracts secured by new and used powersports vehicles, including motorcycles, select scooters, and all-terrain vehicles (ATVs), and a portion of this facility can also be used to finance municipal and commercial fleet leases. DZ Bank, based in Frankfurt, is the fifth largest bank in Germany, is the central bank for approximately 1,000 cooperative banks and maintains a presence in key financial centers throughout the world.

Sparta Commercial Services is a New York-based, nationwide financial services company dedicated to the powersports industry, offering financing and leasing products to consumers and retail powersports dealers, as well as a variety of commercial products for governmental agencies that require motorcycles and other equipment for law enforcement activities. Sparta's consumer financing and leasing products are offered through a network of over 2,100 dealers throughout the U.S.

Commenting on the new relationship with DZ Bank, Anthony Havens, Sparta's CEO, said, "We are extremely pleased that in the current credit market, DZ Bank decided that our business model, with the performance and management of our portfolio, was worthy of their support and involvement. I also want to express our appreciation to John W. Loofbourrow Associates, Inc., who privately placed the transaction with DZ Bank, to our dedicated staff for all the outstanding work they do, and to our shareholders for their unwavering support."

According to Havens, the new, one year, $25 million committed revolving credit facility, which requires Sparta to meet certain financial covenants prior to initial drawdown, and may be increased subject to portfolio performance, will enable Sparta to expand its dealer network, increase the variety of eligible asset classes in the powersports market, and enlarge its market share in the powersports sector.

Havens then concluded, saying "The new credit facility with DZ Bank shows that even at a time when other lenders are scaling back, a financial services company like Sparta, with a highly focused and effective business model, can generate the kind of institutional confidence and support that this transaction demonstrates."

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are valid only as of today and we disclaim any obligation to update this information. Actual results may differ significantly from management's expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks related to potential future losses, obtaining, satisfying terms of, and amount of credit lines, competition, financing and commercial agreements and strategic alliances, seasonality, potential fluctuations in operating results and rate of growth, management of potential growth, system interruption, consumer and industry trends, limited operating history, and government regulation. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.

Contact Information

  • Contact:

    Dick Trotter
    COO
    Sparta Commercial Services, Inc.
    (212) 239-2666