Online used-car dealer Carvana has announced it received a $1 billion increase in loan guarantee commitments from Ally Financial. That brings the total number of customer loans Ally has agreed to purchase up to $3 billion.
In addition, Ally has also boosted financing for Carvana’s inventory acquisition. The lender boosts Carvana’s credit from $950 million to $1.25 billion and has extended the commitment to March 2023.
The agreement comes just days after Carvana announced it expects to hit company records across several metrics in the third quarter, including vehicles sold, total revenue and gross profit per unit.
It also says it expects to nearly break even this quarter, not accounting for interest, taxes, depreciation and amortization. That’s a significant improvement over its EBITDA margin during Q2, at -6.2%.
However, Carvana has not yet made a profit and doesn’t expect to this quarter. The 8-year-old company’s rapid expansion across the U.S. market has saddled it with huge debt: $1.2 billion at the end of the second quarter. During Q2, it reported a net loss of $106 million on revenue of $1.12 billion.
The full statement on Ally’s increased loan-guarantee commitment is here.