Glossary
To understand our terminology, the following glossary will be of help

ADVANCE

• The amount paid to you in cash when the contract is purchased by Western Funding Inc.

FINANCE CHARGE

• The amount added to the contract for financing the purchase.

GROSS OUTSTANDING

• The total balance owed to Western Funding Inc. by all of the contract debtors whose contracts have been purchased from the dealer.

60 AND 90 DAY DELINQUENTS

• A 60 day account is any contract that is past due for 61 to 90 days.
  A 90 day account is any contract past due 91 days or more.

RECOURSE

• The guarantee by the dealer that if the customer becomes delinquent on the payments, the dealer will repurchase the contract from Western Funding on the same terms as it was purchased.

FULL RECOURSE

• Our Full Recourse program was created to pay the dealer all of the reserve withheld. The reserve withheld is paid to the dealer in full when the account closes. That puts the dealer in control of his accounts and the reserve. WFI does not invade the dealer reserve index for losses from other accounts. The reserve is specific to that account only.

LIMITED RECOURSE OR PARTIAL RECOURSE

• This recourse is to give Western Funding protection on a defaulted contract in the early months of the contract when buyer's remorse sets in. The standard for WFI is full recourse for the first two months; after that the contract is non-recourse for the balance of the term. Generally, when the dealer gets the vehicle back in the early months, it has not been damaged. The reserve index is adjusted back to the dealer monthly when it exceeds what WFI feels is a safe percentage to the total outstanding; generally 40%.

NON-RECOURSE

• This is for the dealer who wants to sell their contracts and devote their attention to sales. Naturally, when Western Funding buys totally without recourse, we must be more conservative in our buying habits. It is customary that we will take additional loss reserve when buying non-recourse contracts. If this additional loss reserve is not used for losses, it will be paid to the dealer as income.

REPURCHASE RECOURSE

• A type of recourse for automobile dealers to repurchase contracts from Western Funding Inc. if Western Funding Inc. can return the automobile back to the dealer.

RESERVE

• An amount withheld from the unpaid contract to protect Western Funding Inc. from losses. Also know as the Loss Reserve Index.

RESERVE ADJUSTMENT

• The point that Western Funding Inc. feels the loss reserve is sufficient to protect against losses; it is the ratio of reserve to total outstanding at the end of any month; when the reserve exceeds the reserve adjustment percentage agreed upon, the excess will be paid to the dealer, less a percentage holdback of the 60 and 90 day delinquent accounts.