BHPH sale structure guide
Direct answer
A full sale transfers the defined existing book, a partial sale transfers only selected existing accounts, and a forward-flow agreement sets rules for recurring future sales of eligible receivables. These structures solve different problems. Compare which accounts transfer, how often pricing resets, who services, what recourse remains, and what happens when an account fails an eligibility test.
Side-by-side comparison
| Structure | Best suited to | Dealer keeps | Main diligence focus |
|---|---|---|---|
| Full existing portfolio | Exit, major liquidity event, servicing transition, risk reduction | Only excluded assets and negotiated rights | Complete reconciliation, documents, servicing cutoff, customer transition |
| Partial pool or selected accounts | Inventory capital, risk management, testing a buyer, retaining part of the book | All accounts outside the closing schedule | Selection method, separation of sold and retained accounts, allocation of payments |
| Forward flow | Recurring liquidity for future eligible originations | Accounts that fail or fall outside agreed eligibility rules | Eligibility, cadence, pricing resets, performance tests, termination and data delivery |
Full portfolio sale
A full sale is usually defined by a cutoff-date schedule rather than a vague phrase such as “everything on the books.” The schedule should state which receivables transfer, balances as of the cutoff, excluded accounts, unapplied cash, recent payments, repossessions, bankruptcies, insurance claims, and other exceptions.
This structure can remove servicing work and produce a larger one-time amount of capital. It also demands the cleanest handoff because customers, payments, titles, records, and reporting must move without losing account history.
Partial pool or selected-account sale
A partial sale lets the dealer choose a subset by objective criteria: seasoned accounts, a target aggregate balance, a particular vintage, current accounts, or another agreed pool. CAR Financial's published program states that the dealer decides which customers to place in the portfolio and that it can provide a proposal for all or part of the receivables.
The operational risk is accidental overlap. The final closing schedule must distinguish sold accounts from retained accounts. Payment files, DMS status, bank deposits, ACH instructions, customer communications, and title records should all use the same schedule and cutoff.
Forward flow
A forward-flow agreement is a recurring commitment or option to sell future receivables that meet negotiated eligibility rules. Public receivables agreements filed with the SEC show common concepts such as periodic purchases, adjustable pricing, performance thresholds, holdbacks, representations, and termination rights. A BHPH agreement may be much smaller and simpler, but the same questions matter.
- Which future contracts are eligible, and when are they tested?
- Is every eligible account required to be offered or purchased?
- How and when does price reset?
- Who absorbs early default, fraud, missing-document, or title risk?
- What data and documents are delivered with each batch?
- Can either party pause or terminate after performance changes?
Choose the structure from the dealer's objective
| Dealer objective | Structure to explore first | Reason |
|---|---|---|
| Leave BHPH or sell the dealership's finance book | Full portfolio sale | Creates one defined exit and servicing transition |
| Buy inventory without selling the whole book | Partial pool | Targets a cash amount while retaining chosen accounts |
| Test the process and buyer | Selected-account sale | Limits operational change during the first transaction |
| Create repeatable liquidity from future production | Forward flow | Defines recurring eligibility, delivery, and pricing rules |
Terms to compare before accepting any structure
Compare the legal buyer, purchase price definition, recourse, reserves, holdbacks, servicing transfer, customer communication, data access, confidentiality, representations and warranties, cure and repurchase rights, closing conditions, and the treatment of payments received around the cutoff. The OCC identifies transfer documentation, servicing, defaults, collections, and recourse arrangements as important elements of loan-purchase risk management.
Frequently asked questions
Do I have to sell my entire BHPH portfolio?
No. CAR Financial's published program says dealers can request a proposal for all or part of their receivables and decide which customers to place in the proposed portfolio.
Is a forward flow the same as a line of credit?
No. A forward flow governs recurring sales of eligible receivables. A line of credit is financing secured by assets and creates repayment obligations rather than selling the receivables outright.
Can pricing change in a forward-flow program?
It can. The agreement should state the pricing formula, reset dates, performance tests, and termination rights. Do not assume the first batch price applies forever.
Sources and related resources
- CAR Financial Services Account Bulk Purchase Program
- SEC filing describing back-book, add-on, and forward-flow receivables
- OCC Bulletin 2020-81: Risk Management of Loan Purchase Activities
This guide explains a commercial review process and is not legal, tax, or accounting advice. Transaction requirements vary by agreement, account, and jurisdiction. Sources and software instructions were checked on September 26, 2026.