America’s Car-Mart is heading toward a critical liquidity deadline as its temporary forbearance agreement with Silver Point Finance expires June 12, 2026.
Critical Shifts:
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Liquidity deadline approaching: America’s Car-Mart is operating under a forbearance agreement with Silver Point Finance that expires June 12, 2026, as it works to secure new financing and address potential covenant breaches.
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Capital raise or restructuring on the table: The company is reportedly exploring a ~$500M capital raise while also preparing contingency plans that could include a Chapter 11 restructuring if funding efforts fail
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Operational and credit stress intensifying: Weak earnings, rising delinquencies, and ~31% dealership closures signal ongoing pressure on both portfolio performance and liquidity across its BHPH operations.
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The company's temporary temporary forbearance agreement has paused certain lender remedies tied to expected covenant breaches while the company works to secure additional financing and evaluate restructuring options.
The development comes as the buy-here-pay-here (BHPH) retailer continues to face weakening credit performance, store closures, and tighter access to capital markets. Shares of America’s Car-Mart (CRMT) dropped sharply following reports that the company is pursuing new financing to avoid a potential bankruptcy scenario.
Based in Rogers, Arkansas, Car-Mart operates one of the largest BHPH dealership networks in the U.S. and manages a receivables portfolio of roughly $1.5 billion.
Lenders Grant Temporary Relief
Silver Point Finance, acting as administrative and collateral agent for Car-Mart’s lending group, agreed to temporarily waive enforcement of certain default remedies tied to liquidity and collateral coverage covenants.
The forbearance covers key metrics including minimum liquidity levels, borrowing base reporting requirements, and collateral performance thresholds—core measures for asset-backed auto lenders.
The agreement runs through June 12, 2026, giving the company limited time to negotiate longer-term amendments, refinancing, or alternative capital solutions.
Car-Mart has formed a board special committee to evaluate strategic options, including debt restructuring, recapitalization, and new financing arrangements.
Capital Raise Efforts Underway as Bankruptcy Contingency Considered
Reports indicate that investment bank Houlihan Lokey has been marketing a potential capital raise of at least $500 million to support liquidity and stabilize the balance sheet.
At the same time, sources familiar with the situation say the company has begun preparing contingency planning that could include a Chapter 11 filing if financing efforts are unsuccessful. No filing has been announced.
The company previously secured a $300 million term loan from Silver Point Capital in October, used to refinance an asset-backed credit facility. While it extended liquidity, it did not resolve longer-term leverage and credit performance challenges.
Weak Credit Performance Continues to Pressure Results
Car-Mart’s financial stress became more visible following its September 2025 earnings release, which showed deteriorating portfolio performance and rising credit losses.
The company reported a first-quarter loss of $0.69 per share, compared with a $0.15 loss a year earlier. The results reflected weaker sales, higher delinquencies, and increased charge-offs across its loan portfolio.
Shares declined sharply after the release as investors reacted to worsening credit trends and tightening liquidity conditions.
Store Closures Signal Operational Pullback
In response to financial pressure, Car-Mart has significantly reduced its dealership footprint, closing 18 stores initially and later announcing 42 additional closures—about 31% of its network.
Management has described the reductions as a liquidity-preserving measure aimed at concentrating operations in higher-performing markets. The company has also tightened underwriting standards and reduced inventory levels to improve portfolio performance.
For BHPH operators, the move reflects a broader shift toward capital efficiency as funding conditions tighten across subprime auto lending.
Shareholder Scrutiny Emerges
Following the stock decline tied to weaker results, Rosen Law Firm announced an investigation into potential securities claims, focusing on whether the company’s disclosures were materially misleading.
No findings of wrongdoing have been made, and the matter remains in the investigative stage.
Outlook
With the June 12 forbearance expiration , Car-Mart faces a narrow set of outcomes: secure new financing, negotiate a broader lender restructuring, or pursue a court-supervised reorganization.
The company’s next steps will be closely watched across the independent and BHPH dealership space, where rising delinquencies and tighter credit conditions continue to pressure leveraged operators.
