The financial engine behind subprime auto lending, PrimaLend Capital Partners LP, has hit the brakes and filed for Chapter 11 bankruptcy protection, listing more than $100 million in debt and launching a strategy to sell off its assets while continuing to operate under court supervision.

The Plano-based company, which has financed auto dealerships across the U.S. since 2007, filed its petition Wednesday in the U.S. Bankruptcy Court for the Northern District of Texas. According to filings, PrimaLend and its two affiliates — Good Floor Loans LLC and LNCMJ Management LLC — reported between $100 million and $500 million in both assets and liabilities, with up to 1,000 creditors affected.

“Best Path Forward,” Says Company President

In a declaration accompanying the filing, Mark Jensen, president of PrimaLend, said that entering Chapter 11 is “desirable and in the best interests of the debtors, creditors, and all interested parties.” The move, he explained, will allow the company to maximize value through asset sales while maintaining business continuity.

The lender confirmed that it has secured debtor-in-possession financing from its existing creditors to support daily operations and the sales process. PrimaLend assured partners and clients that it intends to continue operating in the ordinary course of business during the restructuring.

Subprime Auto Lender Faces Financial Gridlock

Founded nearly two decades ago, PrimaLend built its name on providing strategic lending and capital solutions to automotive dealerships — fueling expansion and profitability for partners in the often volatile subprime market. However, mounting debt and tightening credit conditions appear to have throttled the company’s financial momentum.

Its filing marks another major tremor in the auto finance industry, which has been rattled by high default rates, rising interest costs, and reduced investor appetite for risky loan portfolios. Analysts suggest PrimaLend’s case could serve as a barometer for subprime lending stability heading into 2026.

The Legal Road Ahead

The company’s restructuring case has been assigned to the Texas bankruptcy court, where it will navigate the Chapter 11 process — balancing creditor demands with the goal of salvaging its operations through a court-approved sale transaction.

PrimaLend’s legal representation is being handled by Jason P. Kathman of Spencer Fane LLP.

A representative for PrimaLend did not immediately respond to requests for comment Wednesday.

As the company steers through bankruptcy, its future remains uncertain — but for now, the engine is still running, fueled by court-approved financing and a hope to reboot its business before the tank runs dry.