3% of the Market = $320M 3rd Quarter Subprime Loans

Lenders, where do you get solid, accurate information about your industry? Workshops conducted by lawyers, who want you to put them on retainer? Talking to your buddies over scotch after the Conference workshops conclude. Oh, I know. You seek the counsel of vendors who have never loaned a nickel of their own money but are willing to share what they perceive to be the “secret” metrics, techniques, and strategies for lending YOUR hard-earned dollars to the Masses by paying for THEIR 3rd-party solutions!

So you ask, what’s different about YOU, Jer? Don’t you have your hand in my pocket as well? Jer, have you ever loaned a nickel of YOUR money via the Internet to some down-and-out consumer who lacks the funds to keep on the lights? Pay for a kid’s prescription? Fix a broken-down car needed to keep a job?

My response? YES, YES, and YES! I opened my first payday loan store in Garden Grove, California in late 1997. Day-by-day I worked and sweated to build 15 locations. [If you’re reading this and want to hear about loaning money to phone sex call workers, reach out. There happened to be a call center in my payday loan store building.] Then, I discovered the Internet! Then, the SMARTPHONE! Today, crypto, the lightning network, Defi… all are destined to upend the business of lending to the masses. [But, that’s another conversation.] The rest… is history. Equity in multiple stores, equity in both state-licensed and Native American Tribal [Federally recognized, sovereign Nation] portfolios, consulting gigs with VC’s, hedge funds, tribes, mom & pops, private investors, family offices, seed round participation in infrastructure platforms focused on “lending to the masses,” Board and Advisory positions, Fintech startups… I live and breathe this industry! It’s the “juice” that drives me. [I’m no golfer! Retirees RUST!]

My Point? Tap into relationships with those who have “walked the walk!” Enova fits this mantra! So, read and learn.

Background: Enova International[ENVA] is a publicly-traded company in “The Business of Lending to the Masses.” Translated, that’s SUBPRIME LENDING! Founded by @AlGoldstein in 2004 as @CashNetUSA [The Check Giant LLC], acquired by CashAmerica in 2006 for $35M in cash, spun off as Enova and taken public in 2014. 16 years in the subprime lending space. Served 7M customers. Originated $27B in loan originations! Focused on the USA & Brazil to a lesser extent.

Fact: There is no large player in the subprime or near subprime space! Fragmented! Meaning? There still remains a SUBSTANTIAL opportunity for de novo entrants and seasoned lenders to achieve significant success in lending $$$ to the Masses!

3rd Quarter performance In a Nutshell

Enova’s stock price has increased 50% over the past 12 months! Chargeoffs dropped down to 4.2%. Loan originations scaled 26% to $856,000,000; six times higher than last year’s 3rd Quarter! This is the second consecutive quarter Enova has produced sequential growth above 25%. They accomplished this during COVID-19! They only have 3% of a VERY FRAGMENTED MARKET!

“Originations from new customers increased to a record 43% of total originations, up from 39% in Q2 of 2021 and well above 11% in Q3 of 2020.”

Single-payment loan products now make up a mere 2% of Enova’s loan portfolio! [Thus my @JerAyles constant emphasis on offering installment, line-of-credit, car title… loan products when consulting with my clients and portfolio managers! Simply TOO MUCH BAGGAGE attached to “payday loans.”]

Of note on the Enova conference call:

“Yeah. I think you said it right, David. It’s kind of a resounding no. I mean, there is a lot of noise. But I mean, there’s no large player in the subprime credit card space. There are some small options out there, but they’re always have been and it’s mostly kind of high near-prime borrowers, not deep subprime borrowers, and that, obviously, a lot of talk of buy now, pay later. But that’s almost exclusively prime and super-prime. There’s really no big player that’s really done any kind of volume in the subprime or near-prime space where we focus most of our efforts.”

“And I think that’s always been one of the things that have differentiated us instead of supporters are kind of conviction on that subprime and your prep space, where there has been less competition and continues to be less competition.”

For a complete transcription of Enova’s 3rd Quarter earnings report, click the Enova link above. Additionally, there is always interesting analysis about Enova found on SeekingAlpha.com

If you are or want to be, in “the business of lending to the masses,” REACH OUT TO ME: Jer Ayles 702-208-6736 Jer@thebusinessOflending.com

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