IOU Planning for 25%-30% Originations Growth

IOU Financial CEO Phil Marleau spoke confidently this afternoon on a public conference call to discuss the company’s first quarter performance. The company had a net income of $797,198 from the start of the year to March 31, which is notable because it produced a $995,085 loss during the same period last year.

On the call, Marleau said that the company plans to increase loan originations next year by 25 to 30 percent.

An analyst at TD Wealth asked if the company’s plan for a 25 to 30 percent increase in loan originations should produce a similar increase in earnings.

“We’re working on getting our numbers back on a growth trajectory,” Marleau said. [To do this…] we may need to increase marketing spend in order to increase the direct channel and the referral channel.”

Marleau explained that IOU Financial has three channels: the wholesale sales channel, which is responsible for the bulk of its business, the direct channel, which is driven by marketing, and the referral channel, which involves strategic partnerships with associations, payment processors, suppliers to small businesses and others. The company makes business loans of up to $300,000.

“We’re not going to lose sight of the bottom line,” Marleau said. “We’re not going to grow at the expense of profit.”

Another question came in asking what the status was on the company’s strategy of taking aggressive legal action against merchants that default on loans. President and Chief Operations Officer Robert Gloer answered this question by noting that once a lawsuit is filed against a merchant, it generally takes about a year for any money to be recovered. But the company has recovered money from defaults.

“We have started to see recoveries and we see that as a huge success,” Gloer said.

Another question dealt broadly with alternative financing in Canada as opposed to elsewhere, like the US. Marleau said that compared to the US, there is a lot less competition in Canada and that there are higher margins and usually fewer defaults.

IOU Financial is headquartered in Montreal and has an office in Kennesaw, GA.

Todd Stone was a reporter for deBanked.