Enova CEO: We’re seeing competitors pull back on originations

Enova’s small business loan originations hit $807M in Q3, according to the company’s latest quarterly earnings report. That’s up significantly from Q2’s total of $679M.

Despite the nation’s economic headwinds, the company said that credit quality across their portfolio remained solid and that SMB originations would continue to grow as a percentage of Enova’s overall business thanks to “strong demand and strong unit economics.”

“On the competitive side, we are seeing both consumer and SMB competitors pull back meaningfully on originations as they struggle to manage both credit and their loan portfolios and access to capital, problems that we are not experiencing,” said Enova CEO David Fisher. “Demand has also remained strong for our SMB products. Small business government stimulus has been exhausted, and we believe that we’re seeing additional tailwinds as banks have tightened credit, resulting in high credit quality borrowers who may have otherwise gone to a bank coming to us.”

Fisher attributed Enova’s unique ability to manage the economic circumstances to “deep experience, sophisticated and proven machine-learning-driven analytics, diversified product offerings, strong balance sheet and [a] world class team.”

Notably, Enova has also been emphasizing its shorter-term products and paying attention to segments of the SMB market likely to cause trouble.

“Construction has been a place where we really started backing away from three or four quarters ago, which was a great decision in hindsight,” Fisher said. “Trucking has been a complete mess. That whole industry is just messed up between fuel prices and supply chain issues, both affecting ability to repair your trucks and also keeping trucks full. I mean, that industry is just a complete mess. So we backed away from trucking very early this year as well.”