Articles by deBanked Staff
IOU Originated Whopping $74.2M in Q3
November 21, 2022
IOU Financial experienced a strong third quarter, reporting total loan originations of $74.2M, a 25.8% increase over Q2. The year-to-date total now stands at $192.7M.
“IOU Financial continues to grow revenues and invest in scalability while reducing its adjusted operating expense ratio,” said Robert Gloer, President and CEO, in an official announcement. “We remain laser focused on scalability and growth while maintaining consistent underwriting standards, and we expect to build on this trend in the months and quarters to come.”
IOU attributes the growth to “healthy demand from borrowers” and “continued demand from investors seeking high quality loans.”
Notably, the company said that collections had been in line with expectations and it had “not seen significant increases in delinquencies, defaults or loan modifications.”
The Canadian Lenders Summit is Back
November 15, 2022
deBanked will be attending the Canadian Lenders Summit on Wednesday in Toronto. It is the first major in-person event produced by the Canadian Lenders Association (CLA) since covid. The last event in 2019, also attended by deBanked, was a hit.
More than 500 people are registered for this one.
The chairman of the CLA is Neil Wechsler, CEO of OnDeck Canada.
Garcia Expected to Agree To Consent to SEC Judgment in MJ Capital Case
November 15, 2022Former MJ Capital Funding CEO Johanna Garcia is expected to consent to judgment with the SEC without admitting or denying the claims, according to documents filed in the SEC case. As part of that she will have to disgorge ill-gotten gains, pay prejudgment interest thereon, and incur a civil penalty. The total amount is to be determined.
At last tally, the Receiver said it had received more than 10,000 claims and is busy verifying all of them. MJ Capital raised nearly $200M from investors.
Don’t Forget About Utah’s Disclosure Law
November 14, 2022
While a new era of business moves forward in Virginia and the clock ticks down to compliance with the new complicated disclosure law in California on December 9th, it can be easy to miss state #3 in all of this, Utah.
Utah’s commercial financing disclosure law goes into effect on January 1, 2023. It’s more than just a form. Covered parties must apply for a commercial financing license. A checklist for that can be found here. Similar to other states, the commission paid to a broker must be disclosed but there is no APR requirement.
Square Funds $1.14B in Q3
November 5, 2022
Square Loans, a subsidiary of Block, originated 126,000 loans for a total of $1.14B in Q3. The company has a positive outlook on the state of its lending business, saying that “Square Loans achieved strong revenue and gross profit growth during the third quarter of 2022.” Overall, originations grew by more than 10% over the previous quarter.
Square Loans is one of several lenders thriving during this period of economic uncertainty. Rivals Enova and Shopify Capital also recently reported strong business loan results.
deBanked CONNECT MIAMI is BACK
October 31, 2022deBanked returns to Miami Beach this coming January 19th! Connect all over again at the Miami Beach Convention Center for one of the best experiences in the alternative finance industry.
Enova CEO: We’re seeing competitors pull back on originations
October 28, 2022
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.”
Shopify Funds $507.6M in Q3, Expands MCAs and Loans to Australia
October 27, 2022Shopify Capital originated $507.6M in merchant cash advances and loans in Q3, up from $416.4M in Q2. The increase was assisted in part by the company’s expansion into Australia, bringing the total countries that Shopify funds in to four (US, UK, Canada, AUS).
Shopify is the largest e-commerce platform after Amazon but the two companies are in the same ballpark when it comes to lending originations, and Shopify is potentially doing more.
Shopify generated total revenue of $1.4B in Q3.
“In Q3, we delivered another solid quarter of GMV, revenue, and gross profit dollar growth against the high inflationary environment,” said Amy Shapero, Shopify’s CFO. “From an operational perspective, we recalibrated our organizational structure, successfully rolled out a new compensation framework, and began integrating Deliverr into Shopify. Looking ahead, the flexibility of our platform, breadth of solutions, pace of innovation, and disciplined investment approach position Shopify well to realize the enormous opportunity ahead.”
