In Trump’s America, shares of risky lender Enova soar


Since the election of Donald Trump, one Chicago company has imposed itself above all others, at least in the eyes of the stock market. Boeing? Grubhub? AbbVie? No, no and no.

Venture lender Enova International has more than tripled its investor money since Trump’s surprise election transformed the regulatory world high-cost lenders like Enova previously navigated. The Chicago-based company, a pioneer in the now common practice of lending money to consumers over the internet without collateral, suddenly broke free from the review of the Consumer Financial Protection Bureau, created under the Dodd-Frank finance act that Trump and the Republicans in Congress had promised to weaken.

But Washington’s lighter touch isn’t the only – or even the main – reason Enova and other publicly traded online consumer lenders are favoring investors. They benefit from an economy characterized by low unemployment and modest wage growth at best, which has led a growing number of households to turn to high interest lenders when they have depleted sources of money. cheaper in times of stress.

Launched as CashNetUSA in 2004 by Al Goldstein, who went on to become one of Chicago’s best-known serial entrepreneurs, Enova started out as an online payday lender, disrupting an industry that until then had primarily served clients. desperate consumers through physical stores. . Goldstein sold the company in 2006 to Cash America International, a chain of pawn shops based in Fort Worth, Texas.

Enova then hired David Fisher, former CEO of OptionsXpress in Chicago, separated from the parent company in 2014 and has since reshuffled its portfolio to focus much more on larger, longer-term installment loans to consumers rather than loans on short-term salary. Enova employed approximately 800 people at its downtown Chicago headquarters when Fisher joined Fisher in 2013; over 1,200 are now working there.

Loan growth at Enova jumped in the first quarter. After taking out nearly $ 900 million in installment loans and high-rate lines of credit last year, Enova made $ 237 million in such loans in the first quarter, a normally seasonal period. This was up 50 percent from the previous year period. Growth in installment loans and lines of credit in 2017 was 11%. “We see a lot of tailwinds behind the business,” Fisher said. “We think the economy is in a very good place, kind of Goldilocks for us now.”


Enova’s success comes as the latest startup from Goldstein, the Chicago-based online consumer lender Avant, experienced turbulence after a dazzling start to 2013 which earned him the distinction of being the Chicago’s fastest startup since Groupon. Before, supported by several smart investors, was one of many online players offering unsecured installment loans to consumers and quickly assessing repayment risk on the internet through proprietary technology.

Shortly after Fisher entered, Enova began to gradually settle into Avant’s lending space. Now, Goldstein’s former business appears to have caught up and possibly surpassed the one he now runs in terms of growth. Avant issued $ 600 million in new loans in the last nine months of 2017, according to reports from Kroll Bond Ratings, a company that tracks and evaluates Avant’s loan packages that it sells to investors. Enova generated $ 740 million from these loans over the same period, according to investor information.

Avant, which employed 420 people in Chicago at the end of 2017, recently launched a new credit card, Goldstein said in an email. His business has been profitable, he says, since the third quarter. He refuses to comment further.

Enova loans are actually more expensive for borrowers than Avant’s, whose interest rates exceed 36%. This is roughly where Enova begins its “near prime” installment loans; the highest rates are 99 percent. Loans range from $ 1,000 to $ 10,000 and are repaid over a period of one to five years. The company also offers lines of credit and other installment loans with shorter terms and higher rates.


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