- 1SMB originations grew 42% year over year to a record $1.7B in Q1.
- 2SMB portfolio grew 37% in a year; net charge-offs stayed in a tight range.
- 3Cunningham says competitors have not changed much and Enova can stay selective.
Enova's small business lending hit a new high in the first quarter, with originations up 42% year over year to a record $1.7 billion, CEO Steve Cunningham said on the company's Q1 earnings call.
Growth and credit
Cunningham credited the company's brand presence, scale and competitive position for the growth. He said the SMB portfolio has grown 37% over the past year and is deliberately spread across regions and industries, and that the SMB net charge-off ratio has held within a narrow band, as it has for two years.
Despite higher gas prices, the company said the economic indicators it watches look strong, and it expects SMB lending to keep growing.
The competitive picture
Kyle Joseph of Stephens asked Cunningham to size up the competition. Cunningham described a large and growing market, helped by strong new business formation over the past five or six years. Companies that are a couple of years old and have shown staying power become potential customers, he said, and the SMB market is growing slightly faster than the overall consumer market.
On competitors, he said Enova's set "has not really changed much over time" and that the company believes it holds a lot of advantages. He called it a "great setup": a large, growing market and competitive strengths that let Enova be selective and generate growth that creates strong returns for shareholders.
Source reporting: deBanked.
