Company highlights strong quarter-to-quarter growth in loan originations, shares progress on Post-Pandemic Growth Plans and announces migration to marketplace strategy.
- Loan origination volume grew to US$34.4 million in Q2 2021, representing an increase of 36.1% over Q1 2021 and representing an increase of 272.4% over Q2 2020.
- IOU added US$18.5 million in loan originations in July 2021, representing the highest monthly loan origination volume in the history of the Company.
- IOU continued to sell its loan originations to institutional buyers as part of its marketplace growth strategy.
- The Company maintained a corporate cash position of $11.1 million at June 30, 2021 despite the repurchase of $1.9 million in convertible debentures.
MONTREAL, Aug. 26, 2021 /CNW Telbec/ - IOU FINANCIAL INC. ("IOU" or "the Company") (TSXV: IOU), a leading online lender to small businesses (IOUFinancial.com), announced today its results for the three and six-month period ended June 30, 2021.
"We are delivering on our Post-Pandemic Growth Plan and these growth figures are the result," said Robert Gloer, President and CEO. "We are committed to continue delivering on our plans and maximizing the growth potential of the marketplace strategy."
The Company is focused on bringing its loan origination volumes back to pre-pandemic levels and returning to profitability on an annual basis by maximizing its exposure to the post-COVID-19 pandemic economic recovery. For all of 2021, the Company is targeting loan originations in the range of US$165M to US$200M as compared to US$84.9M in 2020 and US$154.2M in 2019.
In order to achieve this goal, IOU is investing in its Post-Pandemic Growth Plan (PPGP), first announced during its Q1 2021 Financial Results, by targeting 3 key strategic areas:
- Product expansion: The Company intends to expand its ability to support the post-pandemic growth of small businesses with innovative new funding products designed to meet a wider range of business needs.
- Product distribution: IOU is focussed on launching initiatives to expand its network of quality brokers, adding to its sales team, and investing in marketing and communications programs to generate new levels of awareness, differentiation and growth.
- Technology innovation: The Company is investing in its IOU360 technology platform to better support its network of brokers, merchants and employees with a frictionless user experience for all stakeholders.
The Company is advancing on all fronts with improvements to the IOU360 technology platform underway, a contribution of over US$2.4 million in IOU USA loan originations generated by ZING Funding in Q2 2021, and the introduction of the IOU Financial Cash Back Loan on August 4, 2021.
In addition to the 3 strategic areas outlined above, IOU will further support growth in loan originations by migrating from a loan portfolio strategy (which involves funding directly to IOU's balance sheet) to a marketplace strategy whereby its loan origination growth will be primarily sold to institutional purchasers. This will provide the Company with significantly more room to grow and will necessitate the introduction of new key performance indicators (KPIs) in order to provide meaningful visibility into the performance of the Company. It should be noted that the marketplace strategy will also render previous key performance indicators (KPIs) - such as portfolio yield, cost of borrowing rate, provisional credit loss rates (PCL), net credit loss rates (NCL), allowance for expected credit losses ratio (ACL) and stage 3 delinquency ratios associated with the loan portfolio - irrelevant, and the Company will therefore discontinue the disclosure of these previous KPIs. Instead, the Company will introduce new KPIs to provide meaningful insights into the performance of its marketplace strategy as part of its Q3 2021 Financial Results.
The Company's growth strategies are further supported by strategic additions to the management team announced on August 4, 2021, providing IOU with a clear structure to execute on its growth strategies.
https://www.newswire.ca/news-releases/iou-financial-inc-reports-second-quarter-2021-financial-results-and-breaks-all-time-record-in-monthly-loan-originations-867604687.html