Enova Spotlights Small Business Confidence as Loan Demand Surges

During the fourth quarter, as detailed Tuesday (Jan. 27), Enova reported originations of $2.3 billion, up 32% year over year, lifting its total portfolio to a record $4.9 billion. Small business products accounted for 68% of that portfolio, with consumer lending making up the remaining 32%, according to management on the company’s earnings call.

Chief Executive Officer Steve Cunningham said fourth quarter small business originations climbed 48% year over year to $1.6 billion, marking the eighth consecutive quarter of at least 20% annual growth in that segment. Small business lending revenue rose 34% to $383 million, while consumer revenue increased 3% to $446 million, both quarterly records.

Chief Financial Officer Scott Cornelis added that small business receivables ended the quarter at $3.3 billion, up 34% from a year earlier, underscoring how sharply business lending has expanded.

Cunningham attributed the acceleration to sustained demand paired with stable credit performance. He said Enova leaned more heavily into marketing during the quarter, lifting spend to 23% of revenue, as its analytics platform identified profitable opportunities to meet that demand.

Strong Sentiment

Management emphasized that growth is being supported by unusually strong sentiment among small firms. Cunningham said Enova’s latest small business cash flow survey found that 94% of respondents expect growth over the next 12 months, matching an all-time high.

Nearly 75% reported bypassing traditional banks in favor of alternative lenders such as Enova, and among those who approached banks first, 46% said they were denied financing.

“Our internal and external data highlight that SMBs continue to express confidence in the economy and expect favorable operating conditions during 2026,” Cunningham said, pointing to what he described as stable credit metrics in the business portfolio.

He added that Enova’s brand recognition and scale are helping it compete for borrowers who increasingly value speed and certainty of funding, particularly when those loans support payroll, inventory and day-to-day operating income.

Consumer Demand Reaccelerates

On the consumer side, Cunningham said growth regained momentum late in the quarter, with December proving especially strong. He noted that early default performance improved, allowing Enova to increase originations while maintaining credit discipline.

Cornelis reported that consumer originations reached $613 million for the quarter, up 2% year over year, while consumer receivables rose 6% to $1.6 billion. Consolidated net charge-offs declined to 8.3%, down from a year earlier, reflecting what management characterized as a resilient borrower base supported by steady employment and positive real wage growth.

Asked about proposed interest rate caps on credit cards, Cunningham said such measures would likely reduce access to traditional credit for higher-risk borrowers.

“If that was to happen, that actually would probably be a positive for us,” he said, explaining that constrained card lending could push more consumers toward alternative providers. At the same time, he stressed that Enova does not support rate caps, arguing they tend to hurt the very customers they aim to protect by limiting availability of credit.

Grasshopper and the Bank Charter

A central element of Enova’s strategy is its pending acquisition of Grasshopper Bank, announced last month. Management said combining Enova’s online lending platform with Grasshopper’s national charter and deposit capabilities would simplify the company’s regulatory structure, lower funding costs and open additional states to its products. Regulatory applications have been filed with the Federal Reserve and the Office of the Comptroller of the Currency, and management expects to close the transaction later in 2026.

For 2026, the executives guided to approximately 15% origination growth, with revenue expansion in line with that pace.  Shares were down about 1.7% in after-hours trading on Tuesday.