Enova, launched in 2004 and owned for years by Cash America, a Fort Worth, Texas-based consumer lender, was formed in November 2014 with a value of approximately $ 840 million. New York-based OnDeck went public a month later at a market value of $ 1.3 billion. But it was Enova nearly six years later who picked up OnDeck, struggling to survive after the pandemic began, for just $ 90 million.

This combination transforms Enova into a leading profitable platform that provides internet lending to consumers and small businesses. Enova and OnDeck teamed up to create nearly $ 7 billion in loans last year.

Enova, which was started as a payday lender for cash-strapped consumers to cover the monthly expenses, is now the nation’s largest online small business lender. (Think of daycares, dry cleaners, cafes, and specialty food stores.) Today, his consumer business is much more about making installment loans for terms of up to five years rather than making installment loans for terms of up to five years. to payday loans that need to be repaid quickly. The company’s loan mix is ​​now 60% small businesses and 40% consumers.

Usually, given what small businesses suffered during COVID, that wouldn’t be a good thing. But OnDeck’s credit quality has held up well so far. If this continues, David Fisher, CEO of Enova, believes the company is positioned for a bigger rebound than it otherwise would have been once the country emerges from a pandemic-induced crisis.

Recent news that vaccines in production have shown better than expected efficacy bodes well for small business lenders who are living until vaccines are widely available, likely in the second half of next year. Businesses that have tapped into all of their existing lines of credit just to survive will need loans to fully reopen and grow.

“This is why (vaccines) is very good news when you think about the growth of our small business products over the next six to 12 months,” Fisher says in an interview.

Seizing this opportunity, as most consumer finance companies have pulled out of lending, to grow so dramatically also gives Enova the ability to take advantage of the ladder when borrower demand returns in earnest. “This is largely the impetus behind the OnDeck deal,” he says. “Online, the scale makes a big difference.”

With OnDeck added, Enova now employs approximately 1,700 people, including 700 at headquarters in Chicago and another 200 in the Gurnee call center in the northern suburbs of Enova. OnDeck employees are in New York, with 250 others in Denver.

First of all, however. And that incorporates the biggest acquisition the 20s or more Fisher has made as CEO, both at Enova and at other companies.

On October 30, Moody’s Investors Service reaffirmed Enova’s debt rating after closing, but issued a negative outlook. “The negative outlook reflects the risks to creditors related to the remaining operational risks associated with the integration of the OnDeck business, particularly during a period of substantial economic volatility resulting from the coronavirus pandemic,” the rating agency wrote .

The good news, Moody’s said, is that Enova is enriched with $ 490 million in unrestricted cash and an additional $ 124 million in credit that it could access, “which should allow the company to fund its operations. until 2021 without needing to access the financial markets. “

For Enova, the key to going on the offensive and taking advantage of its clear advantage of scale over its competitors is the stability of its existing borrowers. So far, like other consumer lenders, Enova’s credit quality has been remarkably benign given the economic shock caused by the virus.

By granting far fewer loans since the start of the pandemic, Enova has seen its delinquencies and delinquencies drop. In the third quarter, Enova wrote off just 2.8% of its consumer and small business loan balances. Another 3.7 percent were at least 30 days late on payments. Normal payouts for Enova are between 10% and 14% – higher than regular consumer lenders, but a normal range for a business that lends at high rates to middle-class consumers with tarnished credit.

Credit quality remains a wild card, especially as the spread of COVID worsens and Washington, DC’s economic relief has all but dried up. Lenders attribute much of their unexpected good fortune in terms of lower than expected loan cancellations to Congress, and the Trump administration has provided for improved unemployment benefits, forgivable small business loans, and one-off payments to consumers.

But Fisher also says consumers were not as heavily in debt when the crisis entered, and many have increased their savings with additional support rather than spending it.

If credit quality continues, analysts believe Enova will be ahead of its more cautious peers as the economy continues to recover.

“We believe that this type of environment will allow (Enova) to aggregate its market share over time as weaker competitors retreat and higher quality borrowers potentially enter its market as traditional lenders move away. tighten up, ”Jefferies analysts wrote in an Oct. 27 note.

One thing Fisher won’t do is rename OnDeck. He realizes that OnDeck has a much more recognizable name with small businesses than Enova’s brands with them. “We will invest in the OnDeck brand,” he says.

And what does Fisher think of running the country’s largest company in its industry? Enova, for her size, has kept a lower profile than her rivals who have had hot white days in the sun, to trip over.

“I’m a boy from the Midwest, born and raised in Chicago,” he says. “You keep your head down. You are a great team and take care of your own business.”