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What changed in OppFi Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of OppFi Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+465 added−440 removedSource: 10-K (2025-03-11) vs 10-K (2024-03-27)

Top changes in OppFi Inc.'s 2024 10-K

465 paragraphs added · 440 removed · 360 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

84 edited+13 added−19 removed106 unchanged
Biggest changeIf a loan made through OppFi’s platform by a bank partner were deemed to be subject to the usury laws of a state or U.S. territory that had opted-out of the exportation regime, if the loan were not originated in a manner that permitted exportation of interest rate requirements from the state OppFi and its bank partners believed applied at the time of origination, if the loan bore interest or certain fees in excess of the amounts permitted by the state in which the loan was “made” for exportation purposes (or was otherwise in violation of such state’s relevant usury and fee laws) or if the interest exportation authority were determined not to apply to a loan under any particular circumstances, OppFi, its bank partners, or subsequent holders of such loans could become subject to fines, penalties and possible forfeiture of amounts charged to borrowers, and OppFi could decide not to permit bank partners to originate loans in that jurisdiction through its platform or its bank partners or loan investors could choose not to continue doing business with OppFi in such jurisdiction or more broadly, which could adversely impact its growth.
Biggest changeIf a loan made through OppFi’s platform by a bank partner were deemed for any reason to be subject to the usury laws of a state or U.S. territory where a borrower is located rather than the bank partner’s home state, OppFi, its bank partners, or subsequent holders of such loans could become subject to fines, penalties and possible forfeiture of amounts charged to borrowers, and be required to adjust the terms of loans to borrowers in such states on a forward-going basis, including loans that have already been originated.
These inbound calls are prioritized and routed to the appropriate team member based on delinquency status and customer request. 8 Table of Contents When capacity exists, OppFi also outbound dials delinquent customers. The dialing strategy and pace prioritizes customers by delinquency ordered least to most delinquent while also maximizing Customer Advocate efficiency to ensure high service levels for inbound calls.
These inbound calls are prioritized and routed to the appropriate team member based on delinquency status and customer request. When capacity exists, OppFi also outbound dials delinquent customers. The dialing strategy and pace prioritizes 8 Table of Contents customers by delinquency ordered least to most delinquent while also maximizing Customer Advocate efficiency to ensure high service levels for inbound calls.
State licensing statutes impose a variety of requirements and restrictions, including: • record-keeping requirements; • collection and servicing practices; • requirements governing electronic payments, transactions, signatures and disclosures; • examination requirements; 17 Table of Contents • surety bond and minimum net worth requirements; • financial reporting requirements; • notification requirements for changes in principal officers, stock ownership or corporate control; and • restrictions on advertising and other loan solicitation activity, as well as restrictions on loan referral or similar practices.
State licensing statutes impose a variety of requirements and restrictions, including: • record-keeping requirements; • restrictions on collection and servicing practices; • requirements governing electronic payments, transactions, signatures and disclosures; • examination requirements; • surety bond and minimum net worth requirements; • financial reporting requirements; • notification requirements for changes in principal officers, stock ownership or corporate control; and 17 Table of Contents • restrictions on advertising and other loan solicitation activity, as well as restrictions on loan referral or similar practices.
Servicemembers Civil Relief Act Under the Servicemembers Civil Relief Act, or SCRA, there are limits on interest rates chargeable to military personnel and civil judicial proceedings against them, and there are limitations on its ability to collect on a loan to servicemembers on active duty originated prior to the servicemember entering active duty status and, in certain cases, for a period of time thereafter.
Servicemembers Civil Relief Act Under the Servicemembers Civil Relief Act, or SCRA, there are limits on interest rates chargeable to military personnel and civil judicial proceedings against them, and there are limitations on the ability to collect on a loan to servicemembers on active duty originated prior to the servicemember entering active duty status and, in certain cases, for a period of time thereafter.
Failure to comply with any of the applicable rules and regulations may result in, among other things, revocation of required licenses or registration, loss of approved status, effective voiding or rescission of the loan contracts, reduction of allowable interest, class action lawsuits, administrative enforcement actions and civil and criminal liability.
Failure to comply with any of the applicable rules and regulations may result in, among other things, revocation of required licenses or registration, loss of approved status, effective voiding or rescission of the loan contracts, reduction of allowable interest and fees, class action lawsuits, administrative enforcement actions and civil and criminal liability.
Some have experienced a hardship or emergency and need a loan; others are struggling to make ends meet; while others have unplanned expenses. When these consumers apply for a loan through a bank, they are often rejected due to their credit score.
Some have experienced a hardship or emergency and need a loan; others are struggling to make ends meet; while others have unplanned expenses. When these consumers apply for a traditional loan through a bank, they are often rejected due to their credit score.
Electronic Signatures in Global and National Commerce Act The federal Electronic Signatures in Global and National Commerce Act, or ESIGN, and similar state laws, particularly the Uniform Electronic Transactions Act, or UETA, authorize the creation of legally binding and enforceable agreements utilizing electronic records and signatures.
Electronic Signatures in Global and National Commerce Act The federal Electronic Signatures in Global and National Commerce Act, or ESIGN, and similar state laws, particularly the Uniform Electronic Transactions Act, or UETA, authorize the creation of legally binding and enforceable agreements utilizing electronic signatures.
Unlike payday loans and similar credit products that typically do not provide transparency, fairness, and ability to repay guidelines, OppFi is dedicated to offering the best possible product and service through its platform. The average installment loan facilitated by OppFi with its OppLoans platform is approximately $1,500, payable in installments and for an average contractual term of 11 months.
Unlike payday loans and similar credit products that typically do not provide transparency, fairness, and ability to repay guidelines, OppFi is dedicated to offering the best possible product and service through its platform. The average installment loan facilitated by OppFi with its OppLoans platform is approximately $1,750, payable in installments and for an average contractual term of 11 months.
Each share of Class V Voting Stock entitles OFS to one vote per share at any annual or special meeting of the stockholders of OppFi, voting together with the holders of Class A Common Stock as a single class, but the shares of Class V Voting Stock do not entitle OFS to any economic rights in OppFi. 4 Table of Contents The following diagram illustrates the ownership structure of OppFi as of December 31, 2023.
Each share of Class V Voting Stock entitles OFS to one vote per share at any annual or special meeting of the stockholders of OppFi, voting together with the holders of Class A Common Stock as a single class, but the shares of Class V Voting Stock do not entitle OFS to any economic rights in OppFi. 4 Table of Contents The following diagram illustrates the ownership structure of OppFi as of December 31, 2024.
If no mainstream credit options are available with an APR of less than 36%, the application is processed through OppFi’s underwriting platform which utilizes machine learning, bank-approved, proprietary algorithms. This process is designed to allow for maximum value and benefit to be realized by all parties. • Loan flexibility .
If no alternative credit options are available with an APR of less than 36%, the application is processed through OppFi’s underwriting platform which utilizes machine learning, bank-approved, proprietary algorithms. This process is designed to allow for maximum value and benefit to be realized by all parties. • Loan flexibility .
If no mainstream credit options are available with an APR of less than 36%, the application is processed through OppFi’s underwriting platform which utilizes machine learning, bank-approved, proprietary algorithms. This process is designed to allow for maximum value and benefit to be realized by all parties.
If no alternative credit options are available with an APR of less than 36%, the application is processed through OppFi’s underwriting platform which utilizes machine learning, bank-approved, proprietary algorithms. This process is designed to allow for maximum value and benefit to be realized by all parties.
Loans through the OppFi platform are typically used to finance items such as car repairs, medical bills, housing costs, and education expenses. This flexibility helps foster loyalty as customers receive the help they need and the opportunity to rebuild their credit, with the goal of ultimately graduating to mainstream credit products. • Customer Advocates.
Loans through the OppFi platform are typically used to finance items such as car repairs, medical bills, housing costs, and education expenses. This flexibility helps foster loyalty as customers receive the help they need and the opportunity to rebuild their credit, with the goal of ultimately graduating to other credit products. • Customer Advocates.
For example, the Consumer Financial Protection Bureau (“CFPB”) has supervisory and enforcement authority over OppFi and the Federal Trade Commission has jurisdiction to investigate aspects of its business, including with respect to marketing practices. The Dodd-Frank Act, as well as many state statutes, provide a mechanism for the CFPB and state attorneys general to investigate OppFi.
For example, the Consumer Financial Protection Bureau (“CFPB”) has regulatory and enforcement authority over OppFi and the Federal Trade Commission has jurisdiction to investigate aspects of its business, including with respect to marketing practices. The Dodd-Frank Act, as well as many state statutes, provide a mechanism for the CFPB and state attorneys general to investigate OppFi.
Federal Marketing Regulations The Telephone Consumer Protection Act, or TCPA, generally prohibits robocalls, including those calls made using an auto-dialer or prerecorded or artificial voice calls made to a wireless telephone without the prior express consent of the called party (or prior express written consent, if messages constitute telemarketing).
Federal Telephone and Email Marketing Regulations The Telephone Consumer Protection Act, or TCPA, generally prohibits robocalls, including those calls made using an auto-dialer or prerecorded or artificial voice calls made to a wireless telephone without the prior express consent of the called party (or prior express written consent, if messages constitute telemarketing).
Many top lenders use the FICO score among other quantifiable metrics and qualifying rules to determine a potential borrower’s creditworthiness, and these criteria often result in adverse selection—potentially overlooking consumers who are otherwise willing and able to repay while simultaneously accepting consumers who are not. Traditional Banks Have Been Slow to Adopt Digital Technology for Consumer Lending.
Many top lenders use the FICO score among other quantifiable metrics and qualifying rules to determine a potential borrower’s creditworthiness, and these criteria often result in adverse selection—potentially overlooking consumers who are otherwise willing and able to repay while simultaneously accepting consumers who are not. Banks and Other Credit Providers Have Been Slow to Adopt Digital Technology for Consumer Lending.
Generally, these consumers are in need of fair, affordable, transparent and flexible credit products to cover everyday expenses and cash shortfalls, but traditional banks and credit providers are largely unwilling to service these consumers due to low FICO scores or similar factors.
Generally, these consumers are in need of fair, affordable, transparent and flexible credit products to cover everyday expenses and cash shortfalls, but banks and other credit providers are largely unwilling to service these consumers due to low FICO scores or similar factors.
The FDCPA primarily applies to third-party debt collectors, meaning parties collecting on behalf of another, and debt collection laws of certain states also impose similar requirements more broadly on creditors who collect their own debts. In addition, the CFPB prohibits unfair, deceptive or abusive acts or practices, or UDAAPs in debt collection, including 13 Table of Contents first-party debt collection.
The FDCPA primarily applies to third-party debt collectors, meaning parties collecting on behalf of another, and debt collection laws of certain states also impose similar requirements more broadly on creditors who collect their own debts. In addition, the CFPB prohibits unfair, deceptive or abusive acts or practices, or UDAAPs in debt collection, including first-party debt collection.
As the focal point of its human capital strategy, OppFi attracts and recruits diverse, exceptionally talented, experienced and motivated employees. As of December 31, 2023, OppFi had approximately 445 full-time employees. OppFi also engages contractors and consultants as needed to support its operations. None of OppFi’s employees are represented by a labor union or subject to a collective bargaining agreement.
As the focal point of its human capital strategy, OppFi attracts and recruits exceptionally talented, experienced and motivated employees. As of December 31, 2024, OppFi had approximately 445 full-time employees. OppFi also engages contractors and consultants as needed to support its operations. None of OppFi’s employees are represented by a labor union or subject to a collective bargaining agreement.
Traditional banks, which have historically played a substantial role in consumer credit markets, have often been slow to adapt to digital adoption among consumers. There are approximately 4,600 Federal Deposit Insurance Corporation (“FDIC”) insured institutions, many of which have legacy technology and lack sufficient mobile solutions in today’s digital era.
Banks and other credit providers, which have historically played a substantial role in consumer credit markets, have often been slow to adapt to digital adoption among consumers. There are approximately 4,600 Federal Deposit Insurance Corporation (“FDIC”) insured institutions, many of which have legacy technology and lack sufficient mobile solutions in today’s digital era.
The economic difference to OppFi in loans originated via the bank partnership model as compared to the direct origination model are immaterial and generally result from a minimal program fee paid to OppFi for each origination as well as increased compliance costs for OppFi, which collectively have an insignificant impact on OppFi’s customer lifetime value.
The economic difference to OppFi with respect to loans originated via the bank partnership model as compared to the direct origination model are immaterial and generally result from a minimal program fee paid to OppFi for each origination as well as increased compliance costs for OppFi, which collectively have an insignificant impact on OppFi’s customer lifetime value.
OppFi has a detailed privacy policy, which complies with GLBA and is accessible from every page of its website. OppFi maintains consumers’ personal information securely, and OppFi does not sell, rent or share such information with third parties for marketing purposes unless previously agreed to by the consumer.
OppFi has a detailed privacy policy, which is designed to comply with GLBA and is accessible from every page of its website. OppFi maintains consumers’ personal information securely, and OppFi does not sell, rent or share such information with third parties for marketing purposes unless previously agreed to by the consumer.
TILA also regulates the advertising of credit and gives borrowers, among other things, 12 Table of Contents certain rights regarding updated disclosures and the treatment of credit balances. OppFi, on behalf of the applicable bank partner, provides applicants with a TILA disclosure when applicants complete their loan applications on its platform.
TILA also regulates the advertising of credit and gives borrowers, among other things, certain rights regarding updated disclosures and the treatment of credit balances. OppFi, on behalf of the applicable bank partner, provides applicants with a TILA disclosure when applicants complete their loan applications on its platform.
Qualified customers who apply and are approved by 1:00 pm ET on a business day are eligible for funding on the same day their applications are approved. • Tech-driven decisioning . OppFi’s tech stack uses machine learning and real-time data analytics to generate credit decisions.
Qualified customers who apply and are approved by 1:00 pm ET on a business day are eligible for funding on the same day their applications are approved. • Tech-driven decisioning . OppFi’s tech stack uses machine learning and real-time data analytics to generate credit decisions on behalf of bank partners.
OppFi believes that this digital foundation creates a significant and durable advantage over traditional banks and credit providers who have been slow to adapt legacy technology into modern digitally native solutions, as well as higher-cost alternatives, such as bank overdraft fees, tribal lenders, payday and title loans, lease-to-own services.
OppFi believes that this digital foundation creates a significant and durable advantage over sources of traditional loans who have been slow to adapt legacy technology into modern digitally native solutions, as well as higher-cost alternatives, such as bank overdraft fees, tribal lenders, payday and title loans, lease-to-own services.
OppFi also seeks to evaluate and test new products or features that can increase its reach to the 63 million credit marginalized U.S. consumers. OppFi is evaluating corporate development opportunities to diversify its overall business by potentially acquiring businesses in adjacent categories, inclusive of new customer types and new products that fit OppFi’s mission.
OppFi also seeks to evaluate and test new products or features that can increase its reach to the 60 million U.S. consumers that face credit insecurity. OppFi is evaluating corporate development opportunities to diversify its overall business by potentially acquiring businesses in adjacent categories, inclusive of new customer types and new products that fit OppFi’s mission.
If a borrower with an outstanding loan qualifies for SCRA protection the interest rate on their loan (including certain fees) will be reduced to 6% for the duration of the borrower’s active duty. During this 15 Table of Contents period, any interest holder in the loan will not receive the difference between 6% and the loan’s original interest rate.
If a borrower with an outstanding loan qualifies for SCRA protection the interest rate on their loan (including most fees) will be reduced to 6% for the duration of the borrower’s active duty. During this period, any interest holder in the loan will not receive the difference between 6% and the loan’s original interest rate.
Many non-bank lenders utilize non-FICO based alternative methods to determine creditworthiness. Applicants are evaluated based on metrics such as consistency of income, types of previous loans, previous repayment patterns and employment status, among many others.
Many non-bank lenders and lenders through financial technology platforms utilize non-FICO based alternative methods to determine creditworthiness. Applicants are evaluated based on metrics such as consistency of income, types of previous loans, previous repayment patterns and employment status, among many others.
After the approximately five-minute application process submitted through OppFi’s fully digital platform, consumers typically receive quick credit decisions. Approximately 88% of all credit decisions were automated in the year ended December 31, 2023. • Same-day funding service . OppFi offers a same-day funding service in collaboration with its partner banks.
After the approximately five-minute application process submitted through OppFi’s fully digital platform, consumers typically receive quick credit decisions. Approximately 92.5% of all credit decisions were automated in the year ended December 31, 2024. • Same-day funding service . OppFi offers a same-day funding service in collaboration with its partner banks.
OppFi has also implemented an identity theft prevention program, as required by FCRA and its implementing regulations. Fair Debt Collection Practices Act The federal Fair Debt Collection Practices Act, or FDCPA, provides guidelines and limitations on the conduct of certain debt collectors in connection with the collection of consumer debts.
OppFi has also implemented an identity theft prevention program, as required by FCRA and its implementing regulations. Fair Debt Collection Practices Act The federal Fair Debt Collection Practices Act, or FDCPA, and Regulation F, which implements it, provides guidelines and limitations on the conduct of certain debt collectors in connection with the collection of consumer debts.
As part of the services OppFi provides, and in compliance with SCRA, OppFi requires the borrower to send it a written request and a copy of the borrower’s mobilization orders to obtain an interest rate reduction on a loan due to military service.
In compliance with SCRA, OppFi requires the borrower to send it a written request and a copy of the borrower’s mobilization orders to obtain an interest rate reduction on a loan due to military service.
It also has supervisory and examination powers over certain providers of consumer financial products and services, including large banks, payday lenders, “larger participants” in certain financial services markets defined by CFPB regulation, and non-bank entities determined to present a risk to consumers after notice and an opportunity to respond.
It also has supervisory and examination powers over certain providers of consumer financial products and services, including large banks, payday lenders, “larger participants” in certain financial services markets defined by CFPB regulation, and non-bank entities determined to present a risk to consumers after notice and an opportunity to respond. The CFPB has imposed restrictions on lending practices.
All transfers of funds related to its operations conform to the EFTA, its regulations and NACHA guidelines. As part of OppFi’s servicing activities, OppFi obtains necessary electronic authorization from borrowers and investors for such transfers in compliance with applicable rules.
OppFi has designed its processes with the intent of ensuring all transfers of funds related to its operations conform to the EFTA, its regulations and NACHA guidelines. As part of OppFi’s servicing activities, OppFi obtains necessary electronic authorization from borrowers and investors for such transfers in compliance with applicable rules.
On the Closing Date, the Business Combination with OppFi was consummated, resulting in the combined company being organized in an “Up-C” structure, and FGNA as the registrant changed its name to “OppFi Inc.” OppFi is headquartered in Chicago, Illinois.
On October 2, 2020, FGNA completed its IPO. On the Closing Date, the Business Combination with OppFi was consummated, resulting in the combined company being organized in an “Up-C” structure, and FGNA as the registrant changed its name to “OppFi Inc.” OppFi is headquartered in Chicago, Illinois.
Further, OppFi is subject to inspections, examinations, supervision and regulation by applicable agencies in each state in which OppFi is licensed or in which our borrowers reside. Regulatory oversight of OppFi’s business may change over time.
Further, OppFi is subject to inspections, examinations, supervision and regulation by applicable agencies in each state in which OppFi is licensed. Regulatory oversight of OppFi’s business may change over time.
The OppFi platform is a mobile-optimized online application where eligible applicants, at their request, are able to opt into the OppFi TurnUp Program. This program helps these applicants find more affordable credit options by checking the market voluntarily on their behalf for sub-36% annual percentage rate, or APR products offered by traditional, mainstream lenders.
The OppFi platform is a mobile-optimized online application where eligible applicants, at their request, are able to opt into the OppFi TurnUp Program. This program helps these applicants find more affordable credit options by checking the market voluntarily on their behalf for sub-36% annual percentage rate, or APR, products offered by third-party lenders through other platforms.
In addition, approximately 74.2% of loans originated on the OppFi platform were derived through key strategic partners who are compensated with a negotiated fixed unit price per loan funded or fixed percent of principal dollars funded. Approximately 7.5% of loans originated on the OppFi platform were sourced from direct mail marketing channels.
In addition, approximately 69.5% of loans originated on the OppFi platform were derived through key strategic partners who are compensated with a negotiated fixed unit price per loan funded or fixed percent of principal dollars funded. Approximately 3.9% of loans originated on the OppFi platform were sourced from direct mail marketing channels.
As of December 31, 2023, OppFi owned approximately 17.0% of the OppFi Units and controls OppFi-LLC as the sole manager of OppFi-LLC in accordance with the terms of the Third Amended and Restated Limited Liability Company Agreement of OppFi-LLC (“OppFi A&R LLCA”). All remaining OppFi Units (“Retained OppFi Units”) are beneficially owned by the Members.
As of December 31, 2024, OppFi owned approximately 25.6% of the OppFi Units and controls OppFi-LLC as the sole manager of OppFi-LLC in accordance with the terms of the Third Amended and Restated Limited Liability Company Agreement of OppFi-LLC (“OppFi A&R LLCA”). All remaining OppFi Units (“Retained OppFi Units”) are beneficially owned by the Members.
OppFi believes it competes favorably based on the following competitive factors: • Constantly improving models; 11 Table of Contents • Compelling loan offers from bank partners to consumers; • Automated and user-friendly loan application process; • Cloud-native, multi-tenant architecture; • Combination of technology and customer acquisition for bank partners; • Robust and diverse loan funding program; and • Brand recognition and trust.
OppFi believes it competes favorably based on the following competitive factors: • Brand recognition and trust; • Compelling loan offers from bank partners to consumers; • Automated and user-friendly loan application process; • Combination of technology and customer acquisition for bank partners; • Constantly improving models; • Cloud-native, multi-tenant architecture; and • Robust and diverse loan funding program. 11 Table of Contents Available Information Our website address is www.oppfi.com.
If any lower cost products are identified, OppFi displays the offers from the applicable lenders and consumers can choose to finish their application at another lender’s website. At that point, the applicant leaves OppFi’s website.
If any lower cost products are identified, OppFi displays the offers from the applicable lenders and consumers can choose to finish their application at the website of such lender. At that point, the applicant leaves OppFi’s website.
This process provides consumers with access to fair, transparent credit as well as an opportunity to build financial health over time through our standard reporting to the three major credit bureaus. Installment loans through the OppFi platform have an average contractual length of 11 months. These loans have no fees (neither origination, nor late, nor insufficient funds).
This process provides consumers with access to fair, transparent credit as well as an opportunity to build financial health over time through our standard reporting to the three major credit bureaus. Installment loans through the OppFi platform have no fees (neither origination, nor late, nor insufficient funds).
From inception through December 31, 2023, OppFi has facilitated more than $5.8 billion in gross loan issuance covering more than 3.4 million loans. OppFi’s primary product is offered by its OppLoans platform. Customers on this platform are generally U.S. consumers, who are employed, have bank accounts, and earn median wages.
From inception through December 31, 2024, OppFi has facilitated more than $7.2 billion in gross loan issuance covering more than 4.0 million loans. OppFi’s primary product is offered by its OppLoans platform. Customers on this platform are generally U.S. consumers, who are employed, have bank accounts, and earn median wages.
OppFi has not experienced any work stoppages, and OppFi considers its relations with its employees to be good. Corporate Information FGNA was incorporated in the State of Delaware on June 24, 2020 as a special purpose acquisition company under the name FG New America Acquisition Corp.
OppFi has not experienced any work stoppages, and OppFi considers its relations with its employees to be good. Corporate Information FGNA was incorporated in the State of Delaware on June 24, 2020 as a special purpose acquisition company under the name FG New America Acquisition Corp. OppFi-LLC is a Delaware limited liability company formed on December 3, 2015.
State Licensing/Registration OppFi holds licenses, registrations, and similar filings so that OppFi can conduct business, including providing referral services and origination assistance to lenders on its platform and servicing and collecting loans, in all states and the District of Columbia where its activities require such licensure, registration or filing.
OppFi’s ongoing compliance program seeks to comply with these requirements. State Licensing/Registration OppFi holds licenses, registrations, and similar filings so that OppFi can conduct business, including providing referral services and origination assistance to lenders on its platform and servicing and collecting loans, in all states and the District of Columbia where its activities require such licensure, registration or filing.
With its OppLoans platform, OppFi facilitates the issuance of fair, transparent, digital specialty finance products structured to rebuild financial health for the approximately 63 million U.S. consumers that are credit marginalized.
With its OppLoans platform, OppFi facilitates the issuance of fair, transparent, digital specialty finance products structured to rebuild financial health for the approximately 60 million U.S. consumers that face credit insecurity.
OppFi’s bank partner FEB began originating loans on the OppFi platform in May 2020 and OppFi’s bank partner CCB began originating loans on the OppFi platform in October 2020. OppFi has entered into separate agreements with each of its three bank partners.
OppFi’s bank partner FinWise began originating loans on the OppFi platform in January 2018, OppFi’s bank partner FEB began originating loans on the OppFi platform in May 2020 and OppFi’s bank partner CCB began originating loans on the OppFi platform in October 2020. 9 Table of Contents OppFi has entered into separate agreements with each of its three bank partners.
After an application is submitted, the OppFi TurnUp Program helps eligible applicants find more affordable credit options by checking the market voluntarily on their behalf for sub-36% APR products offered by traditional, mainstream lenders.
After an application is submitted, the OppFi TurnUp Program helps eligible applicants find more affordable credit options by checking the market voluntarily on their behalf for sub-36% APR products offered by third-party lenders through other platforms.
In contrast to traditional credit providers, OppFi does not take in account traditional credit scores and instead uses alternative data to assist in identifying borrowers who have the ability to repay. • OppFi TurnUp Program .
In contrast to traditional credit models, OppFi’s models do not take into account traditional credit scores and instead uses alternative data to assist in identifying borrowers who have the ability to repay. • OppFi TurnUp Program.
For the year ended December 31, 2023, approximately 18.3% of loans originated on the OppFi platform were generated by search engine optimization, email marketing, and customer referrals.
For the year ended December 31, 2024, approximately 20.9% of loans originated on the OppFi platform were generated by search engine optimization, email marketing, and customer referrals.
Based on data in the report, a loan amount of $2,530 is necessary to break even at a 36% APR, and the trend is even more pronounced for smaller loan amounts.
Based on data in the report, a loan amount of $2,530 is necessary to break even at a 36% APR, and the trend is even more pronounced for smaller loan amounts with a $594 loan requiring an APR of 103.5% for a lender to break even.
OppFi’s primary mission is to facilitate financial inclusion and credit access to the 63 million everyday Americans who are credit marginalized, through its products and an unwavering commitment to its customers.
OppFi’s primary mission is to facilitate financial inclusion and credit access to the 60 million everyday Americans who face credit insecurity, through its products and an unwavering commitment to its customers.
OppFi maintained an A- rating from the Better Business Bureau (BBB) and a 4.5/5.0 star rating with more than 4,100 Trustpilot reviews, as of December 31, 2023. 6 Table of Contents For the years ended December 31, 2023 and 2022, total revenue was approximately $509 million and $453 million, respectively, representing period-over-period total revenue growth of approximately 12%.
OppFi maintained an A+ rating from the Better Business Bureau (BBB) and a 4.5/5.0 star rating with more than 4,800 Trustpilot reviews, as of December 31, 2024. For the years ended December 31, 2024 and 2023, total revenue was approximately $526 million and $509 million, respectively, representing period-over-period total revenue growth of approximately 3.3%.
Fair Credit Reporting Act The federal Fair Credit Reporting Act, or FCRA, as amended by the Fair and Accurate Credit Transactions Act, and administered by the CFPB, promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies.
Fair Credit Reporting Act The federal Fair Credit Reporting Act, or FCRA, as amended by the Fair and Accurate Credit Transactions Act, and Regulation V, which implements it, promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies.
The average APR for a loan facilitated on the OppLoans platform over the past three years has been approximately 155%, which has not changed significantly from year to year. 7 Table of Contents OppLoans Platform OppFi has determined that alternative metrics outside of FICO scores can be used reliably to determine a consumer’s true ability and willingness to repay.
The average APR for a loan facilitated on the OppLoans platform in 2024 was 163% and over the past three years has been approximately 157%. 7 Table of Contents OppLoans Platform OppFi has determined that alternative metrics outside of FICO scores can be used reliably to determine a consumer’s true ability and willingness to repay.
The proprietary score determines the exact loan terms to be offered to an applicant. OppFi’s platform offers consumers a streamlined application experience that is simple, easy and transparent. Approximately 89% of OppFi’s underwriting decisions were automated, during the year ended December 31, 2023.
The proprietary score determines the exact loan terms to be offered to an applicant by the applicable bank partner. OppFi’s platform offers consumers a streamlined application experience that is simple, easy and transparent. Approximately 92.5% of underwriting decisions on the OppFi platform were automated during the year ended December 31, 2024.
State Lending Regulations State Usury Limitations With respect to bank partners that are FDIC-insured, state banks originating loans on our platform, which represent the vast majority of loans originated or national banks or federal savings banks originating loans on our platform, federal case law and relevant regulatory guidance (including FDIC advisory opinion 92-47) permit depository institutions to “export” requirements regarding interest rates and certain fees considered to be “interest” under federal law from the state or U.S. territory where the bank is located for all loans originated from such state, regardless of the usury limitations imposed by the state law of the borrower’s residence or other states with which the loan may have a geographic nexus, unless the state has chosen to opt out of the exportation regime.
With respect to bank partners that are FDIC-insured, state banks originating loans on our platform, which represent the vast majority of loans originated or national banks or federal savings banks originating loans on our platform, federal case law and relevant regulatory guidance (including FDIC advisory opinion 92-47) permit depository institutions to “export” the interest rates and certain fees considered to be “interest” under federal law permitted from the state or U.S. territory where the bank is located for all loans originated from such state, regardless of the usury limitations imposed by the state law of the borrower’s residence.
OppFi’s mix of new and refinanced loans also impacts its average acquisition cost. OppFi believes this approach allows it to focus on higher quality, lower cost customer acquisition while maximizing reach and enhancing awareness of OppFi’s platform. OppFi continues to invest in new marketing channels, which it believes will provide OppFi with further competitive advantages and support its ongoing growth.
OppFi believes this approach allows it to focus on higher quality, lower cost customer acquisition while maximizing reach and enhancing awareness of OppFi’s platform. OppFi continues to invest in new marketing channels, which it believes will provide OppFi with further competitive advantages and support its ongoing growth. Commitment to Customer Service OppFi is nationally recognized for its exceptional customer service.
Equal Credit Opportunity Act The Equal Credit Opportunity Act, or ECOA, prohibits creditors from discriminating against credit applicants on the basis of race, color, sex, age (provided that the applicant has the capacity to enter into a binding contract), religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program, or the fact that the applicant has in good faith exercised any right under the federal Consumer Credit Protection Act or certain state laws.
TILA also imposes requirements on the terms of credit card accounts, and the process of originating and servicing such accounts. 12 Table of Contents Equal Credit Opportunity Act The Equal Credit Opportunity Act, or ECOA, and Regulation B, which implements it, prohibits creditors from discriminating against credit applicants on the basis of race, color, sex, age (provided that the applicant has the capacity to enter into a binding contract), religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program, or the fact that the applicant has in good faith exercised any right under the federal Consumer Credit Protection Act or certain state laws.
As of December 31, 2023, OppFi had served more than 1 million unique customers since its inception. OppFi’s net promoter score (NPS) was 79 for the year ended December 31, 2023 and is reflective of its commitment to providing a best-in-class customer service experience.
OppFi believes that it has achieved significant scale with the OppLoans product. As of December 31, 2024, OppFi had served more than 1.4 million unique customers since its inception. OppFi’s net promoter score (NPS) was 78 for the year ended December 31, 2024 and is reflective of its commitment to providing a best-in-class customer service experience.
OppFi ended its direct lending program during 2023 and exclusively utilized a bank partner model as of December 31, 2023. The bank partner model leverages OppFi’s marketing and servicing expertise and the banks’ broad national presence to facilitate credit access in 38 states, as of December 31, 2023.
OppFi exclusively utilized a bank partner model throughout the year ending December 31, 2024. The bank partner model leverages OppFi’s marketing and servicing expertise and the banks’ broad national presence to facilitate credit access in 40 states, as of December 31, 2024.
OppFi is also typically required to complete an annual report (or its equivalent) to each state’s regulator. The statutes also typically subject OppFi to the supervisory and examination authority of state regulators.
OppFi is also typically required to complete an annual report (or its equivalent) to each state’s regulator where it is licensed, registered, or has made a similar filing. In states where OppFi is licensed, registered, or made a similar filing, the state statutes requiring such also typically subject OppFi to the supervisory and examination authority of state regulators.
State Disclosure and Lending Practice Requirements The loans originated on OppFi’s platform by its bank partners may be subject to state laws and regulations that impose requirements related to loan disclosures and terms, credit discrimination, credit reporting, debt collection, and unfair or deceptive business practices. OppFi’s ongoing compliance program seeks to comply with these requirements.
See the section titled “Risk Factors” for more information about recent case law developments. State Disclosure and Lending Practice Requirements The loans originated on OppFi’s platform by its bank partners may be subject to state laws and regulations that impose requirements related to loan disclosures and terms, credit discrimination, credit reporting, debt collection, and unfair or deceptive business practices.
In connection with such accounts, TILA requires the provision of certain solicitation and account-opening disclosures. TILA also imposes requirements on the terms of credit card accounts, and the process of originating and servicing such accounts.
In connection with such accounts, TILA requires the provision of certain solicitation and account-opening disclosures.
Customers have proven to be loyal and highly satisfied, which in turn drives additional growth through referrals. 10 Table of Contents Integrated and Efficient Multi-Channel Marketing Approach OppFi utilizes an integrated multi-channel marketing strategy to reach potential customers.
OppFi’s nationwide presence allows it to increase awareness, directly contributing to organic growth, as well as the growth and success of bank partners. Customers have proven to be loyal and highly satisfied, which in turn drives additional growth through referrals. Integrated and Efficient Multi-Channel Marketing Approach OppFi utilizes an integrated multi-channel marketing strategy to reach potential customers.
Commitment to Customer Service OppFi is nationally recognized for its exceptional customer service. OppFi maintained a 4.5/5.0 star rating on Trustpilot with more than 4,100 reviews, making OppLoans one of the top consumer-rated financial platforms online, and an A- rating from the Better Business Bureau (BBB), as of December 31, 2023.
OppFi maintained a 4.5/5.0 star rating on Trustpilot with more than 4,800 reviews, making OppLoans one of the top consumer-rated financial platforms online, and an A+ rating from the Better Business Bureau (BBB), as of December 31, 2024. In addition, OppFi has a Net Promoter Score (NPS) of 78 for the year ended December 31, 2024.
Enforcement of the rule is stayed, pending resolution of the litigation. 16 Table of Contents OppFi believes the rule is common sense legislation and good for the industry. It is possible the rule, when enforced, could impact OppFi’s business or require it to obtain additional borrower consents or make additional disclosures on behalf of its bank partners.
It is possible the rule, when enforced, could impact OppFi’s business or require it to obtain additional borrower consents or make additional disclosures on behalf of its bank partners.
OppFi expects to accelerate profitable growth by driving core product volume, serving more non-prime consumers with strategic marketing and credit enhancements, and expanding into new customer and product types via acquisitions.
OppFi expects to accelerate profitable growth by driving core product volume, serving more non-prime consumers with strategic marketing and credit enhancements, and expanding into new customer and product types via acquisitions such as its strategic acquisition of an equity interest in Bitty Holdings, LLC (“Bitty”), a small business credit access company, in 2024.
It is not an accident that OppFi has received numerous best place to work awards in its Chicago headquarters. OppFi has brought together a remarkable diversity of thinkers. The members of OppFi’s management team come from diverse backgrounds with varying ethnicities, education backgrounds, genders and ages.
It is not an accident that OppFi has received numerous best places to work awards in its Chicago headquarters. The members of OppFi’s management team reflect the communities we serve, with varying ethnicities, educational backgrounds, genders, ages, religions, physical appearances and numerous other traits.
These rules apply to loans facilitated through OppFi’s platform, and OppFi assists with compliance as part of the services OppFi provides to its bank partners. or closed-end credit transactions, required disclosures include, among others, providing the annual percentage rate, the finance charge, the amount financed, the number of payments, the amount of the monthly payment, the presence and amount of certain fees, and the presence of certain contractual terms.
For closed-end credit transactions, required disclosures include, among others, providing the annual percentage rate, the finance charge, the amount financed, the number of payments, the amount of the monthly payment, the presence and amount of certain fees, and the presence of certain contractual terms.
OppFi collects and uses a wide variety of information to help ensure the integrity of its services and to provide features and functionality to its customers.
The GLBA also requires financial institutions to implement administrative, technical, and physical safeguards to ensure the confidentiality, integrity, security, and proper disposal of nonpublic personal information. OppFi collects and uses a wide variety of information to help ensure the integrity of its services and to provide features and functionality to its customers.
In addition, OppFi has a Net Promoter Score (NPS) of 79 for the year ended December 31, 2023. Financial education is also important, which is why OppFi launched its own online financial education portal —OppU. Customers and non-customers can use OppU to learn about building credit and budgeting, as well as how to better manage finances.
Financial education is also important, which is why OppFi launched its own online portal, OppU, and collaborates with Zogo to deliver financial education through multiple platforms. Customers and non-customers can use both platforms to learn about building credit and budgeting, as well as how to better manage finances.
Military Lending Act Under the Military Lending Act, certain members of the armed forces serving on active duty and their dependents must be identified and be provided with certain protections when becoming obligated on a consumer credit transaction.
Other protections offered to servicemembers under the SCRA, including protections related to the collection of loans, do not require the servicemember to take any particular action, such as submitting military orders, to claim benefits. 15 Table of Contents Military Lending Act Under the Military Lending Act, certain members of the armed forces serving on active duty and their dependents must be identified and be provided with certain protections when becoming obligated on a consumer credit transaction.
OppFi has created unique capabilities to effectively identify and attract qualified customers, which supports its long-term growth objectives at target customer acquisition costs. Marketing costs from OppFi’s strategic partner channel are based on fixed price agreements, while marketing costs for direct mail and other direct channels can vary based on the number of customers that ultimately apply and obtain loans.
Marketing costs from OppFi’s strategic partner channel are based on fixed price agreements, while marketing costs for direct mail and other direct channels can vary 10 Table of Contents based on the number of customers that ultimately apply and obtain loans. OppFi’s mix of new and refinanced loans also impacts its average acquisition cost.
Privacy and Data Security Laws The federal Gramm-Leach-Bliley Act, or GLBA, includes limitations on financial institutions’ disclosure of nonpublic personal information about a consumer to nonaffiliated third parties, in certain circumstances requires financial institutions to limit the use and further disclosure of nonpublic personal information by nonaffiliated third parties to whom they disclose such information and requires financial institutions to disclose certain privacy policies and practices with respect to information sharing with affiliated and unaffiliated entities as well as to safeguard personal customer information.
While its internal servicing team is not subject to the formal requirements of the FDCPA in most cases, OppFi has established policies intended to substantially comply with the collection practice requirements under the FDCPA as a means of complying with more general UDAAP/UDAP standards. 13 Table of Contents Privacy and Data Security Laws The federal Gramm-Leach-Bliley Act, or GLBA, and Regulation P, which implements it, includes limitations on financial institutions’ disclosure of nonpublic personal information about a consumer to nonaffiliated third parties, in certain circumstances requires financial institutions to limit the use and further disclosure of nonpublic personal information by nonaffiliated third parties to whom they disclose such information, requires financial institutions to provide consumers with an opportunity to opt out of information sharing with certain nonaffiliated third parties, and requires financial institutions to provide privacy policies with disclosures concerning the collection and use of nonpublic personal information as well as with respect to information sharing practices with affiliated and unaffiliated entities.
These protections include: a limit on the Military Annual Percentage Rate (an all-in cost-of-credit measure which is the same as the APR for loans facilitated on its platform) of 36%, certain required disclosures before origination, a prohibition on charging prepayment penalties and a prohibition on arbitration agreements and certain other loan agreement terms.
These protections include: a limit on the Military Annual Percentage Rate of 36%, certain required disclosures before origination, a prohibition on charging prepayment penalties and a prohibition on arbitration agreements and certain other loan agreement terms. As part of the services OppFi provides, OppFi ensures compliance with the requirements of the Military Lending Act, where applicable.
Also, if the ability-to-pay determination is re-inserted by the CFPB, OppFi could be required to take additional actions in connection with loan transactions made on behalf of its bank partners.
Also, if the ability-to-pay determination is re-inserted by the CFPB, OppFi could be required to take additional actions in connection with loan transactions made on behalf of its bank partners. 16 Table of Contents State Lending Regulations State Usury Limitations Many states and territories have laws that limit the interest rate and fees that a lender may charge ( i.e. , usury laws), particularly with regard to non-bank lenders.
OppU, a financial education initiative, provides free, standards-aligned courses intended to teach financial literacy. With OppU, both customers and non-customers can learn what it takes to build credit as well as how to budget and manage their finances. OppFi also currently services customers for its SalaryTap and OppFi Card products. SalaryTap is a payroll deduction secured installment loan product.
This gamified learning experience allows customers to redeem gift card rewards for completing short-form, easily digestible modules. Further, OppFi’s internal financial education initiative, OppU, provides free, standards-aligned courses intended to teach financial literacy. With OppU, both customers and non-customers can learn what it takes to build credit as well as how to budget and manage their finances.
The CFPB has imposed, and will continue to impose, restrictions on lending practices, including with respect to the terms of certain loans. OppFi and its bank partners are subject to the CFPB’s enforcement authority, which could increase under new CFPB leadership. The CFPB may request reports concerning OppFi’s organization, business conduct, markets and activities.
OppFi and its bank partners are subject to the CFPB’s enforcement authority. The CFPB may request reports concerning OppFi’s organization, business conduct, markets and activities.
Customers are offered transparent and flexible repayment options, including allowing customers to make payments for their full-term, as well as allowing them to prepay their loans with no penalties. In pursuit of its mission to provide financial inclusion to everyday Americans, OppFi focuses not only on facilitating access to credit but also offering education to build financial health.
Customers are offered transparent and flexible repayment options, including allowing customers to make payments for their full-term, as well as allowing them to prepay their loans with no penalties.
There have also been recent judicial decisions that could affect the collectability of loans sold by OppFi’s bank partners after origination and the exposure of loan purchasers to potential fines or other penalties for usury violations. See the section titled “Risk Factors” for more information about recent case law developments.
Moreover, OppFi could decide not to permit bank partners to originate loans in that jurisdiction through its platform or its bank partners or loan investors could choose not to continue doing business with OppFi in such jurisdiction or more broadly, all of which could adversely impact OppFi’s growth There have also been recent judicial decisions that could affect the collectability of loans sold by OppFi’s bank partners after origination and the exposure of loan purchasers to potential fines or other penalties for usury violations.
For more information regarding the CFPB and the CFPB rules to which OppFi is subject or may become subject, see “Risk Factors” included elsewhere in this report. 14 Table of Contents Federal Trade Commission Act Under Section 5 of the Federal Trade Commission Act, OppFi and its bank partners are prohibited from engaging in unfair and deceptive acts and practices.
As of the date hereof, OppFi is not subject to any enforcement actions by the CFPB. For more information regarding the CFPB and the CFPB rules to which OppFi is subject or may become subject, see “Risk Factors” included elsewhere in this report.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe also do not currently offer a broad suite of products that bank partners may find desirable; • if we are unable to manage the risks related to new products and service offerings that we offer, our business, financial condition and results of operations could be adversely affected; • if we are unable to maintain diverse and robust sources of capital to fund loans originated by us on our platform in certain states or fund our purchase of participation rights in the economic interests of loans originated by our bank partners on our platform, then our growth prospects, business, financial condition and results of operations could be adversely affected; 19 Table of Contents • we rely on borrowings under our corporate and warehouse credit facilities to fund certain aspects of our operations, and any inability to meet our obligations as they come due or to comply with various covenants could harm our business; • if we fail to establish and maintain proper and effective internal controls over financial reporting, as a public company, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in financial reporting and the trading price of our securities may decline; • it may be difficult and costly to protect our intellectual property rights, and we may not be able to ensure their protection; • if loans originated by us or loans originated by our bank partners and facilitated by our platform are found to violate the laws of one or more states, whether at origination or after sale by the originating bank partner, such loans may be unenforceable or otherwise impaired, and we or other program participants may be subject to, among other things, fines, judgments and penalties, and/or our commercial relationships may suffer, each of which would adversely affect our business, financial condition and results of operations; • if we are unsuccessful in preventing the California Department of Financial Protection and Innovation (“DFPI”) from enforcing the interest rate caps set forth in the California Financing Law, as amended by the Fair Access to Credit Act, a/k/a AB 539 (“CFL”), against loans that are originated by our bank partners on our platform and serviced through our technology and service platform, our bank partners’ ability to originate loans on our platform in California could suffer, which could have a material adverse effect on our business, results of operations and financial condition; • if loans facilitated through our platform for one or more bank partners are subject to successful challenge that the bank partner was not the “true lender,” such loans may be unenforceable, subject to rescission, or otherwise impaired, we or other program participants may be subject to fines, judgments and penalties, and/or our commercial relationships may suffer, each of which would adversely affect our business, financial condition and results of operations; • litigation, regulatory actions and compliance issues could subject us to significant fines, penalties, judgments, remediation costs and/or requirements resulting in increased expenses; • as a holding company, our only asset is our interest in OppFi-LLC, and we depend on OppFi-LLC to pay our expenses, and based on our tax structure, we may be required to satisfy our liabilities under the Tax Receivable Agreement, which could be substantial; and • a minority share position may reduce the influence that our non-affiliate stockholders have on our management.
Biggest changeWe also do not currently offer a broad suite of products that bank partners or consumers may find desirable; • if we are unable to manage the risks related to new products and service offerings that we offer, our business, financial condition and results of operations could be adversely affected; • if we are unable to maintain diverse and robust sources of capital to fund loans originated by us on our platform in certain states or fund our purchase of participation rights in the economic interests of loans originated by our bank partners on our platform, then our growth prospects, business, financial condition and results of operations could be adversely affected; • we rely on borrowings under our corporate and warehouse credit facilities to fund certain aspects of our operations, and any inability to meet our obligations as they come due or to comply with various covenants could harm our business; • we have entered into, and may in the future enter into, joint venture or other minority investments that could be adversely affected by our lack of sole decision-making authority, our reliance on the financial condition of our joint venture partners, and other uncertainties outside of our control; • if we fail to establish and maintain proper and effective internal controls over financial reporting, as a public company, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in financial reporting and the trading price of our securities may decline; • it may be difficult and costly to protect our intellectual property rights, and we may not be able to ensure their protection; 19 Table of Contents • if loans originated by us or loans originated by our bank partners and facilitated by our platform are found to violate the laws of one or more states, whether at origination or after sale by the originating bank partner, such loans may be unenforceable or otherwise impaired, and we or other program participants may be subject to, among other things, fines, judgments and penalties, and/or our commercial relationships may suffer, each of which would adversely affect our business, financial condition and results of operations; • if we are unsuccessful in preventing the California Department of Financial Protection and Innovation (“DFPI”) from enforcing the interest rate caps set forth in the California Financing Law, as amended by the Fair Access to Credit Act, a/k/a AB 539 (“CFL”), against loans that are originated by our bank partners on our platform and serviced through our technology and service platform, our bank partners’ ability to originate loans on our platform in California could suffer, which could have a material adverse effect on our business, results of operations and financial condition; • if loans facilitated through our platform for one or more bank partners are subject to successful challenge that the bank partner was not the “true lender,” such loans may be unenforceable, subject to rescission, or otherwise impaired, we or other program participants may be subject to fines, judgments and penalties, and/or our commercial relationships may suffer, each of which would adversely affect our business, financial condition and results of operations; • litigation, regulatory actions and compliance issues could subject us to significant fines, penalties, judgments, remediation costs and/or requirements resulting in increased expenses; • cybersecurity attacks or technology systems failures could disrupt business operations, result in breaches of borrowers’ confidential information that we store and expose us to significant liabilities, reputational damage, loss of customers, and regulatory action; • as a holding company, our only asset is our interest in OppFi-LLC, and we depend on OppFi-LLC to pay our expenses, and based on our tax structure, we may be required to satisfy our liabilities under the Tax Receivable Agreement, which could be substantial; and • a minority share position may reduce the influence that our non-affiliate stockholders have on our management.
These risks and difficulties include our ability to: • improve the effectiveness and predictiveness of our machine learning models; • maintain and increase the volume of loans facilitated by our specialty finance platform; • enter into new and maintain existing bank partnerships; • successfully maintain diverse and robust sources of capital to fund loans originated by us on our platform in certain states or fund our purchase of participation rights in the economic interests of loans originated by our bank partners on our platform; • successfully fund a sufficient quantity of our borrower loan demand with low cost bank funding to help keep interest rates offered to borrowers competitive; • successfully build our brand and protect our reputation from negative publicity; • increase the effectiveness of our marketing strategies, including our direct consumer marketing initiatives; • continue to expand the number of potential borrowers; • successfully adjust our proprietary machine learning models, products and services in a timely manner in response to changing macroeconomic conditions and fluctuations in the credit market; 20 Table of Contents • respond to general economic conditions, including economic slowdowns, inflation, interest rate changes, recessions and tightening of credit markets; • comply with and successfully adapt to complex and evolving regulatory environments; • protect against increasingly sophisticated fraudulent borrowing and online theft; • successfully compete with companies that are currently in, or may in the future enter, the business of providing online lending services to financial institutions or consumer financial services to borrowers; • enter into new markets and introduce new products and services; • effectively secure and maintain the confidentiality of the information received, accessed, stored, provided and used across our systems; • successfully obtain and maintain funding and liquidity to support continued growth and general corporate purposes; • attract, integrate and retain qualified employees; and • effectively manage and expand the capabilities of our operations teams, outsourcing relationships and other business operations.
These risks and difficulties include our ability to: • improve the effectiveness and predictiveness of our machine learning models; • maintain and increase the volume of loans facilitated by our specialty finance platform; • enter into new and maintain existing bank partnerships; • successfully maintain diverse and robust sources of capital to fund loans originated by us on our platform in certain states or fund our purchase of participation rights in the economic interests of loans originated by our bank partners on our platform; • successfully fund a sufficient quantity of our borrower loan demand with low cost bank funding to help keep interest rates offered to borrowers competitive; • successfully build our brand and protect our reputation from negative publicity; • increase the effectiveness of our marketing strategies, including our direct consumer marketing initiatives; • continue to expand the number of potential borrowers; • successfully adjust our proprietary machine learning models, products and services in a timely manner in response to changing macroeconomic conditions and fluctuations in the credit market; • respond to general economic conditions, including economic slowdowns, inflation, interest rate changes, recessions and tightening of credit markets; • comply with and successfully adapt to complex and evolving regulatory environments; • protect against increasingly sophisticated fraudulent borrowing and online theft; 20 Table of Contents • successfully compete with companies that are currently in, or may in the future enter, the business of providing online lending services to financial institutions or consumer financial services to borrowers; • enter into new markets and introduce new products and services; • effectively secure and maintain the confidentiality of the information received, accessed, stored, provided and used across our systems; • successfully obtain and maintain funding and liquidity to support continued growth and general corporate purposes; • attract, integrate and retain qualified employees; and • effectively manage and expand the capabilities of our operations teams, outsourcing relationships and other business operations.
Significant disruptions of our, our bank partners’ and third-party vendors’ and/or other business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and result in the loss, misappropriation, or unauthorized access, use or disclosure of, or the prevention of access to, sensitive information, which could result in financial, legal, regulatory, business and reputational harm to us.
Significant disruptions of our bank partners’ and third-party vendors’ and/or other business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and result in the loss, misappropriation, or unauthorized access, use or disclosure of, or the prevention of access to, sensitive information, which could result in financial, legal, regulatory, business and reputational harm to us.
In addition, as a service provider to banks, we are subject to examination and enforcement authority of the prudential bank regulators that supervise our bank partners under the Bank Service Company Act.
In addition, as a service provider to banks, under the Bank Service Company Act we are subject to examination and enforcement authority of the prudential bank regulators that supervise our bank partners.
In particular, certain laws, regulations and rules we or our bank partners are subject to include: • state lending laws and regulations that require certain parties to hold licenses or other government approvals or filings in connection with specified activities, and impose requirements related to loan disclosures and terms, fees and interest rates, credit discrimination, credit reporting, servicemember relief, debt collection, repossession, unfair or deceptive business practices and consumer protection, as well as other state laws relating to privacy, information security, conduct in connection with data breaches and money transmission; • the Truth-in-Lending Act and Regulation Z promulgated thereunder, and similar state laws, which require certain disclosures to borrowers regarding the terms and conditions of their loans and credit transactions, require creditors to comply with certain lending practice restrictions, limit the ability of a creditor to impose certain loan terms and impose disclosure requirements in connection with credit card origination; • the Equal Credit Opportunity Act and Regulation B promulgated thereunder, and similar state fair lending laws, which prohibit creditors from discouraging or discriminating against credit applicants on the basis of race, color, sex, age, religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program or the fact that the applicant has in good faith exercised any right under the federal Consumer Credit Protection Act; • the Fair Credit Reporting Act and Regulation V promulgated thereunder, imposes certain obligations on users of consumer reports and those that furnish information to consumer reporting agencies, including obligations relating to obtaining consumer reports, using consumer reports, taking adverse action on the basis of information from consumer reports, addressing risks of identity theft and fraud and protecting the privacy and security of consumer reports and consumer report information; • Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive acts or practices in or affecting commerce, and Section 1031 of the Dodd-Frank Act, which prohibits unfair, deceptive or abusive acts or practices in connection with any consumer financial product or service, and analogous state laws prohibiting unfair, deceptive or abusive acts or practices; • the Credit Practices Rule which prohibits lenders from using certain contract provisions that the Federal Trade Commission has found to be unfair to consumers, requires lenders to advise consumers who co-sign obligations about their potential liability if the primary obligor fails to pay and prohibits certain late charges; • the Fair Debt Collection Practices Act and similar state debt collection laws, which provide guidelines and limitations on the conduct of third-party debt collectors (and some limitation on creditors collecting their own debts) in connection with the collection of consumer debts; • the Gramm-Leach-Bliley Act and Regulation P promulgated thereunder, which includes limitations on financial institutions’ disclosure of nonpublic personal information about a consumer to nonaffiliated third parties, in certain circumstances requires financial institutions to limit the use and further disclosure of nonpublic personal information by nonaffiliated third parties to whom they disclose such information and requires financial institutions to disclose certain privacy notices and practices with respect to information sharing with affiliated and unaffiliated entities as well as to safeguard personal borrower information, and other privacy laws and regulations; • state financial privacy laws in California, Vermont and a limited number of other states that require financial institutions to obtain opt-in consent before sharing a consumer’s nonpublic financial information with nonaffilaited third parties; • limited provisions of the California Consumer Privacy Act (CCPA), including provisions enforceable by California’s new privacy agency and its Department of Justice that require specific privacy policy disclosures and give 47 Table of Contents consumers the right to opt out of the sale or sharing of personal information for certain behavioral advertising purposes, and which also includes a private right of action for negligent data breaches, all of which are subject to civil and administrative penalties and statutory damages (for private right of action) assessed on a per-consumer or per-incident basis, in addition to actual damages and injunctive relief; • the Bankruptcy Code, which limits the extent to which creditors may seek to enforce debts against parties who have filed for bankruptcy protection; • the Servicemembers Civil Relief Act, which allows military members to suspend or postpone certain civil obligations, requires creditors to reduce the interest rate to 6% on loans to military members under certain circumstances, and imposes restrictions on enforcement of loans to servicemembers, so that the military member can devote his or her full attention to military duties; • the Military Lending Act, which requires those who lend to “covered borrowers”, including members of the military and their dependents, to only offer Military APRs (a specific measure of all-in-cost-of-credit) under 36%, prohibits arbitration clauses in loan agreements, and prohibits certain other loan agreement terms and lending practices in connection with loans to military servicemembers, among other requirements, and for which violations may result in penalties including voiding of the loan agreement; • the Electronic Fund Transfer Act and Regulation E promulgated thereunder, which provide guidelines and restrictions on the electronic transfer of funds from consumers’ bank accounts, including a prohibition on a creditor requiring a consumer to repay a credit agreement in preauthorized (recurring) electronic fund transfers and disclosure and authorization requirements in connection with such transfers; • the Telephone Consumer Protection Act and the regulations promulgated thereunder, which impose various consumer consent requirements and other restrictions in connection with telemarketing activity and other communication with consumers by phone, fax or text message, and which provide guidelines designed to safeguard consumer privacy in connection with such communications; • the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 and the Telemarketing Sales Rule and analogous state laws, which impose various restrictions on marketing conducted use of email, telephone, fax or text message; • the Electronic Signatures in Global and National Commerce Act and similar state laws, particularly the Uniform Electronic Transactions Act, which authorize the creation of legally binding and enforceable agreements utilizing electronic records and signatures and which require creditors and loan servicers to obtain a consumer’s consent to electronically receive disclosures required under federal and state laws and regulations; • the Right to Financial Privacy Act and similar state laws enacted to provide the financial records of financial institution customers a reasonable amount of privacy from government scrutiny; • the Bank Secrecy Act and the USA PATRIOT Act, which relate to compliance with anti-money laundering, borrower due diligence, transaction monitoring and reporting and record-keeping policies and procedures; • the Executive Orders and regulations promulgated by the Office of Foreign Assets Control under the U.S.
In particular, certain laws, regulations and rules we or our bank partners are subject to include: • state lending laws and regulations that require certain parties to hold licenses or other government approvals or filings in connection with specified activities, and impose requirements related to loan disclosures and terms, fees and interest rates, credit discrimination, credit reporting, servicemember relief, debt collection, repossession, unfair or deceptive business practices and consumer protection, as well as other state laws relating to privacy, information security, conduct in connection with data breaches and money transmission; • the Truth-in-Lending Act and Regulation Z promulgated thereunder, and similar state laws, which require certain disclosures to borrowers regarding the terms and conditions of their loans and credit transactions, require creditors to comply with certain lending practice restrictions, limit the ability of a creditor to impose certain loan terms and impose disclosure requirements in connection with credit card origination; • the Equal Credit Opportunity Act and Regulation B promulgated thereunder, and similar state fair lending laws, which prohibit creditors from discouraging or discriminating against credit applicants on the basis of race, color, sex, age, religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program or the fact that the applicant has in good faith exercised any right under the federal Consumer Credit Protection Act; • the Fair Credit Reporting Act and Regulation V promulgated thereunder, imposes certain obligations on users of consumer reports and those that furnish information to consumer reporting agencies, including obligations relating to obtaining consumer reports, using consumer reports, taking adverse action on the basis of information from consumer reports, addressing risks of identity theft and fraud and protecting the privacy and security of consumer reports and consumer report information; • Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive acts or practices in or affecting commerce, and Section 1031 of the Dodd-Frank Act, which prohibits unfair, deceptive or abusive acts or practices in connection with any consumer financial product or service, and analogous state laws prohibiting unfair, deceptive or abusive acts or practices; 47 Table of Contents • the Credit Practices Rule which prohibits lenders from using certain contract provisions that the Federal Trade Commission has found to be unfair to consumers, requires lenders to advise consumers who co-sign obligations about their potential liability if the primary obligor fails to pay and prohibits certain late charges; • the Fair Debt Collection Practices Act and Regulation F and similar state debt collection laws, which provide guidelines and limitations on the conduct of third-party debt collectors (and some limitation on creditors collecting their own debts) in connection with the collection of consumer debts; • the Gramm-Leach-Bliley Act and Regulation P promulgated thereunder, which includes limitations on financial institutions’ disclosure of nonpublic personal information about a consumer to nonaffiliated third parties, in certain circumstances requires financial institutions to limit the use and further disclosure of nonpublic personal information by nonaffiliated third parties to whom they disclose such information and requires financial institutions to disclose certain privacy notices and practices with respect to information sharing with affiliated and unaffiliated entities as well as to safeguard personal borrower information, and other privacy laws and regulations; • state financial privacy laws in California, Vermont and a limited number of other states that require financial institutions to obtain opt-in consent before sharing a consumer’s nonpublic financial information with nonaffiliated third parties; • limited provisions of the California Consumer Privacy Act (CCPA), including provisions enforceable by California’s new privacy agency and its Department of Justice that require specific privacy policy disclosures and give consumers the right to opt out of the sale or sharing of personal information for certain behavioral advertising purposes, and which also includes a private right of action for negligent data breaches, all of which are subject to civil and administrative penalties and statutory damages (for private right of action) assessed on a per-consumer or per-incident basis, in addition to actual damages and injunctive relief; • the Bankruptcy Code, which limits the extent to which creditors may seek to enforce debts against parties who have filed for bankruptcy protection; • the Servicemembers Civil Relief Act, which allows military members to suspend or postpone certain civil obligations, requires creditors to reduce the interest rate to 6% on loans to military members under certain circumstances, and imposes restrictions on enforcement of loans to servicemembers, so that the military member can devote his or her full attention to military duties; • the Military Lending Act, which requires those who lend to “covered borrowers”, including members of the military and their dependents, to only offer Military APRs (a specific measure of all-in-cost-of-credit) under 36%, prohibits arbitration clauses in loan agreements, and prohibits certain other loan agreement terms and lending practices in connection with loans to military servicemembers, among other requirements, and for which violations may result in penalties including voiding of the loan agreement; • the Electronic Fund Transfer Act and Regulation E promulgated thereunder, which provide guidelines and restrictions on the electronic transfer of funds from consumers’ bank accounts, including a prohibition on a creditor requiring a consumer to repay a credit agreement in preauthorized (recurring) electronic fund transfers and disclosure and authorization requirements in connection with such transfers; • the Telephone Consumer Protection Act and the regulations promulgated thereunder, which impose various consumer consent requirements and other restrictions in connection with telemarketing activity and other communication with consumers by phone, fax or text message, and which provide guidelines designed to safeguard consumer privacy in connection with such communications; • the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 and the Telemarketing Sales Rule and analogous state laws, which impose various restrictions on marketing conducted use of email, telephone, fax or text message; • the Electronic Signatures in Global and National Commerce Act and similar state laws, particularly the Uniform Electronic Transactions Act, which authorize the creation of legally binding and enforceable agreements utilizing electronic records and signatures and which require creditors and loan servicers to obtain a consumer’s consent to electronically receive disclosures required under federal and state laws and regulations; • the Right to Financial Privacy Act and similar state laws enacted to provide the financial records of financial institution customers a reasonable amount of privacy from government scrutiny; • the Bank Secrecy Act and the USA PATRIOT Act, which relate to compliance with anti-money laundering, borrower due diligence, transaction monitoring and reporting and record-keeping policies and procedures; 48 Table of Contents • the Executive Orders and regulations promulgated by the Office of Foreign Assets Control under the U.S.
The risks we face in connection with acquisitions include: 33 Table of Contents • diversion of management time and focus from operating our business to addressing acquisition integration challenges; • utilization of our financial resources for acquisitions or investments that may fail to realize the anticipated benefits; • inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; • coordination of technology, product development and sales and marketing functions and integration of administrative systems; • transition of the acquired company’s borrowers to our systems; • retention of employees from the acquired company; • regulatory risks, including maintaining good standing with existing regulatory bodies or receiving any necessary approvals, as well as being subject to new regulators with oversight over an acquired business; • attracting financing; • cultural challenges associated with integrating employees from the acquired company into our organization; • the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies; • potential write-offs of loans or intangibles or other assets acquired in such transactions that may have an adverse effect on our results of operations in a given period; • liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; • assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property or increase our risk for liability; and • litigation, regulatory criticisms, customer claims or other liabilities in connection with the acquired company.
The risks we face in connection with acquisitions include: • diversion of management time and focus from operating our business to addressing acquisition integration challenges; • utilization of our financial resources for acquisitions or investments that may fail to realize the anticipated benefits; • inability of the acquired technologies, products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits; • coordination of technology, product development and sales and marketing functions and integration of administrative systems; • transition of the acquired company’s borrowers to our systems; • retention of employees from the acquired company; • regulatory risks, including maintaining good standing with existing regulatory bodies or receiving any necessary approvals, as well as being subject to new regulators with oversight over an acquired business; • attracting financing; • cultural challenges associated with integrating employees from the acquired company into our organization; • the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies; • potential write-offs of loans or intangibles or other assets acquired in such transactions that may have an adverse effect on our results of operations in a given period; • liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; 34 Table of Contents • assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property or increase our risk for liability; and • litigation, regulatory criticisms, customer claims or other liabilities in connection with the acquired company.
If loans originated by us or loans originated by our bank partners were found to violate the laws of one or more states, whether at origination or after sale of participation rights by the originating bank partner, loans facilitated through our platform may be unenforceable or otherwise impaired, we or other program participants may be subject to, among other things, fines, judgments and penalties, and/or our commercial relationships may suffer, each of which would adversely affect our business and results of operations.
If loans originated by our bank partners were found to violate the laws of one or more states, whether at origination or after sale of participation rights by the originating bank partner, loans facilitated through our platform may be unenforceable or otherwise impaired, we or other program participants may be subject to, among other things, fines, judgments and penalties, and/or our commercial relationships may suffer, each of which would adversely affect our business and results of operations.
These provisions provide, among other things, that the Company shall not engage in any business combination (as such term is defined in the Charter), at any point in time at which the Class A Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, with any interested stockholder (which, as defined in the Charter, shall not include SCG or any of its affiliates, or any person that acquires (other than in a registered public offering) directly from SCG or any of its successors, any “group”, or any member of any such group, of which such persons are a member of under Rule 13d-5 of the Exchange Act beneficial ownership of fifteen percent (15%) or more of the then outstanding voting stock of the Company) for a period of three years following the time that such stockholder became an interested stockholder, unless: (i) prior to such time, the Board approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; or (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the Company outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (A) persons who are directors and also officers of the Company and (B) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; (iii) at or subsequent to such time, the applicable business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock of the Company that is not owned by the interested stockholder; or (iv) the stockholder became an interested stockholder inadvertently and (A) as soon as practicable divested itself of ownership of sufficient shares so that the stockholder ceased to be an interested stockholder and (B) was not, at any time within the three-year period immediately prior to a business combination between the Company and such stockholder, an interested stockholder but for the inadvertent acquisition of ownership, which provision of the Charter may 61 Table of Contents only be amended by the affirmative vote of at least 66 2/3% of all then outstanding shares of Class A Common Stock of the Company.
These provisions provide, among other things, that the Company shall not engage in any business combination (as such term is defined in the Charter), at any point in time at which the Class A Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, with any interested stockholder (which, as defined in the Charter, shall not include SCG or any of its affiliates, or any person that acquires (other than in a registered public offering) directly from SCG or any of its successors, any “group”, or any member of any such group, of which such persons are a member of under Rule 13d-5 of the Exchange Act beneficial ownership of fifteen percent (15%) or more of the then outstanding voting stock of the Company) for a period of three years following the time that such stockholder became an interested stockholder, unless: (i) prior to such time, the Board approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; or (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the Company outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by (A) persons who are directors and also officers of the Company and (B) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; (iii) at or subsequent to such time, the applicable business combination is approved by the Board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock of the Company that is not owned by the interested stockholder; or (iv) the stockholder became an interested stockholder inadvertently and (A) as soon as practicable divested itself of ownership of sufficient shares so that the stockholder ceased to be an interested stockholder and (B) was not, at any time within the three-year period immediately prior to a business combination between the Company and such stockholder, an interested stockholder but for the inadvertent acquisition of ownership, which provision of the Charter may only be amended by the affirmative vote of at least 66 2/3% of all then outstanding shares of Class A Common Stock of the Company.
If we were subject to such litigation or enforcement, then any unfavorable results of pending or future legal proceedings may result in contractual damages, usury related claims, fines, penalties, injunctions, the unenforceability, rescission or other impairment of loans originated on our platform or other censure that could have an adverse effect on our business, results of operations and financial condition.
If we were subject to such litigation or enforcement, then any unfavorable results of pending or future legal proceedings may result in contractual damages, usury related claims, fines, penalties, injunctions, the unenforceability, rescission, modification, or other impairment of loans originated on our platform or other censure that could have an adverse effect on our business, results of operations and financial condition.
As a result of the material weakness identified in our financial reporting, the restatement of certain of our financial statements, the change in accounting for our diluted earnings per share, and other matters, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement of our financial statements, material weaknesses in our internal control over financial reporting, and the preparation of our financial statements.
As a result of the material weakness previously identified in our financial reporting, the restatement of certain of our financial statements, the change in accounting for our diluted earnings per share, and other matters, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement of our financial statements, material weaknesses in our internal control over financial reporting, and the preparation of our financial statements.
No assurance is given that our programs and controls will be effective to ensure compliance with all applicable anti-money laundering and anti-terrorism financing and anti-corruption laws and regulations, and our failure to comply with these laws and regulations could subject us to significant sanctions, fines, penalties, contractual liability to our bank partners or institutional investors, and reputational harm, all of which could harm our business.
No assurance is given that our programs and controls will be effective to ensure compliance with all applicable anti-money laundering and anti-terrorism financing, economic sanctions, and anti-corruption laws and regulations, and our failure to comply with these laws and regulations could subject us to significant sanctions, fines, penalties, contractual liability to our bank partners or institutional investors, and reputational harm, all of which could harm our business.
These international activities are subject to inherent risks that are beyond our control, including: • risks related to government regulation or required compliance with local laws; • local licensing and reporting obligations; 45 Table of Contents • difficulties in developing, staffing and simultaneously managing a number of varying foreign operations as a result of distance, language and cultural differences; • different, uncertain, overlapping or more stringent local laws and regulations; • political and economic instability, tensions, security risks and changes in international diplomatic and trade relations; • state or federal regulations that restrict offshoring of business operational functions or require offshore partners to obtain additional licenses, registrations or permits to perform services on our behalf; • geopolitical events, including natural disasters, public health issues, epidemics or pandemics, acts of war, and terrorism; • the impact of, and response of local governments to, the COVID-19 pandemic; • compliance with applicable U.S. laws and foreign laws related to consumer protection, intellectual property, privacy, data security, corruption, money laundering, and export/trade control; • misconduct by our outsourcing partners and their employees or even unsubstantiated allegations of misconduct; • risks due to lack of direct involvement in hiring and retaining personnel; and • potentially adverse tax developments and consequences.
These international activities are subject to inherent risks that are beyond our control, including: • risks related to government regulation or required compliance with local laws; • local licensing and reporting obligations; • difficulties in developing, staffing and simultaneously managing a number of varying foreign operations as a result of distance, language and cultural differences; • different, uncertain, overlapping or more stringent local laws and regulations; • political and economic instability, tensions, security risks and changes in international diplomatic and trade relations; • state or federal regulations that restrict offshoring of business operational functions or require offshore partners to obtain additional licenses, registrations or permits to perform services on our behalf; • geopolitical events, including natural disasters, public health issues, epidemics or pandemics, acts of war, and terrorism; • the impact of, and response of local governments to, the COVID-19 pandemic; • compliance with applicable U.S. laws and foreign laws related to consumer protection, intellectual property, privacy, data security, corruption, money laundering, and export/trade control; • misconduct by our outsourcing partners and their employees or even unsubstantiated allegations of misconduct; • risks due to lack of direct involvement in hiring and retaining personnel; and • potentially adverse tax developments and consequences.
Decreased demand for loans as a result of increased savings or income could result in a loss of revenues or decline in profitability if we are unable to successfully adapt to such changes.
Decreased demand for loans, including as a result of increased savings or income, could result in a loss of revenues or decline in profitability if we are unable to successfully adapt to such changes.
At a special meeting of the stockholders of the Company held on July 16, 2021 (the “Special Meeting”), a majority of the then-outstanding shares of the Company’s Class A Common Stock and Class B Common Stock, voting together as a single class, voted to approve the Company’s Second Amended and Restated Certificate of Incorporation, which, among other things, increased the authorized capital stock from 401,000,000 shares, consisting of 380,000,000 shares of Class A Common Stock, 20,000,000 shares of Class B Common Stock and 1,000,000 shares of preferred stock, par value $0.0001 per share, to 501,000,000 shares, consisting of 500,000,000 shares of common stock, including (i) 379,000,000 shares of Class A Common Stock, (ii) 6,000,000 shares of Class B Common Stock, and (iii) 115,000,000 shares of Class V Voting Stock and 1,000,000 shares of preferred stock by creating an additional 100,000,000 shares of common stock (the “Capitalization Amendment”).
At a special meeting of the stockholders of the Company held on July 16, 2021 (the “Special Meeting”), a majority of the then-outstanding shares of the Company’s Class A Common Stock and Class B Common Stock, voting together as a single class, voted to approve the Company’s Second Amended and Restated Certificate of 60 Table of Contents Incorporation, which, among other things, increased the authorized capital stock from 401,000,000 shares, consisting of 380,000,000 shares of Class A Common Stock, 20,000,000 shares of Class B Common Stock and 1,000,000 shares of preferred stock, par value $0.0001 per share, to 501,000,000 shares, consisting of 500,000,000 shares of common stock, including (i) 379,000,000 shares of Class A Common Stock, (ii) 6,000,000 shares of Class B Common Stock, and (iii) 115,000,000 shares of Class V Voting Stock and 1,000,000 shares of preferred stock by creating an additional 100,000,000 shares of common stock (the “Capitalization Amendment”).
While we do not anticipate any material changes to our business model as a result of the repeal of the OCC’s “true lender” rule because (i) the banks with whom we partner are state chartered, FDIC regulated banks and are the lenders under such loans, and (ii) the repeal of the OCC’s “true lender” rule does not have direct implications on the rules finalized by the OCC and FDIC last year around the continued validity of the “valid when made doctrine,” we cannot be certain that the repeal of such rule, or the restrictions on the OCC implementing a similar rule without statutory approval, will not have a material effect on our business or our industry.
While we do not anticipate any material changes to our business model as a result of the repeal of the OCC’s “true 44 Table of Contents lender” rule because (i) the banks with whom we partner are state chartered, FDIC regulated banks and are the lenders under such loans, and (ii) the repeal of the OCC’s “true lender” rule does not have direct implications on the rules finalized by the OCC and FDIC last year around the continued validity of the “valid when made doctrine,” we cannot be certain that the repeal of such rule, or the restrictions on the OCC implementing a similar rule without statutory approval, will not have a material effect on our business or our industry.
We have addressed these inquiries directly and engaged in open dialogue with regulators. For example, the CFPB has issued a civil investigative demand, or CID, to us, as a result of a consumer complaint, the stated purpose of which is to determine whether our lending practices violated any consumer financial laws with respect to the Military Lending Act.
We have addressed these inquiries directly and engaged in open dialogue with regulators. For example, the CFPB previously issued a civil investigative demand, or CID, to us, as a result of a consumer complaint, the stated purpose of which is to determine whether our lending practices violated any consumer financial laws with respect to the Military Lending Act.
The demand for the loan products facilitated on our platform in the markets we serve could decline due to a variety of factors, such as regulatory restrictions that reduce borrower access to particular products, the availability of competing or alternative products, or changes in borrowers’ financial conditions, particularly increases in income or savings, such as recent government stimulus programs.
The demand for the loan products facilitated on our platform in the markets we serve could decline due to a variety of factors, such as regulatory restrictions that reduce borrower access to particular products, the availability of competing or alternative products, increases in interest rates, or changes in borrowers’ financial conditions, particularly increases in income or savings, such as recent government stimulus programs.
If a court or a state or federal enforcement agency were to determine that we, rather than our bank partners, are the “true lender” for loans originated on our platform by our bank partners, and if for this reason (or any other reason) the loans were deemed subject to and in violation of certain state consumer finance 44 Table of Contents laws, we could be subject to fines, damages, injunctive relief (including required modification or discontinuation of our business in certain areas) and other penalties or consequences, and the loans could be rendered void or unenforceable in whole or in part, any of which could have a material adverse effect on our business.
If a court or a state or federal enforcement agency were to determine that we, rather than our bank partners, are the “true lender” for loans originated on our platform by our bank partners, and if for this reason (or any other reason) the loans were deemed subject to and in violation of certain state consumer finance laws, we could be subject to fines, damages, injunctive relief (including required modification or discontinuation of our business in certain areas) and other penalties or consequences, and the loans could be rendered void or unenforceable in whole or in part, any of which could have a material adverse effect on our business.
There is no guarantee that the Warrants will ever be in the money prior to their expiration, and as such, the Warrants may expire worthless.
There is no guarantee that the Warrants will be in the money prior to their expiration, and as such, the Warrants may expire worthless.
As such, the SCG Holders and their affiliates will have significant influence over the election of the members of our Board and thereby may significantly influence our policies and operations, including the appointment of management, future issuances of our Class A Common Stock or other securities, the payment of dividends, if any, the incurrence or modification of debt, amendments to our certificate of incorporation and bylaws, and the entering into of extraordinary transactions, and the SCG Holders’ interests may not in all cases be aligned with those of other stockholders.
As such, the SCG Holders and their affiliates will have significant influence over the election of the members of our Board and thereby may significantly influence our policies and operations, including the appointment of management, future issuances of our Class A Common Stock or other securities, the payment of dividends, if any, the incurrence or modification of 61 Table of Contents debt, amendments to our certificate of incorporation and bylaws, and the entering into of extraordinary transactions, and the SCG Holders’ interests may not in all cases be aligned with those of other stockholders.
In connection with the Business Combination, the Members were deemed for U.S. federal (and applicable state and local) income tax purposes to have sold to us OppFi-LLC Units and may in the future exchange their OppFi-LLC Units, together with the cancelation of an equal number of shares of Class V Voting Stock, for shares of our Class A Common Stock (or cash) pursuant to the OppFi-LLC A&R LLCA, subject to certain conditions and transfer restrictions as set forth therein and in the Investor Rights Agreement.
In connection with the Business Combination, the Members were deemed for U.S. federal (and applicable state and local) income tax purposes to have sold to us OppFi-LLC Units and may in the future exchange their OppFi-LLC Units, together with the cancelation of an equal number of shares of Class V Voting Stock, for shares of our Class A Common Stock (or cash) pursuant to the OppFi-LLC A&R LLCA, subject to certain conditions and transfer restrictions as set forth therein and 64 Table of Contents in the Investor Rights Agreement.
In addition, any security compromise in our industry, whether actual or perceived, or information technology system disruptions, whether from attacks on our technology environment or from computer malware, natural disasters, terrorism, war and telecommunication and electrical failures, could interrupt our business or operations, harm our reputation, erode borrower 30 Table of Contents confidence, negatively affect our ability to attract new borrowers, or subject us to third-party lawsuits, regulatory fines or other action or liability, which could adversely affect our business and results of operations.
In addition, any security compromise in our industry, whether actual or perceived, or information technology system disruptions, whether from attacks on our technology environment or from computer malware, natural disasters, terrorism, war and telecommunication and electrical failures, could interrupt our business or operations, harm our reputation, erode borrower confidence, negatively affect our ability to attract new borrowers, or subject us to third-party lawsuits, regulatory fines or other action or liability, which could adversely affect our business and results of operations.
While all information technology operations are inherently vulnerable to inadvertent or intentional security breaches, incidents, attacks and exposures, the size, complexity, accessibility and distributed nature of our information technology systems, and the large amounts of sensitive information stored on those systems, make such systems potentially vulnerable to unintentional or malicious, internal and external attacks.
While all information technology operations are inherently vulnerable to inadvertent or intentional cybersecurity breaches, incidents, attacks and exposures, the size, complexity, accessibility and distributed nature of our information technology systems, and the large amounts of sensitive information stored on those systems, make such systems potentially vulnerable to unintentional or malicious, internal and external attacks.
The fair values of our finance receivables are determined using discounted cash flow analyses that factor in estimated losses and prepayments over the estimated duration of the underlying assets. Loss and prepayment assumptions are determined using historical loss data and include appropriate consideration of recent trends and anticipated future performance.
Th e fair values of our finance receivables are determined using discounted cash flow analyses that factor in estimated losses and prepayments over the estimated duration of the underlying assets. Loss and prepayment assumptions are determined using historical loss data and include appropriate consideration of recent trends and anticipated future performance.
In addition, a number of participants in the consumer financial services industry, ourselves included, have been the subject of putative class action lawsuits, state attorney general actions and other state regulatory enforcement actions and federal regulatory enforcement actions, including actions relating to alleged unfair, deceptive or abusive acts or practices, violations of state licensing and lending laws, including state usury and disclosure laws and allegations of noncompliance with various state and federal laws and regulations relating to originating, servicing and collecting consumer finance loans and other consumer financial services and products.
In addition, a number of participants in the consumer financial services industry, ourselves included, have been the subject of putative class action lawsuits, state attorney general actions and other state regulatory enforcement actions and federal regulatory enforcement actions, including actions relating to alleged unfair, deceptive or abusive acts or practices, violations of state licensing and lending laws, including state usury and disclosure laws and allegations of noncompliance with various state and federal laws and regulations relating to originating, servicing and collecting consumer finance loans and other 46 Table of Contents consumer financial services and products.
As of December 31, 2023, more than 5% of our finance receivables portfolio was related to loans originated in the State of California, and if we become subject to the CFL interest rate cap of 36%, our bank partners’ ability to originate Program Loans in California could suffer.
As of December 31, 2024, more than 5% of our finance receivables portfolio was related to loans originated in the State of California, and if we become subject to the CFL interest rate cap of 36%, our bank partners’ ability to originate Program Loans in California could suffer.
Other states and jurisdictions are considering similar legislation. If other states or jurisdictions adopt similar legislation, it may limit the interest rates that could be charged on new loans made in such states by state chartered banks that originate loans on our platform and may restrict the number of loans that could be funded through our platform.
If other states or jurisdictions adopt similar legislation, it may limit the interest rates that could be charged on new loans made in such states by state chartered banks that originate loans on our platform and may restrict the number of loans that could be funded through our platform.
Midland Funding, LLC , 786 F.3d 246 (2d Cir. 2015), cert. denied, 136 S.Ct. 2505 (June 27, 2016), for example, the United States Court of Appeals for the Second Circuit held that the non-bank purchaser of defaulted credit card 42 Table of Contents debt could not rely on preemption standards under the National Bank Act applicable to the originator of such debt in defense of usury claims.
Midland Funding, LLC , 786 F.3d 246 (2d Cir. 2015), cert. denied, 136 S.Ct. 2505 (June 27, 2016), for example, the United States Court of Appeals for the Second Circuit held that the non-bank purchaser of defaulted credit card debt could not rely on preemption standards under the National Bank Act applicable to the originator of such debt in defense of usury claims.
Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: • changes in the valuation of our deferred tax assets and liabilities; • expected timing and amount of the release of any tax valuation allowances; • tax effects of stock-based compensation; • costs related to intercompany restructurings; • changes in tax laws, regulations or interpretations thereof; and • lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.
Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including: • changes in the valuation of our deferred tax assets and liabilities; • expected timing and amount of the release of any tax valuation allowances; • tax effects of stock-based compensation; • costs related to intercompany restructurings; 58 Table of Contents • changes in tax laws, regulations or interpretations thereof; and • lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.
For example, during periods of increased delinquencies caused by economic downturns or otherwise, it is important that our servicing personnel are proactive and consistent in contacting a borrower to bring a delinquent balance current and ultimately avoid the related loan becoming charged off, which in turn makes it extremely important that the servicing personnel are properly staffed and trained to take prompt and appropriate action.
For example, 31 Table of Contents during periods of increased delinquencies caused by economic downturns or otherwise, it is important that our servicing personnel are proactive and consistent in contacting a borrower to bring a delinquent balance current and ultimately avoid the related loan becoming charged off, which in turn makes it extremely important that the servicing personnel are properly staffed and trained to take prompt and appropriate action.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in 36 Table of Contents our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline, and we could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline, and we could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities.
Search engines may also implement policies that restrict the ability of companies such as us to advertise their services and products, which could prevent us from appearing in a favorable location or any location in the organic rankings or paid search results when certain search terms are used by the consumer. 32 Table of Contents Our brand promotion activities may not yield increased revenues.
Search engines may also implement policies that restrict the ability of companies such as us to advertise their services and products, which could prevent us from appearing in a favorable location or any location in the organic rankings or paid search results when certain search terms are used by the consumer. Our brand promotion activities may not yield increased revenues.
If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to develop our platform containing that technology could be severely limited and our business could be harmed.
If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims 41 Table of Contents brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to develop our platform containing that technology could be severely limited and our business could be harmed.
In addition, non-compliance could subject us to civil penalties, damages, revocation of required licenses, class action lawsuits, administrative enforcement actions and civil and criminal liability, all of which would harm our business. Internet-based loan origination processes may give rise to greater risks than paper-based processes and may not always be allowed under state law.
In addition, non-compliance could subject us to civil penalties, damages, revocation of required licenses, class action lawsuits, administrative enforcement actions and civil and criminal liability, all of which would harm our business. 49 Table of Contents Internet-based loan origination processes may give rise to greater risks than paper-based processes and may not always be allowed under state law.
Our ability to realize, and benefit from, these tax 65 Table of Contents savings depends on a number of assumptions, including that we will earn sufficient taxable income each year during the period over which the deductions arising from any such basis increases and payments are available and that there are no adverse changes in applicable law or regulations.
Our ability to realize, and benefit from, these tax savings depends on a number of assumptions, including that we will earn sufficient taxable income each year during the period over which the deductions arising from any such basis increases and payments are available and that there are no adverse changes in applicable law or regulations.
In particular, specialty finance programs that involve originations by a bank in reliance on origination-related services being provided by specialty finance platforms and/or program managers are subject to potential litigation and government enforcement claims based on “rent-a-charter” or “true lender” theories, particularly where such programs involve the subsequent sale of such loans or interests therein to the platform.
In particular, specialty finance programs that involve originations by a bank in reliance on origination-related services being provided by specialty finance platforms and/or program managers are subject to potential litigation and government 33 Table of Contents enforcement claims based on “rent-a-charter” or “true lender” theories, particularly where such programs involve the subsequent sale of such loans or interests therein to the platform.
If portions of our proprietary models are determined to be subject to an open source license, or if the license terms for the open source software that we incorporate change, we could be required to publicly release the affected portions of our source code, re-engineer all or a portion of our model or change our business activities, any of which could negatively affect our business operations and potentially our intellectual property rights.
If portions of our proprietary models are determined to be subject to an open source license, or if the license terms for the open source software that we incorporate change, we could be required to publicly release the 39 Table of Contents affected portions of our source code, re-engineer all or a portion of our model or change our business activities, any of which could negatively affect our business operations and potentially our intellectual property rights.
To the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid; however, nonpayment for a 63 Table of Contents specified period and/or under certain circumstances may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement, as further described below.
To the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid; however, nonpayment for a specified period and/or under certain circumstances may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore accelerate payments due under the Tax Receivable Agreement, as further described below.
Some of the risks we face include: • we are a rapidly growing company with a relatively limited operating history, which may result in increased risks, uncertainties, expenses and difficulties, and makes it difficult to evaluate our future prospects; • our revenue growth rate and financial performance in recent periods may not be indicative of future performance and such growth may slow over time; • if we fail to effectively manage our growth, our business, financial condition and results of operations could be adversely affected; • we may not be able to maintain or increase our profitability in the future; • we may experience fluctuations in our quarterly operating results; • if we are unable to continue to improve our machine learning models or if these models contain errors or are otherwise ineffective, our growth prospects, business, financial condition and results of operations could be adversely affected; • if our bank partners were to cease or limit operations with us or if we are unable to attract and onboard new bank partners, our business, financial condition and results of operations could be adversely affected; • our sales and onboarding process of new bank partners could take longer than expected, leading to fluctuations or variability in expected revenues and results of operations; • our business may be adversely affected by economic conditions and other factors that we cannot control; • decreased demand for loans as a result of increased savings or income could result in a loss of revenues or decline in profitability if we are unable to successfully adapt to such changes; • our models have not yet been extensively tested during down-cycle economic conditions.
Some of the risks we face include: • we are a rapidly growing company with a relatively limited operating history, which may result in increased risks, uncertainties, expenses and difficulties, and makes it difficult to evaluate our future prospects; • our revenue growth rate and financial performance in recent periods may not be indicative of future performance and such growth may slow over time; • if we fail to effectively manage our growth, our business, financial condition and results of operations could be adversely affected; • if we are unable to continue to improve our machine learning models or if these models contain errors or are otherwise ineffective, our growth prospects, business, financial condition and results of operations could be adversely affected; • if our bank partners were to cease or limit operations with us or if we are unable to attract and onboard new bank partners, our business, financial condition and results of operations could be adversely affected; • our sales and onboarding process of new bank partners could take longer than expected, leading to fluctuations or variability in expected revenues and results of operations; • our business may be adversely affected by economic conditions and other factors that we cannot control; • decreased demand for loans as a result of increased savings or income or as a result of higher interest rates could result in a loss of revenues or decline in profitability if we are unable to successfully adapt to such changes; • our models have not yet been extensively tested during down-cycle economic conditions.
We intend to continue to expend significant funds to continue to develop and improve our proprietary machine learning models, improve our marketing efforts to increase the number of borrowers on our platform, enhance the features and overall user experience of our platform, expand the types of loan offerings on our platform and otherwise continue to grow our business, and we may not be able to increase our revenue enough to offset these significant expenditures.
We intend to continue to expend significant 21 Table of Contents funds to continue to develop and improve our proprietary machine learning models, improve our marketing efforts to increase the number of borrowers on our platform, enhance the features and overall user experience of our platform, expand the types of loan offerings on our platform and otherwise continue to grow our business, and we may not be able to increase our revenue enough to offset these significant expenditures.
Moreover, data security incidents and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above. There can be no assurance that our security measures intended to protect our information technology systems and infrastructure will successfully prevent service interruptions or security incidents.
Moreover, data security incidents and other inappropriate access can be difficult to detect, and any delay in identifying them 30 Table of Contents may lead to increased harm of the type described above. There can be no assurance that our security measures intended to protect our information technology systems and infrastructure will successfully prevent service interruptions or security incidents.
So long as Schwartz Capital Group, LTHS Capital Group, or TGS Capital Group (f/k/a Todd Schwartz Capital Group), and any of their respective permitted transferees (collectively, the “SCG Holders”) and their affiliates maintain holdings of more than 50% of the voting power of our capital stock, we will be a “controlled company” within the meaning of NYSE 59 Table of Contents corporate governance standards.
So long as Schwartz Capital Group, LTHS Capital Group, or TGS Capital Group (f/k/a Todd Schwartz Capital Group), and any of their respective permitted transferees (collectively, the “SCG Holders”) and their affiliates maintain holdings of more than 50% of the voting power of our capital stock, we will be a “controlled company” within the meaning of NYSE corporate governance standards.
This is particularly true with respect to the application of ECOA and Regulation B to credit risk models that rely upon alternative variables and machine learning, an area of law where regulatory guidance is currently uncertain and still evolving, and for which there are not well-established regulatory norms for establishing compliance.
This is particularly true with respect to the application of ECOA and Regulation B to credit risk models that rely 50 Table of Contents upon alternative variables and machine learning, an area of law where regulatory guidance is currently uncertain and still evolving, and for which there are not well-established regulatory norms for establishing compliance.
Our management and other personnel will need to devote a substantial amount of time to compliance initiatives applicable to public companies, including compliance with Section 404 and the evaluation of the effectiveness of our internal controls over financial reporting within the prescribed timeframe, as well as the remediation of the material weakness that we have identified.
Our management and other personnel will need to devote a substantial amount of time to compliance initiatives applicable to public companies, including compliance with Section 404 and the evaluation of the effectiveness of our internal 36 Table of Contents controls over financial reporting within the prescribed timeframe, as well as the remediation of the material weakness that we have identified.
In addition, our information security team and third-party consultants regularly assesses our cybersecurity risks and mitigation efforts. Cyberattacks can also result in financial and reputational risk. Reputational risk is the risk arising from possible negative perceptions of us, whether true or not, among our current and prospective members, counterparties, employees, and regulators.
In addition, our information security team and third-party consultants regularly assesses our cybersecurity risks and mitigation efforts. Cyberattacks can also result in financial and reputational risk. 37 Table of Contents Reputational risk is the risk arising from possible negative perceptions of us, whether true or not, among our current and prospective members, counterparties, employees, and regulators.
It is possible that in 51 Table of Contents the coming years ahead, new laws and regulations will be adopted in the United States, or existing laws and regulations may be interpreted in new ways, both of which could affect the operation of our platform and the way in which we use machine learning technology, including with respect to fair lending laws.
It is possible that in the coming years ahead, new laws and regulations will be adopted in the United States, or existing laws and regulations may be interpreted in new ways, both of which could affect the operation of our platform and the way in which we use machine learning technology, including with respect to fair lending laws.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our Common Stock held by non-affiliates exceeds $250 million as of the prior June 30th, and (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our Common Stock held by non-affiliates exceeds $700 million as of the prior June 30th.
We will remain a smaller reporting company until the last day of the fiscal year in which 63 Table of Contents (1) the market value of our Common Stock held by non-affiliates exceeds $250 million as of the prior June 30th, and (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our Common Stock held by non-affiliates exceeds $700 million as of the prior June 30th.
If we are unable to compete with such companies or fail to meet the need for innovation in our industry, the use of our platform could stagnate or substantially decline, or our loan products could fail to maintain or achieve more widespread market acceptance, which could harm our business, results of operations and financial condition.
If we are unable to compete with such companies or fail to meet the need for innovation in our industry, the use of our platform could stagnate or substantially decline, 28 Table of Contents or our loan products could fail to maintain or achieve more widespread market acceptance, which could harm our business, results of operations and financial condition.
Data from national credit bureaus and other consumer reporting agencies and other information that we receive from third parties about an applicant or borrower may be inaccurate or 40 Table of Contents may not accurately reflect the applicant or borrower’s creditworthiness for a variety of reasons, including inaccurate reporting by creditors to the credit bureaus, errors, staleness or incompleteness.
Data from national credit bureaus and other consumer reporting agencies and other information that we receive from third parties about an applicant or borrower may be inaccurate or may not accurately reflect the applicant or borrower’s creditworthiness for a variety of reasons, including inaccurate reporting by creditors to the credit bureaus, errors, staleness or incompleteness.
Our quarterly operating results may fluctuate significantly because of several factors, including: • profitability of our products, especially in new markets and due to seasonal fluctuations; • changes in interest rates; 58 Table of Contents • impairment of assets; • macroeconomic conditions, including inflation and interest rate changes, both nationally and locally; • negative publicity relating to our products; • changes in consumer preferences and competitive conditions; and • expansion to new markets.
Our quarterly operating results may fluctuate significantly because of several factors, including: • profitability of our products, especially in new markets and due to seasonal fluctuations; • changes in interest rates; • impairment of assets; • macroeconomic conditions, including inflation and interest rate changes, both nationally and locally; • negative publicity relating to our products; • changes in consumer preferences and competitive conditions; and • expansion to new markets.
For example, the earlier disposition of assets following an exchange or acquisition transaction will generally accelerate payments under the Tax Receivable Agreement and increase the present value of such payments, and the disposition of assets before an exchange or acquisition transaction will increase an existing owner’s tax liability without giving rise to any rights of holders of Retained OppFi-LLC Units to receive payments under the Tax Receivable Agreement.
For example, the earlier disposition of assets following an exchange or acquisition transaction will generally accelerate payments under the Tax Receivable Agreement and increase the present value of such payments, and the disposition of assets before an exchange or acquisition transaction will 66 Table of Contents increase an existing owner’s tax liability without giving rise to any rights of holders of Retained OppFi-LLC Units to receive payments under the Tax Receivable Agreement.
You should consider carefully the risks and uncertainties described below, together with all of the other information in this Annual Report, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes to the financial statements included herein, before deciding whether to purchase our securities.
You should consider carefully the risks and uncertainties described below, together with all of the other information in this Annual Report, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes to the financial statements 18 Table of Contents included herein, before deciding whether to purchase our securities.
The payments under the Tax Receivable Agreement are not conditioned upon continued ownership of the Company by the holders of units. 64 Table of Contents The Members will not be required to reimburse us for any excess payments that may previously have been made under the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities.
The payments under the Tax Receivable Agreement are not conditioned upon continued ownership of the Company by the holders of units. The Members will not be required to reimburse us for any excess payments that may previously have been made under the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities.
Accordingly, we are required to pay U.S. federal income taxes on our allocable share of the net taxable income of OppFi-LLC. Under the terms of the OppFi-LLC A&R LLCA, OppFi-LLC is obligated to 62 Table of Contents make tax distributions to holders of OppFi-LLC Units (including us) calculated at certain assumed rates.
Accordingly, we are required to pay U.S. federal income taxes on our allocable share of the net taxable income of OppFi-LLC. Under the terms of the OppFi-LLC A&R LLCA, OppFi-LLC is obligated to make tax distributions to holders of OppFi-LLC Units (including us) calculated at certain assumed rates.
Continued growth could strain our ability to develop and improve our operational, technological, financial and management controls, enhance our reporting systems and procedures, 21 Table of Contents recruit, train and retain highly skilled personnel and maintain user satisfaction. Any of the foregoing factors could negatively affect our business, financial condition and results of operations.
Continued growth could strain our ability to develop and improve our operational, technological, financial and management controls, enhance our reporting systems and procedures, recruit, train and retain highly skilled personnel and maintain user satisfaction. Any of the foregoing factors could negatively affect our business, financial condition and results of operations.
We do not expect a materially adverse change to our financial condition or liquidity as a result of any such changes or any other reforms to LIBOR that may be enacted in the United States, the United Kingdom or elsewhere. Changes in interest rates could adversely affect our performance.
We do not expect a materially adverse change to our financial condition or liquidity as a result of any such changes or any other reforms to LIBOR that may be enacted in the United States, the United Kingdom or elsewhere. 55 Table of Contents Changes in interest rates could adversely affect our performance.
Our models rely on a wide variety of data sources, including data collected from applicants and borrowers, credit bureau data and our credit experience gained through monitoring the payment performance of borrowers over time. Under our agreements with our bank partners, we receive licenses to use data collected from loan applicants and borrowers.
Our models rely on a wide variety of data sources, including data collected from applicants and borrowers, credit bureau data and our credit 40 Table of Contents experience gained through monitoring the payment performance of borrowers over time. Under our agreements with our bank partners, we receive licenses to use data collected from loan applicants and borrowers.
Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
Although the states are preempted from regulating the 56 Table of Contents sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
If our personnel, systems or data centers are impacted, we may suffer 34 Table of Contents interruptions and delays in our business operations. In addition, to the extent these events impact the ability of borrowers to timely repay their loans, our business could be negatively affected.
If our personnel, systems or data centers are impacted, we may suffer interruptions and delays in our business operations. In addition, to the extent these events impact the ability of borrowers to timely repay their loans, our business could be negatively affected.
Our ability to attract customers to our platform and increase the number of loans facilitated on our platform will depend in large part on our ability to effectively evaluate a borrower’s creditworthiness and likelihood of default and, based on that evaluation, offer competitively priced loans and higher approval rates.
Our ability to attract customers to our platform and increase the number of loans facilitated on our platform will depend in large part on our ability to effectively evaluate a borrower’s creditworthiness and likelihood of default and, based on that evaluation, offer on behalf of our bank partners competitively priced loans and higher approval rates.
Our bank partners retain a certain 23 Table of Contents portion of the economic interests in these originated loans on their own balance sheets and sell participation rights in the remainder of the economic interests in these originated loans to us, which we in turn sell to our special purpose finance entities.
Our bank partners retain a certain portion of the economic interests in these originated loans on their own balance sheets and sell participation rights in the remainder of the economic interests in these originated loans to us, which we in turn sell to our special purpose finance entities.
The marketing channels that we employ may also become more crowded and saturated by other specialty finance platforms, which may decrease the effectiveness of our marketing campaigns and increase borrower acquisition costs. Also, the methodologies, policies and regulations applicable to marketing channels may change.
The marketing channels that we employ may also become more crowded and saturated by other specialty finance platforms, which may decrease the effectiveness of our marketing campaigns and increase borrower 32 Table of Contents acquisition costs. Also, the methodologies, policies and regulations applicable to marketing channels may change.
Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and the NYSE have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.
Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and the NYSE have experienced price and volume fluctuations that have often been 59 Table of Contents unrelated or disproportionate to the operating performance of the particular companies affected.
Launching new products can be capital intensive, and it can take time to determine both an appropriate market fit and profitable unit. New products, once launched, may never achieve scale in a target market or achieve significant profitability, such as our SalaryTap loans or OppFi Card products for which we are not currently accepting new applications.
Launching new products can be capital intensive, and it can take time to determine both an appropriate market fit and profitable unit. New products, once launched, may never achieve scale in a target market or achieve significant profitability, such as our SalaryTap loans or OppFi Card products for which new applications are not currently being accepted.
Failure by our third-party vendors or our failure to comply with legal or regulatory requirements or other contractual requirements could have an adverse effect on our business. 41 Table of Contents We have significant vendors that provide us with a number of services to support our platform.
Failure by our third-party vendors or our failure to comply with legal or regulatory requirements or other contractual requirements could have an adverse effect on our business. We have significant vendors that provide us with a number of services to support our platform.
In the event that we do not maintain adequate sources of capital, we may not be able to maintain the necessary levels of funding to retain current loan volume, which could adversely affect our business, financial condition and results of operations.
In the event that we do not maintain adequate sources of capital, we may not be able to maintain the necessary levels of funding to acquire current loan and participation volume, which could adversely affect our business, financial condition and results of operations.
In addition, we, through our SPEs, have entered into warehouse credit facilities to partially finance the origination of loans by us on our platform or the purchase of participation rights in loans originated by our bank partners through our 53 Table of Contents platform, which credit facilities are secured by the loans or participation rights.
In addition, we, through our SPEs, have entered into warehouse credit facilities to partially finance the origination of loans by us on our platform or the purchase of participation rights in loans originated by our bank partners through our platform, which credit facilities are secured by the loans or participation rights.
Such decreased demand could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows. 25 Table of Contents Our models have not yet been extensively tested during down-cycle economic conditions.
Such decreased demand could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows. Our models have not yet been extensively tested during down-cycle economic conditions.
Higher default rates by these borrowers may lead to lower demand by our bank partners and institutional investors to fund loans facilitated by our platform, which would adversely affect our business, financial condition and results of operations.
Higher default rates by these borrowers may lead to lower demand by our bank partners and institutional 24 Table of Contents investors to fund loans facilitated by our platform, which would adversely affect our business, financial condition and results of operations.
For example, in the case of the inquiry initiated by 50 Table of Contents the DFPI with respect to Program Loans, we have sought declaratory and injunctive relief in response to action by the DFPI, the outcome of which is uncertain at this time.
For example, in the case of the inquiry initiated by the DFPI with respect to Program Loans, we have sought declaratory and injunctive relief in response to action by the DFPI, the outcome of which is uncertain at this time.
In addition, compliance with certain regulatory 52 Table of Contents requirements, including the Dodd-Frank Act, the Investment Company Act and the so-called “Volcker Rule,” may affect the type of transactions that we are able to complete.
In addition, compliance with certain regulatory requirements, including the Dodd-Frank Act, the Investment Company Act and the so-called “Volcker Rule,” may affect the type of transactions that we are able to complete.
Higher default rates may also lead to lower demand by our bank partners and 26 Table of Contents capital sources to fund loans facilitated by our platform, which would adversely affect our business, financial condition and results of operations.
Higher default rates may also lead to lower demand by our bank partners and capital sources to fund loans facilitated by our platform, which would adversely affect our business, financial condition and results of operations.
We have outsourced elements of our operations (including elements of our information technology infrastructure) to third parties, and as a result, we manage a number of third-party vendors who may have access to our computer networks and sensitive or confidential information.
We have outsourced elements of our operations (including elements of our information technology infrastructure) to third parties, and as a result, we manage a 29 Table of Contents number of third-party vendors who may have access to our computer networks and sensitive or confidential information.
Our Certificate of Incorporation (“Charter”) includes a forum selection clause, which could discourage claims or limit stockholders’ ability to make a claim against us, our directors, officers, other employees or stockholders. 56 Table of Contents The Charter includes a forum selection clause.
Our Certificate of Incorporation (“Charter”) includes a forum selection clause, which could discourage claims or limit stockholders’ ability to make a claim against us, our directors, officers, other employees or stockholders. The Charter includes a forum selection clause.
The SCG Holders and their affiliates collectively hold 83.0% of total voting power of all outstanding shares of Common Stock, voting together as a single class. Additionally, the Company has entered into the Investor Rights Agreement, pursuant to which the SCG Holders’ Representative has the right to nominate five directors to the Board.
The SCG Holders and their affiliates collectively hold 74.4% of total voting power of all outstanding shares of Common Stock, voting together as a single class. Additionally, the Company has entered into the Investor Rights Agreement, pursuant to which the SCG Holders’ Representative has the right to nominate five directors to the Board.
Risks Related to Loan Funding and Indebtedness Our warehouse facilities expose us to certain risks, and we can provide no assurance that we will be able to access the whole loan sales markets, or secured warehouse credit facilities, in the future, which may require us to seek more costly financing.
Risks Related to Loan Funding and Indebtedness 53 Table of Contents Our warehouse facilities expose us to certain risks, and we can provide no assurance that we will be able to access the whole loan sales markets, or secured warehouse credit facilities, in the future, which may require us to seek more costly financing.
If we cannot successfully enter into and maintain effective strategic relationships with loan aggregators, our business could be adversely affected. In addition, the limited information such loan aggregators collect from applicants does not always allow us to offer rates to applicants that we would otherwise be able to through direct applicant traffic to Opploans.com.
If we cannot successfully enter into and maintain effective strategic relationships with loan aggregators, our business could be adversely affected. In addition, the limited information such loan aggregators collect from applicants does not always allow us to offer rates to applicants that we would otherwise be able to on behalf of our bank partners through direct applicant traffic to Opploans.com.
In addition, our investment of resources to develop new products and services may either be insufficient or result in expenses that are excessive in light of revenue actually derived from these new products and services.
In addition, our investment of resources to develop new products and services may either be insufficient or result in expenses that are excessive in light of revenue actually derived from these new products and 26 Table of Contents services.
If we are unable to maintain access to needed services on favorable terms, we would have to materially alter, or possibly discontinue, some or all of our business if alternative processors are not available.
If we are unable to maintain access 45 Table of Contents to needed services on favorable terms, we would have to materially alter, or possibly discontinue, some or all of our business if alternative processors are not available.
The deemed exchanges in the business combination and any exchanges pursuant to the OppFi-LLC A&R LLCA, are expected to result in increases in our allocable share of the tax basis of the tangible and intangible assets of OppFi-LLC.
The 65 Table of Contents deemed exchanges in the business combination and any exchanges pursuant to the OppFi-LLC A&R LLCA, are expected to result in increases in our allocable share of the tax basis of the tangible and intangible assets of OppFi-LLC.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information on our cybersecurity risks that may materially affect us, please refer to the section titled “Risk Factors – Security breaches of borrowers’ confidential information that we store may harm our reputation, adversely affect our results of operations and expose us to liability – and – If our risk management framework does not effectively identify and control our risks, we could suffer unexpected losses or be adversely affected, which could have a material adverse effect on our business.” While to date we have not identified any breaches from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, the sophistication of cybersecurity threats continues to increase, and the preventative actions we take to reduce the risk of cybersecurity incidents and protect our systems and information may be insufficient.
Biggest changeFor more information on our cybersecurity risks that may materially affect us, please refer to the section titled “Risk Factors – Security breaches of borrowers’ confidential information that we store may harm our reputation, adversely affect our results of 68 Table of Contents operations and expose us to liability – and – If our risk management framework does not effectively identify and control our risks, we could suffer unexpected losses or be adversely affected, which could have a material adverse effect on our business.” While to date we have not identified any breaches from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, the sophistication of cybersecurity threats continues to increase, and the preventative actions we take to reduce the risk of cybersecurity incidents and protect our systems and information may be insufficient.
The Audit Committee directly 67 Table of Contents oversee and regularly review our cybersecurity program, receiving periodic reports from our Chief Information Security Officer (“CISO”) on various matters including risk assessment results, progress of risk reduction initiatives, feedback from external auditors, control maturity assessments, and relevant internal and industry cybersecurity incidents.
The Audit Committee directly oversee and regularly review our cybersecurity program, receiving periodic reports from our Chief Information Security Officer (“CISO”) on various matters including risk assessment results, progress of risk reduction initiatives, feedback from external auditors, control maturity assessments, and relevant internal and industry cybersecurity incidents.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS See “Legal contingencies” of Note 14 to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 68 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS See “Legal contingencies” of Note 13 to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 69 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans Information relating to equity compensation plans will be set forth in the Definitive Proxy Statement for the 2024 Annual Meeting of Stockholders and is incorporated herein by reference. The Definitive Proxy Statement will be filed with the SEC no later than 120 days after December 31, 2023. ITEM 6. [RESERVED]
Biggest changeAs of December 31, 2024, $16.4 million of the repurchase authorization under the Repurchase Program remained available. Securities Authorized for Issuance Under Equity Compensation Plans Information relating to equity compensation plans will be set forth in the Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders and is incorporated herein by reference.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Stockholders The Company’s Class A Common Stock is traded on the New York Stock Exchange under the symbol “OPFI.” As of March 22, 2024, there were 32 stockholders of record of our Class A Common Stock and 1 stockholder of record of our Class V Voting Stock.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Stockholders The Company’s Class A Common Stock is traded on the New York Stock Exchange under the symbol “OPFI.” As of March 7, 2025, there were 26 stockholders of record of our Class A Common Stock and 1 stockholder of record of our Class V Voting Stock.
The declaration of cash dividends in the future is subject to the discretion of our Board of Directors and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, and other relevant factors.
Dividend Policy During the year ended December 31, 2024, the Company paid a dividend of $0.12 per share. The declaration of cash dividends in the future is subject to the discretion of our Board of Directors and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, and other relevant factors.
Issuer Purchases of Equity Securities On January 6, 2022, OppFi announced that its Board of Directors (“Board”) had authorized the Repurchase Program. The Repurchase Program expired in December 2023. There was no repurchase activity during the fourth quarter of 2023.
Issuer Purchases of Equity Securities On April 9, 2024, the Company announced that its Board of Directors had authorized a program to repurchase (the “Repurchase Program”) up to $20.0 million in the aggregate of shares of Class A Common Stock. The Repurchase Program will expire in April 2027. There was no repurchase activity during the fourth quarter of 2024.
Removed
Dividend Policy We have never declared nor paid cash dividends on our common stock, and do not currently have any plans to declare or pay any dividends on our common stock in the foreseeable future.
Added
The Definitive Proxy Statement will be filed with the SEC no later than 120 days after December 31, 2024. ITEM 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following is a summary of OppFi’s borrowings as of December 31, 2023 and 2022 (in thousands): Borrowing December 31, December 31, Interest Rate as of Maturity Purpose Borrower(s) Capacity 2023 2022 December 31, 2023 Date Secured borrowing payable Opportunity Funding SPE II, LLC $ — $ — $ 756 15.00 % — Senior debt Revolving line of credit Opportunity Funding SPE V, LLC; Opportunity Funding SPE VII, LLC (Tranche A) $ — $ — $ 37,500 SOFR plus 7.36% April 2024 Revolving line of credit Opportunity Funding SPE V, LLC (Tranche B) $ 125,000 $ 103,400 $ 121,647 SOFR plus 6.75% June 2026 Revolving line of credit Opportunity Funding SPE V, LLC (Tranche C) $ 125,000 $ 37,500 $ — SOFR plus 7.50% July 2027 Revolving line of credit Opportunity Funding SPE IV, LLC; SalaryTap Funding SPE, LLC $ — $ — $ — SOFR plus 0.11% plus 3.85% February 2024 Revolving line of credit Opportunity Funding SPE IX, LLC $ 150,000 $ 93,871 $ 91,871 SOFR plus 7.50% December 2026 Revolving line of credit Gray Rock SPV, LLC $ 75,000 $ 48,442 $ 44,716 SOFR plus 7.25% April 2025 Total revolving lines of credit $ 475,000 $ 283,213 $ 295,734 Term loan, net OppFi-LLC $ 50,000 $ 49,454 $ 48,954 LIBOR plus 10.00% March 2025 Total senior debt $ 525,000 $ 332,667 $ 344,688 Notes payable Financed insurance premium OppFi-LLC $ — $ — $ 1,616 7.07 % July 2023 Financed insurance premium OppFi-LLC $ 1,449 $ 1,449 $ — 9.70 % June 2024 Total notes payable $ 1,449 $ 1,449 $ 1,616 82 Table of Contents LIBOR Transition In July 2017, the FCA, which regulates LIBOR, announced its intention to stop compelling banks to submit rates for the calculation of LIBOR after 2021.
Biggest changeThe following is a summary of OppFi’s borrowings as of December 31, 2024 and 2023, including borrowing capacity as of December 31, 2024 (in thousands): Borrowing December 31, December 31, Interest Rate as of Maturity Purpose Borrower(s) Capacity 2024 2023 December 31, 2024 Date Senior debt, net Revolving line of credit Opportunity Funding SPE V, LLC (Tranche B) (1) 125,000 84,500 103,400 SOFR plus 6.75% June 2026 Revolving line of credit Opportunity Funding SPE V, LLC (Tranche C) (1) 125,000 62,500 37,500 SOFR plus 7.50% July 2027 Revolving line of credit Opportunity Funding SPE IX, LLC (Castlelake) 150,000 85,871 93,871 SOFR plus 7.50% December 2026 Revolving line of credit Gray Rock SPV LLC 75,000 55,957 48,442 SOFR plus 7.45% October 2026 Total revolving lines of credit 475,000 288,828 283,213 Term loan, net OppFi-LLC 50,000 29,930 49,454 SOFR plus 0.11% plus 10.00% September 2025 Total senior debt, net $ 525,000 $ 318,758 $ 332,667 Note payable Financed insurance premium OppFi-LLC $ — $ — $ 1,449 9.70% June 2024 (2) (1) On February 13, 2025, OppFi-LLC and Opportunity Funding SPE V, LLC entered into a Second Amended and Restated Revolving Credit Agreement (the “Second A&R Credit Agreement”), which amended that certain Amended and Restated Revolving Credit Agreement, originally entered into on July 19, 2023 (as amended, supplemented or otherwise modified prior to the Amendment Date, the “A&R Credit Agreement”), by and among OppFi-LLC, Opportunity Funding SPE V, LLC, OppWin, LLC, Midtown Madison Management LLC, as administrative and collateral agent and the lenders party thereto.
For the year ended December 31, 2023, other income includes the $0.3 million in income related to the Company subleasing one floor of its office space and $0.1 million from the gain on partial loan forgiveness of the secured borrowing payable.
For the year ended December 31, 2023, other income includes $0.3 million in income related to the Company subleasing one floor of its office space and $0.1 million from the gain on partial loan forgiveness of the secured borrowing payable.
The following tables and related discussion set forth key financial and operating metrics for the Company’s operations as of and for the years ended December 31, 2023 and 2022. The key performance metrics presented are for the OppLoans product only and exclude the SalaryTap and OppFi Card products.
The following tables and related discussion set forth key financial and operating metrics for the Company’s operations as of and for the years ended December 31, 2024 and 2023. The key performance metrics presented are for the OppLoans product only and exclude the SalaryTap and OppFi Card products.
Adjusted Net Income is a non-GAAP measure defined as our Adjusted EBT less pro forma taxes for comparison purposes. We believe that Adjusted EBT and Adjusted Net Income are important measures because they allow management, investors, and our board of directors to evaluate and compare our operating results from period-to-period by making the adjustments described below.
Adjusted Net Income is a non-GAAP financial measure defined as our Adjusted EBT less pro forma taxes for comparison purposes. We believe that Adjusted EBT and Adjusted Net Income are important measures because they allow management, investors, and our Board to evaluate and compare our operating results from period-to-period by making the adjustments described below.
Changes in these estimates, that are likely to occur from period to period, or the use of different estimates that the Company could have reasonably used in the current period, would have a material impact on the Company’s financial position, results of operations or liquidity.
Changes in this estimate, that are likely to occur from period to period, or the use of different estimates that the Company could have reasonably used in the current period, would have a material impact on the Company’s financial position, results of operations or liquidity.
Finance receivables are charged off at the earlier of the time 71 Table of Contents when accounts reach 90 days past due on a recency basis, when we receive notification of a customer bankruptcy, or when finance receivables are otherwise deemed uncollectible.
Finance receivables are charged off at the earlier of the time when accounts reach 90 days past due on a recency basis, when we receive notification of a customer bankruptcy, or when finance receivables are otherwise deemed uncollectible.
In addition, we, through our SPEs, have entered into warehouse credit facilities to partially finance the origination of loans by us on our platform or the purchase of participation rights in loans originated by our bank partners through our platform, which credit facilities are secured by the loans or participation rights.
In addition, we, through our SPEs, have entered into warehouse credit facilities to partially finance the purchase of participation rights in loans originated by our bank partners through our platform, which credit facilities are secured by the loans or participation rights.
Maturities of our financing facilities are staggered over three years to help minimize refinance risk.
Maturities of our financing facilities are staggered over two years to help minimize refinance risk.
Our future capital requirements will depend on multiple factors, including our revenue growth, aggregate receivables balance, interest expense, working capital requirements, cash provided by and used in operating, investing and financing activities and capital expenditures.
The Company’s future capital requirements will depend on multiple factors, including its revenue growth, aggregate receivables balance, interest expense, working capital requirements, cash provided by and used in operating, investing and financing activities and capital expenditures.
To the extent our unrestricted cash balances, funds from operating income and funds from undrawn debt are insufficient to satisfy our liquidity needs in the future, we may need to raise additional capital through equity or debt financing and may not be able to do so on terms acceptable to it, if at all.
To the extent OppFi’s unrestricted cash balances, funds from operating income and funds from undrawn debt are insufficient to satisfy its liquidity needs in the future, the Company may need to raise additional capital through equity or debt financing and may not be able to do so on terms acceptable to the Company, if at all.
(1) Adjusted EPS and Adjusted Net Income are not prepared in accordance with the United States Generally Accepted Accounting Principles (“GAAP”). For information regarding our uses and definitions of these measures and for reconciliations to the most directly comparable United States GAAP measures, see the section titled “ Non-GAAP Financial Measures” below.
(1) Adjusted EPS and Adjusted Net Income, non-GAAP financial measures, were not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). For information regarding our uses and definitions of these financial measures and for reconciliations to the most directly comparable GAAP financial measures, see the section titled “Non-GAAP Financial Measures” below.
NON-GAAP FINANCIAL MEASURES Comparison of the years ended December 31, 2023 and 2022 We believe that the provision of non-GAAP financial measures in this report, including Adjusted EPS, Adjusted EBITDA, Adjusted EBT, and Adjusted Net Income can provide useful measures for period-to-period comparisons of our business and useful information to investors and others in understanding and evaluating our operating results.
NON-GAAP FINANCIAL MEASURES We believe that the provision of non-GAAP financial measures in this report, including Adjusted EBT, Adjusted Net Income, and Adjusted EPS can provide useful measures for period-to-period comparisons of our business and useful information to investors and others in understanding and evaluating our operating results.
The following table presents auto approval rate for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 % Auto-approval rate 71.9 % 65.3 % 10.1 % Auto-approval rate increased by 10.1% for the year ended December 31, 2023 to 71.9% from 65.3% for the year ended December 31, 2022, driven by the continued application of algorithmic automation projects that streamline frictional steps of the origination process. 72 Table of Contents RESULTS OF OPERATIONS Comparison of the years ended December 31, 2023 and 2022 The following table presents our consolidated results of operations for the years ended December 31, 2023 and 2022 (in thousands, except number of shares and per share data).
The following table presents auto approval rate for the years ended December 31, 2024 and 2023: Year Ended December 31, Change 2024 2023 % Auto-approval rate 76.5 % 71.9 % 6.3 % Auto-approval rate increased by 6.3% for the year ended December 31, 2024 to 76.5% from 71.9% for the year ended December 31, 2023, driven by the continued application of algorithmic automation projects that streamline frictional steps of the origination process. 74 Table of Contents RESULTS OF OPERATIONS Comparison of the years ended December 31, 2024 and 2023 The following table presents our consolidated results of operations for the years ended December 31, 2024 and 2023 (in thousands, except share and per share data).
Adjusted EBITDA excludes certain expenses that are required in accordance with GAAP because they are non-recurring items (such as severance), non-cash expenditures (such as depreciation and amortization, changes in the fair value of warrant liabilities, and expenses related to stock compensation), or are not related to our underlying business performance (such as interest expense).
Adjusted EBT and Adjusted Net Income exclude certain expenses that are required in accordance with GAAP because they are non-recurring items (such as severance), non-cash expenditures (such as changes in the fair value of warrant liabilities and expenses related to stock compensation), or are not related to our underlying business performance.
OppFi’s primary mission is to facilitate financial inclusion and credit access to the 63 million everyday Americans who are credit marginalized with digital specialty finance products and an unwavering commitment to its customers. OppFi works with banks to facilitate short-term credit options for everyday Americans who lack access to mainstream financial products.
OppFi’s primary mission is to facilitate financial inclusion and credit access to the 60 million everyday Americans who face credit insecurity with digital specialty finance products and an unwavering commitment to its customers. 70 Table of Contents OppFi works with banks to facilitate short-term credit options for everyday Americans who lack access to mainstream financial products.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION OVERVIEW OppFi is a tech-enabled, mission-driven specialty finance platform that broadens the reach of community banks to extend credit access to everyday Americans . The Company’s platform powers banks to offer accessible lending products through its proprietary technology and top-rated customer experience.
OVERVIEW OppFi is a tech-enabled, mission-driven specialty finance platform that broadens the reach of community banks to extend credit access to everyday Americans . The Company’s platform powers banks to offer accessible lending products through its proprietary technolo gy and top-rated customer experience.
If we are unable to raise additional capital when needed, our results of operations and financial condition could be materially and adversely impacted.
If the Company is unable to raise additional capital when needed, its results of operations and financial condition could be materially and adversely impacted.
Finance receivables at amortized cost, net decreased by $0.5 million as of December 31, 2023 compared to December 31, 2022 due to the continued rundown of OppFi Card and SalaryTap finance receivables.
Finance receivables at amortized cost, net, decreased by $0.1 million as of December 31, 2024 compared to December 31, 2023 due to the completed wind down of OppFi Card and SalaryTap finance receivables.
The following table presents average yield for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 % Average yield 127.3 % 120.0 % 6.1 % Average yield increased to 127.3% for the year ended December 31, 2023 from 120.0% for the year ended December 31, 2022.
The following table presents average yield for the years ended December 31, 2024 and 2023: Year Ended December 31, Change 2024 2023 % Average yield 131.4 % 127.3 % 3.3 % Average yield increased to 131.4% for the year ended December 31, 2024 from 127.3% for the year ended December 31, 2023.
Prepayments accelerate the timing of principal repayment and reduce interest payments. Prepayment rates in our discounted cash flow models are developed using historical results but may also incorporate discretionary adjustments based on our expectations of future performance. Warrants : OppFi holds public and private placement warrants that are recorded as a liability on the consolidated balance sheets.
Prepayments accelerate the timing of principal repayment and reduce interest payments. Prepayment rates in our discounted cash flow models are developed using historical results but may also incorporate discretionary adjustments based on our expectations of future performance.
Other liabilities decreased by $2.1 million as of December 31, 2023 compared to December 31, 2022 driven by a decrease in the operating lease liability of $1.5 million and a decrease in the tax receivable agreement liability of $0.6 million.
Other liabilities decreased by $0.3 million as of December 31, 2024 compared to December 31, 2023 driven by a decrease in the operating lease liability of $1.8 million, partially offset by an increase in the tax receivable agreement liability of $1.5 million.
Net loss attributable to OppFi Inc. was $1.0 million for the year ended December 31, 2023, down from net income attributable to OppFi Inc. of $7.1 million for the year ended December 31, 2022. Net (loss) income attributable to OppFi Inc. represents the income solely attributable to stockholders of OppFi Inc.
Net income attributable to OppFi Inc. was $7.3 million for the year ended December 31, 2024, up from a net loss of $1.0 million for the year ended December 31, 2023.
Financing Activities Net cash used in financing activities was $27.6 million for the year ended December 31, 2023.
Financing Activities Net cash used in financing activities was $66.0 million for the year ended December 31, 2024.
The following table presents net charge-offs as a percentage of average receivables for the years ended December 31, 2023 and 2022: Year Ended December 31, Change 2023 2022 % Net charge-offs as % of average receivables 55.4 % 61.9 % (10.5) % Net charge-offs as a percentage of average receivables decreased by 10.5% to 55.4% for the year ended December 31, 2023 from 61.9% for the year ended December 31, 2022.
The following table presents net charge-offs as a percentage of total revenue and as a percentage of average receivables for the years ended December 31, 2024 and 2023: Year Ended December 31, Change 2024 2023 % Net charge-offs as % of total revenue 39.1 % 43.5 % (10.1) % Net charge-offs as % of average receivables 51.4 % 55.4 % (7.2) % Net charge-offs as a percentage of total revenue decreased to 39.1% for the year ended December 31, 2024 from 43.5% for the year ended December 31, 2023.
Net Charge-Offs as a Percentage of Average Receivables Net charge-offs as a percentage of average receivables represents total charge-offs from the period less recoveries as a percent of average receivables. Receivables are defined as the unpaid principal balances of loans. Our charge-off policy is based on a review of delinquent finance receivables on a loan by loan basis.
Receivables are defined as the unpaid principal balances of loans. Our charge-off policy is based on a review of delinquent finance receivables on a loan-by-loan basis.
Key Performance Metrics We regularly review the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make strategic decisions, which may also be useful to an investor.
For further details, see Note 1 to the Consolidated Financial Statements, “Description of Business and Significant Accounting Policies.” KEY PERFORMANCE METRICS We regularly review the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make strategic decisions, which may also be useful to an investor.
We believe that presenting Adjusted EPS is useful to investors and others because, due to the Company’s Up-C structure, Basic EPS calculated on a GAAP basis excludes a large percentage of the Company’s outstanding shares of common stock, which are Class V Voting Stock, and Diluted EPS calculated on a GAAP basis excludes dilutive securities, including Class V Voting Stock, in any period in which the Company reports a loss as dilutive securities are considered to be antidilutive.
We believe that presenting Adjusted EPS is useful to investors and others because, due to the Company’s Up-C structure, Basic EPS calculated on a GAAP basis excludes a large percentage of the Company’s outstanding shares of common stock, which are Class V Voting Stock, and Diluted EPS calculated on a GAAP basis excludes dilutive securities, including Class V Voting Stock, restricted stock units, performance stock units, stock options, and the employee stock purchase plan, in any periods in which their inclusion would have an antidilutive effect.
Other assets decreased by $8.1 million as of December 31, 2023 compared to December 31, 2022 mainly due to a decrease in property, equipment, and software of $3.7 million, a decrease in the operating lease right of use asset of $1.4 million, and a decrease in the deferred tax asset of $1.0 million.
Other assets decreased by $4.2 million as of December 31, 2024 compared to December 31, 2023 mainly due to a decrease in the deferred tax asset of $4.4 million, a decrease in the operating lease right of use asset of $1.6 million, and a decrease in capitalized debt issuance costs of $1.1 million, partially offset by an increase in property, equipment, and software of $3.3 million.
HIGHLIGHTS Our financial results as of and for the year ended December 31, 2023 are summarized below: • Basic and diluted loss per share of $0.06 and $0.06 for the year ended December 31, 2023, respectively; • Adjusted earnings per share (“Adjusted EPS”) (1) of $0.51 for the year ended December 31, 2023; • Ending receivables increased 4% to $416.5 million from $402.2 million as of December 31, 2023 and 2022, respectively; • Total revenue increased 12% to $508.9 million from $452.9 million for the years ended December 31, 2023 and 2022, respectively; • Net income of $39.5 million for the year ended December 31, 2023, an increase of $36.1 million from $3.3 million for the year ended December 31, 2022; and • Adjusted net income (“Adjusted Net Income”) (1) of $43.3 million for the year ended December 31, 2023, an increase of $38.4 million from $5.0 million for the year ended December 31, 2022.
HIGHLIGHTS Our financial results as of and for the year ended December 31, 2024 are summarized below: • Basic and diluted earnings per share (“EPS”) of $0.36 for the year ended December 31, 2024; • Adjusted earnings per share (“Adjusted EPS”) (1) of $0.95 for the year ended December 31, 2024 an increase of $0.46 from $0.49 for the year ended December 31, 2023; • Net originations increased 7.2% to $801.5 million from $747.8 million for the years ended December 31, 2024 and 2023, respectively; • Ending receivables increased 2.1% to $425.2 million from $416.5 million as of December 31, 2024 and 2023, respectively; • Total revenue increased 3.3% to $526.0 million from $508.9 million for the years ended December 31, 2024 and 2023, respectively; • Net income of $83.8 million for the year ended December 31, 2024, an increase of $44.4 million from $39.5 million for the year ended December 31, 2023; and • Adjusted net income (“Adjusted Net Income”) (1) of $82.7 million for the year ended December 31, 2024, an increase of $41.2 million from $41.5 million for the year ended December 31, 2023.
We also earn revenue from referral fees related primarily to our turn-up program, which represented 0.3% of total revenue for the year ended December 31, 2023. 73 Table of Contents Total revenue increased by $56.1 million, or 12.4%, to $508.9 million for the year ended December 31, 2023 from $452.9 million for the year ended December 31, 2022.
We also earn revenue from referral fees related primarily to our “Turn-Up” program, which represented 0.3% of total revenue for the year ended December 31, 2024. Total revenue increased by $17.0 million, or 3.3%, to $526.0 million for the year ended December 31, 2024 from $508.9 million for the year ended December 31, 2023.
The following table presents our unrestricted cash and undrawn debt as of December 31, 2023 and 2022 (in thousands): December 31, 2023 December 31, 2022 Unrestricted cash $ 31,791 $ 16,239 Undrawn debt $ 192,333 $ 136,800 As of December 31, 2023, OppFi had $31.8 million in unrestricted cash, an increase of $15.6 million from December 31, 2022.
The following table presents our unrestricted cash and undrawn debt as of December 31, 2024 and 2023 (in thousands): December 31, 2024 2023 Unrestricted cash $ 61,344 $ 31,791 Undrawn debt $ 206,242 $ 192,333 As of December 31, 2024, OppFi had $61.3 million in unrestricted cash, an increase of $29.6 million from December 31, 2023.
As a result of the Company’s Up-C structure, the underlying income or expense components that are attributable to OppFi Inc. are generally expense items related to OppFi Inc.’s status as a public company, the income or expense for the change in fair value of warrant liabilities related to the Company’s warrants, and the Company’s approximate percentage interest in the non-controlling interest.
As a result of the Company’s Up-C structure, the underlying income or expense components are generally the economic interest in OppFi-LLC’s income or loss, expenses related to its status as a public company, and the change in fair value of warrant liabilities.
Investing Activities Net cash used in investing activities was $244.3 million for the year ended December 31, 2023. This was a decrease of $73.0 million when compared to net cash used in investing activities of $317.2 million for the year ended December 31, 2022, mainly due to lower finance receivables originated and acquired and higher finance receivables repaid and recovered.
This was a decrease of $0.9 million when compared to net cash used in investing activities of $244.3 million for the year ended December 31, 2023, mainly due to higher finance receivables repaid and recovered, partially offset by higher finance receivables originated and acquired, increased purchases of equipment and capitalized technology, and the cash consideration for the acquisition of the equity interest in Bitty.
The following table presents ending receivables as of December 31, 2023 and 2022 (in thousands): As of December 31, Change 2023 2022 $ % Ending receivables $ 416,463 $ 402,180 $ 14,283 3.6 % Ending receivables increased to $416.5 million as of December 31, 2023 from $402.2 million as of December 31, 2022.
The following table presents ending receivables as of December 31, 2024 and 2023 (in thousands): As of December 31, Change 2024 2023 $ % Ending receivables $ 425,240 $ 416,463 $ 8,777 2.1 % Ending receivables increased to $425.2 million as of December 31, 2024 from $416.5 million as of December 31, 2023.
These warrant liabilities arose with respect to warrants issued in connection with the initial public offering of FGNA and is subject to re-measurement at each balance sheet date. Other Income Other income totaled $0.4 million for the year ended December 31, 2023 and $0.1 million for the year ended December 31, 2022.
Change in Fair Value of Warrant Liabilities The fair value of warrant liabilities increased by $8.2 million and $5.0 million for the years ended December 31, 2024 and 2023, respectively. These warrant liabilities arose with respect to warrants issued in connection with the initial public offering of FGNA and are subject to re-measurement at each balance sheet date.
This was an increase of $88.8 million when compared to net cash provided by financing activities of $61.3 million for the year ended December 31, 2022, primarily due to an increase in member distributions and net payments of senior debt and notes payable, partially offset by a decrease in net payments of secured borrowings payable. 81 Table of Contents Financing Arrangements Our corporate credit facilities consist of term loans and revolving loan facilities that we have drawn on to finance our operations and for other corporate purposes.
This was an increase of $38.4 million when compared to net cash used in financing activities of $27.6 million for the year ended December 31, 2023, primarily due to an increase in distributions to members of OppFi-LLC, net payments of senior debt, repurchases of common stock, and dividends paid on common stock. 83 Table of Contents FINANCING ARRANGEMENTS Our corporate credit facilities consist of term loans and revolving loan facilities that we have drawn on to finance our operations and for other corporate purposes.
We believe that presenting Adjusted EPS is useful to investors and others because it presents the Company’s Adjusted Net Income on a per share basis based on the shares of the Company’s common stock that would be issued but for, and can be issued as a result of, the Company’s Up-C structure, excluding the forfeitable earnout shares from the Company’s Business Combination.
We believe that presenting Adjusted EPS is useful to investors and others because it presents the Company’s Adjusted Net Income on a per share basis based on the shares of the Company’s common stock that would be issued but for, and can be issued as a result of, the Company’s Up-C structure. 80 Table of Contents The following tables present reconciliations of non-GAAP financial measures for the years ended December 31, 2024 and 2023 (in thousands, except share and per share data).
Change in fair value totaled $231.4 million for the year ended December 31, 2023, which was comprised of $220.9 million of net charge-offs and a fair market value adjustment of $10.5 million, down from $234.0 million for the year ended December 31, 2022, which was comprised of $232.3 million of net charge-offs and a fair market value adjustment of $1.7 million.
Change in fair value totaled $204.4 million for the year ended December 31, 2024, which was comprised of $240.4 million of gross charge-offs, offset by $34.7 million of recoveries and a positive fair value adjustment of $1.3 million, down from $231.4 million for the year ended December 31, 2023, which was comprised of $246.5 million of gross charge-offs and a negative fair value adjustment of $10.5 million, offset by $25.6 million of recoveries.
We believe that our unrestricted cash, undrawn debt and funds from operating income will be sufficient to meet our liquidity needs for at least the next 12 months from the date of this Annual Report.
OppFi believes that its unrestricted cash, undrawn debt and funds from operating income will be sufficient to meet its liquidity need s, including repayment of the current portion of its debt as it becomes due, for at least the next 12 months from the date of this Quarterly Report.
The vast majority of our originations ultimately disburse to a borrower, but disbursement timing lags that of originations. Originations may be useful to an investor because they help understand the growth trajectory of our revenues.
The vast majority of our originations ultimately disburse to a borrower, but disbursement timing lags that of originations.
Servicing costs are derived from an internal analysis of our cost structure considering the characteristics of our installment finance receivables and have been benchmarked against observable information on comparable assets in the marketplace. • Remaining life: Remaining life is the time weighted average of the remaining contractual loan term divided by the principal balance at the measurement date.
Servicing costs are derived from an internal analysis of our cost structure considering the characteristics of our installment finance receivables and have been benchmarked against observable information on comparable assets in the marketplace. • Default rate: The default rate reflects our estimate of principal payments that will not be repaid over the remaining life of an installment finance receivable.
Income Tax Expense (Benefit) OppFi Inc. recorded an income tax expense of $2.3 million for the year ended December 31, 2023, an increase of $2.6 million from income tax benefit of $0.3 million for the year ended December 31, 2022. This increase was largely attributed to the change in fair value of warrant liabilities.
Income Tax Expense OppFi recorded an income tax expense of $4.2 million for the year ended December 31, 2024, an increase of $1.9 million from income tax expense of $2.3 million for the year ended December 31, 2023. This increase is largely attributed to OppFi Inc.’s increasing ownership in OppFi-LLC.
The following table presents total net originations (defined as gross originations net of transferred balance on refinanced loans), percentage of net originations by bank partners, and percentage of net originations by new loans for the years ended December 31, 2023 and 2022 (in thousands): 70 Table of Contents Year Ended December 31, Change 2023 2022 $ % Total net originations $ 747,839 $ 752,918 $ (5,079) (0.7) % Percentage of net originations by bank partners 97.7 % 94.6 % N/A 3.3 % Percentage of net originations by new loans 43.6 % 51.2 % N/A (14.8) % Net originations decreased to $747.8 million for the year ended December 31, 2023 from $752.9 million for the year ended December 31, 2022.
The following table presents total net originations (defined as gross originations net of transferred balance on refinanced loans), total retained net originations (defined as the portion of total net originations as defined above with respect to which the Company ultimately purchased a receivable from bank partners or originated directly), percentage of net originations by bank partners, and percentage of net originations by new loans for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, Change 2024 2023 $ % Total net originations $ 801,514 $ 747,839 $ 53,675 7.2 % Total retained net originations $ 732,799 $ 723,369 $ 9,430 1.3 % Percentage of net originations by bank partners 100.0 % 97.7 % N/A 2.4 % Percentage of net originations by new loans 44.0 % 43.6 % N/A 0.8 % Total net originations increased to $801.5 million for the year ended December 31, 2024 from $747.8 million for the year ended December 31, 2023.
OppFi’s specialty finance platform focuses on helping these consumers rebuild their financial health. Customers on OppFi’s platform benefit from a highly automated, transparent, efficient, and fully digital experience.
OppFi’s specialty finance platform focuses on helping these consumers rebuild their financial health. Customers on OppFi’s platform benefit from a highly automated, transparent, efficient, and fully digital experience. The banks that work with OppFi benefit from its turn-key, outsourced marketing, data science, and proprietary technology to digitally acquire, underwrite, and service these consumers.
The 3.6% increase was primarily driven by a higher receivables balance to begin the year in 2023 relative to 2022 as well as a healthier portfolio leading to less charge-offs year over year. Average Yield Average yield represents interest income from the period as a percent of average receivables. Receivables are defined as the unpaid principal balances of loans.
The 2.1% increase was primarily driven by a higher receivables balance to begin the year in 2024 relative to 2023, growth in retained net originations year over year, and a healthier portfolio leading to fewer charge-offs year over year. Average Yield Average yield represents total revenue from the period as a percent of average receivables.
This was an increase of $52.8 million when compared to net cash provided by operating activities of $243.3 million for the year ended December 31, 2022. Cash provided by operating activities increased mainly due to higher net income and less gain from the change in fair value of warrant liabilities compared to the prior year.
This was an increase of $27.7 million when compared to net cash provided by operating activities of $296.1 million for the year ended December 31, 2023. Cash provided by operating activities increased mainly due to higher net income. Investing Activities Net cash used in investing activities was $243.4 million for the year ended December 31, 2024.
Net Income Net income increased by $36.1 million to $39.5 million for the year ended December 31, 2023, from $3.3 million for the year ended December 31, 2022 for all of the reasons stated above. Net (Loss) Income Attributable to OppFi Inc.
Net Income Net income is the difference between income before income taxes and income tax expense. Net income increased by $44.4 million to $83.8 million for the year ended December 31, 2024 from $39.5 million for the year ended December 31, 2023 for the reasons stated above. Net Income (Loss) Attributable to OppFi Inc.
As of December 31, 2023, OppFi had an additional $192.3 million of unused debt capacity under its financing facilities for future availability, representing a 37% overall undrawn capacity, an increase from $136.8 million as of December 31, 2022.
As of December 31, 2024, OppFi had an additional $206.2 million of unused debt capacity under its financing facilities for future availability, representing a 39% overall undrawn capacity, an increase from $192.3 million as of December 31, 2023. The increase in undrawn debt was driven primarily by using excess cash to pay down debt on our term loan.
For the year ended December 31, 2023, the underlying income or expense components that are attributable to OppFi Inc. include the loss on change in fair value of warrant liabilities of $5.0 million, tax expense of $2.1 million, general and administrative expense of $0.6 million, and board fees of $0.4 million, for total loss attributable to OppFi Inc. of $8.1 million.
For the year ended December 31, 2024, income from economic interest was $21.5 million, partially offset by loss from change in fair value of warrant liabilities of $8.2 million, income tax expense of $4.2 million, and general and administrative expenses of $1.8 million, for net income attributable to OppFi Inc. of $7.3 million.
Net Revenue Net revenue is equal to total revenue less the change in fair value and total provision costs. Total net revenue increased by $56.2 million, or 25.9%, to $273.2 million for the year ended December 31, 2023 from $217.0 million for the year ended December 31, 2022. This increase was mainly due to the increase in total revenue.
Net Revenue Net revenue is equal to total revenue less the change in fair value and provision for credit losses on finance receivables. Net revenue increased by $48.3 million, or 17.7%, to $321.5 million for the year ended December 31, 2024 from $273.2 million for the year ended December 31, 2023.
Current liabilities decreased by $3.1 million as of December 31, 2023 compared to December 31, 2022 driven by a decrease in accounts payable of $1.9 million and a decrease in accrued expenses of $1.2 million.
Accounts payable and accrued expenses increased by $6.8 million as of December 31, 2024 compared to December 31, 2023 driven by an increase in accrued expenses of $10.4 million, partially offset by a decrease in accounts payable of $3.6 million.
We include both bank partner originations as well as those originated by us directly. OppFi ended its direct lending program during 2023 and exclusively utilizes a bank partner model, as of December 31, 2023. Loans are considered to be originated when the contract is signed between us and the prospective borrower.
Total Net Originations We measure originations to assess the growth trajectory and overall size of our loan portfolio. There is a direct correlation between origination growth and revenue growth. We include both bank partner originations as well as those originated by us directly. Loans are considered to be originated when the contract is signed between us and the prospective borrower.
For the year ended December 31, 2022, other income includes the income related to the Company subleasing one floor of its office space. Income Before Income Taxes Income before income taxes is the sum of income (loss) from operations, the change in fair value of warrant liabilities, and other income.
For the year ended December 31, 2024, other income includes $0.3 million in income related to the Company subleasing one floor of its office space.
Total debt decreased by $12.9 million as of December 31, 2023 compared to December 31, 2022 driven by a decrease in utilization of revolving lines of credit of $12.0 million, paydown of the secured borrowing payable of $0.8 million, and a decrease in notes payable of $0.2 million.
Total debt decreased by $15.4 million as of December 31, 2024 compared to December 31, 2023 driven by a decrease in the term loan of $19.5 million and notes payable of $1.4 million, partially offset by an increase in utilization of revolving lines of credit of $5.6 million.
Income before income tax increased by $38.7 million to $41.8 million for the year ended December 31, 2023 from $3.1 million for the year ended December 31, 2022.
Income before income taxes increased by $46.2 million, or 110.6%, to $88.1 million for the year ended December 31, 2024 from $41.8 million for the year ended December 31, 2023 for the reasons stated above.
Provision for credit losses on finance receivables increased by $2.4 million to $4.3 million for the year ended December 31, 2023, from $1.9 million for the year ended December 31, 2022. Provision for credit losses on finance receivables for the year ended December 31, 2023 increased due to higher charge-offs throughout the year, particularly due to the OppFi Card portfolio.
Provision for credit losses on finance receivables decreased by $4.3 million to $42 thousand for the year ended December 31, 2024, from $4.3 million for the year ended December 31, 2023.
For the year ended December 31, 2022, other addbacks and one-time expenses, net of $1.2 million included a $(9.4) million addback related to the change in fair value of the warrant liabilities, a $3.6 million expense related to the impairment of OppFi Card finance receivables as a result of their reclassification as held for sale, $3.4 million in expenses related to stock-based compensation, $3.0 million in expenses related to severance and retention, a $0.5 million expense related to the impairment of the operating lease right of use asset, and $0.1 million in expenses related to legal fees.
For the year ended December 31, 2023, other addbacks and one-time expenses, net of $7.9 million included $4.1 million in expenses related to provision for credit losses on the OppFi Card finance receivables, $4.1 million in expenses related to stock compensation, $1.5 million in expenses related to corporate development, $0.9 million in expenses related to retention and severance, and $0.3 million in expenses related to legal matters, partially offset by a $3.0 million addback from the reclassification of OppFi Card finance receivables from assets held for sale to assets held for investment at amortized cost.
Diluted Earnings per Share For the year ended December 31, 2023, the Company’s outstanding shares of Class V Voting Stock were excluded in computing the diluted earnings per share as the inclusion of these shares would have had an antidilutive effect under the if-converted method.
For the year ended December 31, 2023, income from economic interest was $7.1 million, offset by loss from change in fair value of warrant liabilities of $5.0 million, income tax expense of $2.1 million, and general and administrative expenses of $1.0 million, for a net loss attributable to OppFi Inc. of $1.0 million. 77 Table of Contents Diluted Earnings per Share For the years ended December 31, 2024 and 2023, the Company’s outstanding shares of Class V Voting Stock were excluded in computing the diluted earnings per share as the inclusion of these shares would have had an antidilutive effect under the if-converted method.
Warrant liabilities increased by $5.0 million due to the increase in the valuation of the warrants as of December 31, 2023 compared to December 31, 2022. Total stockholders’ equity increased by $34.9 million as of December 31, 2023 compared to December 31, 2022 driven by net income and stock-based compensation.
Warrant liabilities increased by $8.2 million due to the increase in the valuation of the warrants as of December 31, 2024 compared to December 31, 2023.
Cash Flows The following table presents cash provided by (used in) operating, investing and financing activities during the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, Change 2023 2022 $ % Net cash provided by operating activities $ 296,146 $ 243,297 $ 52,849 21.7 % Net cash used in investing activities (244,292) (317,244) 72,952 (23.0) Net cash (used in) provided by financing activities (27,581) 61,255 (88,836) (145.0) Net increase (decrease) in cash and restricted cash $ 24,273 $ (12,692) $ 36,965 291.2 % 80 Table of Contents Operating Activities Net cash provided by operating activities was $296.1 million for the year ended December 31, 2023.
CASH FLOWS The following table presents cash provided by (used in) operating, investing and financing activities during the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, Change 2024 2023 $ % Net cash provided by operating activities $ 323,806 $ 296,146 $ 27,660 9.3 % Net cash used in investing activities (243,442) (244,292) 850 (0.3) Net cash used in financing activities (66,019) (27,581) (38,438) 139.4 Net increase in cash and restricted cash $ 14,345 $ 24,273 $ (9,928) (40.9) % 82 Table of Contents Operating Activities Net cash provided by operating activities was $323.8 million for the year ended December 31, 2024.
The increase in undrawn debt was driven primarily by the increase in capacity of the revolving credit agreement with affiliates of Atalaya Capital Management in July 2023 . Including total financing commitments of $525.0 million, and cash on the balance sheet of $73.9 million, OppFi had approximately $598.9 million in funding capacity as of December 31, 2023.
Including total financing commitments of $525.0 million and cash and restricted cash on the balance sheet of $88.3 million, OppFi had approximately $613.3 million in funding capacity as of December 31, 2024.
Income (Loss) from Operations Income (loss) from operations is the difference between net revenue and expenses. Total income from operations increased by $52.7 million to $46.4 million for the year ended December 31, 2023 from loss from operations of $6.3 million for the year ended December 31, 2022.
Income from operations increased by $48.2 million to $94.5 million for the year ended December 31, 2024 from income from operations of $46.4 million for the year ended December 31, 2023.
The 3.3% increase is due to our origination mix continuing to shift towards a servicing / facilitation model for bank partners from a direct origination model. Total net originations of new loans as percentage of total loans decreased to 43.6% for the year ended December 31, 2023 from 51.2% for the year ended December 31, 2022.
During the third quarter of 2023, the Company ceased directly originating loans and transitioned completely to a servicing / facilitation model for bank partners. Total net originations of new loans as percentage of total loans increased to 44.0% for the year ended December 31, 2024 from 43.6% for the year ended December 31, 2023.
However, non-GAAP financial measures are not calculated in accordance with GAAP measures, should not be considered an alternative to any measure of financial performance calculated and presented in accordance with GAAP, and may not be comparable to the non-GAAP financial measures of other companies. 76 Table of Contents Adjusted EBT, Adjusted Net Income, and Adjusted EBITDA Adjusted EBT is a non-GAAP measure defined as our GAAP net income (loss) adjusted to eliminate the effect of certain items as shown below, including provision for income taxes, debt issuance cost amortization, other addbacks and one-time expenses and sublease income.
However, non-GAAP financial measures are not calculated in accordance with GAAP financial measures, should not be considered an alternative to any measure of financial performance calculated and presented in accordance with GAAP, and may not be comparable to the non-GAAP financial measures of other companies.
(b) Assumes the entire Company is a C-Corp with a tax rate of 23.56% for the year ended December 31, 2023 and a tax rate of 24.17% for the year ended December 31, 2022, reflecting the U.S. federal statutory rate of 21% and a blended statutory rate for state income taxes, in order to allow for a comparison with other publicly traded companies. 78 Table of Contents Adjusted Earnings Per Share Adjusted EPS is defined as adjusted net income divided by weighted average diluted shares outstanding, which represent shares of both classes of common stock outstanding, excluding 25,500,000 shares related to earnout obligations and including the impact of restricted stock units, performance stock units, and the employee stock purchase plan.
Adjusted Earnings Per Share Adjusted EPS is defined as adjusted net income divided by weighted average diluted shares outstanding, which represents shares of both classes of common stock outstanding, excluding 25,500,000 shares related to earnout units, and including the impact of dilutive securities, such as restricted stock units, performance stock units, stock options, and the employee stock purchase plan.
The increase was due to higher average receivables balances throughout the year as well as stronger payment activity driving a higher yield on the balances. Change in Fair Value and Provision for Credit Losses on Finance Receivables Commencing on January 1, 2021, we elected the fair value option on the OppLoans installment product.
The increase was due to higher average receivables balances throughout the period, a higher average statutory rate for the loans in the portfolio, and stronger payment activity driving a higher yield on the balances.
The 6.1% increase was driv en by a decrease in delinquent loans in the portfolio that were not accruing interest and a decrease in enrollment in our hardship and assistance programs, which provide payment relief due to natural disasters, loss of income, increase in expenses, or other unpredictable events such as COVID-19, as well as a relative shift away from states with lower interest rates.
The 3.3% increase was driven by a decrease in delinquent loans in the portfolio that were not accruing interest throughout the period as well as an increase in the average statutory rate due to the introduction of pricing initiatives throughout 2024 and a relative shift away from states with lower interest rates.
The banks that work with OppFi benefit from its turn-key, outsourced marketing, data science, and proprietary technology to digitally acquire, underwrite and service these consumers. 69 Table of Contents OppFi’s primary products are offered by its OppLoans platform. Customers on this platform are U.S. consumers, who are employed, have bank accounts, and generally earn median wages.
OppFi’s primary products are offered by its OppLoans platform. Customers on this platform are U.S. consumers who are employed, have bank accounts, and generally earn median wages. The average installment loan facilitated by OppFi is approximately $1,750, payable in installments and with an average contractual term of 11 months.
Year Ended December 31, Change 2023 2022 $ % Interest and loan related income $ 505,430 $ 451,448 $ 53,982 12.0 % Other revenue 3,519 1,411 2,108 149.4 Total revenue 508,949 452,859 56,090 12.4 Change in fair value of finance receivables (231,419) (233,959) 2,540 (1.1) Provision for credit losses on finance receivables (4,348) (1,940) (2,408) 124.1 Net revenue 273,182 216,960 56,222 25.9 Expenses: Sales and marketing 46,222 54,407 (8,185) (15.0) Customer operations 41,559 42,314 (755) (1.8) Technology, products, and analytics 39,161 33,439 5,722 17.1 General, administrative, and other 53,135 57,980 (4,845) (8.4) Total expenses before interest expense 180,077 188,140 (8,063) (4.3) Interest expense 46,750 35,162 11,588 33.0 Total expenses 226,827 223,302 3,525 1.6 Income (loss) from operations 46,355 (6,342) 52,697 830.9 Change in fair value of warrant liabilities (4,976) 9,352 (14,328) (153.2) Other income 431 53 378 713.2 Income before income taxes 41,810 3,063 38,747 1265.0 Income tax expense (benefit) 2,331 (277) 2,608 941.5 Net income 39,479 3,340 36,139 1082.0 Less: net income (loss) attributable to noncontrolling interest 40,484 (3,758) 44,242 1177.3 Net (loss) income attributable to OppFi Inc. $ (1,005) $ 7,098 $ (8,103) (114.2) % (Loss) earnings per share attributable to OppFi Inc.: (Loss) earnings per common share: Basic $ (0.06) $ 0.51 Diluted $ (0.06) $ 0.05 Weighted average common shares outstanding: Basic 16,391,199 13,913,626 Diluted 16,391,199 84,256,084 Total Revenue Total revenue consists mainly of revenue earned from interest on receivables from outstanding loans based on the interest method.
Year Ended December 31, Change 2024 2023 $ % Interest and loan related income $ 521,227 $ 505,430 $ 15,797 3.1 % Other revenue 4,736 3,519 1,217 34.6 Total revenue 525,963 508,949 17,014 3.3 Change in fair value of finance receivables (204,443) (231,419) 26,976 (11.7) Provision for credit losses on finance receivables (42) (4,348) 4,306 (99.0) Net revenue 321,478 273,182 48,296 17.7 Expenses: Sales and marketing 41,341 46,222 (4,881) (10.6) Customer operations (a) 47,023 46,362 661 1.4 Technology, products, and analytics 35,639 39,161 (3,522) (9.0) General, administrative, and other (a) 58,231 48,332 9,899 20.5 Total expenses before interest expense 182,234 180,077 2,157 1.2 Interest expense 44,708 46,750 (2,042) (4.4) Total expenses 226,942 226,827 115 0.1 Income from operations 94,536 46,355 48,181 103.9 Change in fair value of warrant liabilities (8,244) (4,976) (3,268) 65.7 Income from equity method investment 1,442 — 1,442 — Other income 318 431 (113) (26.2) Income before income taxes 88,052 41,810 46,242 110.6 Income tax expense 4,215 2,331 1,884 80.8 Net income 83,837 39,479 44,358 112.4 Less: net income attributable to noncontrolling interest 76,579 40,484 36,095 89.2 Net income (loss) attributable to OppFi Inc. $ 7,258 $ (1,005) $ 8,263 821.8 % Earnings (loss) per share attributable to OppFi Inc.: Earnings (loss) per common share: Basic $ 0.36 $ (0.06) Diluted $ 0.36 $ (0.06) Weighted average common shares outstanding: Basic 20,145,606 16,391,199 Diluted 20,145,606 16,391,199 (a) Beginning with the quarter ended March 31, 2024, for all periods presented, the Company reclassified certain expenses that were previously included in general, administrative, and other expenses to customer operations expenses. 75 Table of Contents Total Revenue Total revenue consists mainly of revenue earned from interest on receivables from outstanding loans based on the interest method.
To derive the fair value, we generally utilize discounted cash flow analyses that factor in estimated losses and prepayments over the estimated duration of the underlying assets. Loss and prepayment assumptions are determined using historical loss data and include appropriate consideration of recent trends and anticipated future performance.
Change in Fair Value and Provision for Credit Losses on Finance Receivables Commencing on January 1, 2021, we elected the fair value option on the OppLoans installment product. To derive the fair value, we generally utilize discounted cash flow analyses that factor in estimated losses and prepayments over the estimated duration of the underlying assets.
This increase was due to higher net revenue outweighing higher total expenses for the year ended December 31, 2023 as a result of the reasons discussed above. 74 Table of Contents Change in Fair Value of Warrant Liabilities Change in fair value of warrant liabilities totaled $(5.0) million for the year ended December 31, 2023 and $9.4 million for the year ended December 31, 2022.
This increase was driven primarily by higher total revenue and lower change in fair value and provision for credit losses on finance receivables, slightly offset by higher expenses for the year ended December 31, 2024 as a result of the reasons stated above.
Finance receivables at fair value increased by $6.0 million as of December 31, 2023 compared to December 31, 2022 due to strength in issuance volume and decrease in charge-offs throughout the second half of the year.
Finance receivables at fair value increased by $10.4 million as of December 31, 2024 compared to December 31, 2023 mainly driven by growth in retained net originations and a healthier portfolio leading to fewer charge-offs year over year.
Year Ended December 31, (unaudited) 2023 2022 Weighted average Class A common stock outstanding 16,391,199 13,913,626 Weighted average Class V voting stock outstanding 93,857,926 95,724,487 Elimination of earnouts at period end (25,500,000) (25,500,000) Dilutive impact of restricted stock units 261,595 105,928 Dilutive impact of performance stock units 40,584 9,492 Dilutive impact of employee stock purchase plan — 2,551 Weighted average diluted shares outstanding 85,051,304 84,256,084 (in thousands, except share and per share data) Year Ended December 31, 2023 Year Ended December 31, 2022 (unaudited) $ Per Share $ Per Share Weighted average diluted shares outstanding 85,051,304 84,256,084 Net income $ 39,479 $ 0.46 $ 3,340 $ 0.04 Income tax expense (benefit) 2,331 0.03 (277) — Debt issuance cost amortization 2,428 0.03 2,372 0.03 Other addbacks and one-time expenses, net 12,790 0.15 1,180 0.01 Sublease income (318) — (53) — Adjusted EBT 56,710 0.67 6,562 0.08 Less: pro forma taxes (13,361) (0.16) (1,586) (0.02) Adjusted net income 43,349 $ 0.51 4,976 $ 0.06 79 Table of Contents LIQUIDITY AND CAPITAL RESOURCES To date, the funds received from operating income and our ability to obtain lending commitments have provided the liquidity necessary for us to fund our operations.
Comparison of the years ended December 31, 2024 and 2023 Year Ended December 31, (unaudited) 2024 2023 Weighted average Class A common stock outstanding 20,145,606 16,391,199 Weighted average Class V voting stock outstanding 65,619,358 93,857,926 Elimination of earnouts at period end — (25,500,000) Dilutive impact of restricted stock units 789,783 261,595 Dilutive impact of performance stock units 72,802 40,584 Dilutive impact of stock options 24,679 — Dilutive impact of employee stock purchase plan 199 — Weighted average diluted shares outstanding 86,652,427 85,051,304 (in thousands, except share and per share data) Year Ended December 31, 2024 Year Ended December 31, 2023 (unaudited) $ Per Share $ Per Share Weighted average diluted shares outstanding 86,652,427 85,051,304 Net income $ 83,837 $ 0.97 $ 39,479 $ 0.46 Income tax expense 4,215 0.05 2,331 0.03 Other income (318) — (431) (0.01) Change in fair value of warrant liabilities 8,244 0.10 4,976 0.06 Other addbacks and one-time expenses, net (a) 12,024 0.14 7,928 0.09 Adjusted EBT (b) 108,002 1.25 54,283 0.64 Less: pro forma taxes (c) 25,337 0.29 12,789 0.15 Adjusted net income (b) $ 82,665 $ 0.95 $ 41,494 $ 0.49 (a) For the year ended December 31, 2024, other addbacks and one-time expenses, net of $12.0 million included $5.3 million in expenses related to stock compensation, $3.0 million in expenses related to OppFi Card’s exit activities, $1.8 million in expenses related to legal matters, $1.3 million in expenses related to severance, and $0.7 million in expenses related to corporate development.
Auto-Approval Rate Auto-approval rate is calculated by taking the number of approved loans that are not decisioned by a loan advocate or underwriter (auto-approval) divided by the total number of loans approved.
The decrease in net charge-offs as a percentage of average receivables for the year ended December 31, 2024 is a result of both lower gross charge-offs and higher recoveries driving lower levels of net charge-offs compared to the year ended December 31, 2023. 73 Table of Contents Auto-Approval Rate Auto-approval rate is calculated by taking the number of approved loans that are not decisioned by a loan processor or underwriter (auto-approval) divided by the total number of loans approved.
Future cash flows are discounted using a rate of return that we believe a market participant would require based on the risk characteristics of the loans. We did not elect the fair value option on our SalaryTap and OppFi Card finance receivables, which are carried at amortized cost, net of allowance for credit losses.
Loss and prepayment assumptions are determined using historical loss data and include appropriate consideration of recent trends and anticipated future performance. Future cash flows are discounted using a rate of return that we believe a market participant would require based on the risk characteristics of the loans.
Expenses Expenses include costs related to salaries and employee benefits, interest expense and amortized debt issuance costs, sales and marketing, customer operations, technology, products, and analytics, and general, administrative, and other expenses. Expenses increased by $3.5 million, or 1.6%, to $226.8 million for the year ended December 31, 2023 from $223.3 million for the year ended December 31, 2022.
This increase was due to both the increase in total revenue and the decrease in change in fair value and provision for credit losses on finance receivables. Expenses Expenses include costs related to salaries and employee benefits, interest expense and amortized debt issuance costs, sales and marketing, customer operations, technology, products, and analytics, and general and administrative expenses.
The increase was partially offset by lower direct marketing costs resulting from lower total originations as well as a relative shift in originations towards lower-cost refinance loans. Despite the overall increase in expenses, expenses as a percent of total revenue decreased from 49.3% to 44.6% for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Despite the slight increase in expenses for the year ended December 31, 2024, expenses as a percent of total revenue decreased from 44.6% to 43.1% for the year ended December 31, 2024 compared to the year ended December 31, 2023. 76 Table of Contents Income from Operations Income from operations is the difference between net revenue and expenses.
See Note 18, Subsequent Events, in the notes to the consolidated financial statements included in this Annual Report on Form 10-K for further discussion regarding the Company’s revolving credit agreement with UMB Bank, N.A.
For a detailed discussion on financing arrangements refer to Note 6 to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.
Adjusted EBITDA is a non-GAAP measure defined as our Adjusted Net Income adjusted for the items as shown below, including pro forma and business (non-income) taxes, depreciation and amortization, and interest expense.
Adjusted EBT is a non-GAAP financial measure defined as our GAAP net income adjusted to eliminate the effect of certain items as shown below, including income tax expense, other income, change in fair value of warrant liabilities, and other addbacks and one-time expenses.
In certain cases, our assessments, with respect to assumptions market participants would make, may be inherently difficult to determine, and the use of different assumptions could result in material changes to these fair value measurements. 83 Table of Contents Installment Finance Receivables : To derive the fair value, the Company generally utilizes discounted cash flow analyses that factor in estimated losses and prepayments over the estimated duration of the underlying assets.
(2) Maturity date as of 12/31/2023 and for the subsequent period until the borrowing was paid in full in June 2024. 84 Table of Contents CRITICAL ACCOUNTING ESTIMATES Installment Finance Receivables : To derive the fair value, the Company generally utilizes discounted cash flow analyses that factor in estimated losses and prepayments over the estimated duration of the underlying assets.

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