It sounds like one of those too-good-to-be true propositions: Buy an item online, shell out just a fraction of the price at checkout and pay the remainder in installments over time, typically at no extra cost. As online shopping has soared during the pandemic, the popularity of these new payment programs, known as buy now, pay later (BNPL) plans, has skyrocketed as well. Last year alone, Americans spent $20.8 billion through these services, with purchases overall up 230 percent since the start of 2020, according to a study by Accenture commissioned by Afterpay, one of the leading players in the field.

Traditionally offered just for online spending by financial tech companies like Affirm, Klarna and PayPay Credit in addition to Afterpay, the types of BNPL plans available and the companies that provide them has grown sharply. Now the plans have been extended to include some in-store purchases too, and credit-card issuers are getting into the act as well, offering their own versions of installment payment plans. In other words, they’re everywhere these days. While estimates of use range widely, the consensus suggests that between at least one-third to one-half of Americans have used an extended payment plan at least once and that roughly three-quarters of them are repeat customers.

The appeal is understandable: In addition to the typically free financing, the application process is easy, with barely any credit check involved, and approval is nearly instantaneous. But there are risks too, and they’re often not understood by consumers. They include late fees that can pile up, possible damage to credit scores, a lack of the traditional oversight that governs other types of loans, and some shoppers being lured into spending more than they can afford. Those risks were considered serious enough by the Consumer Financial Protection Bureau that the watchdog agency recently launched an inquiry into the business practices of the five leading BNPL providers. The three major credit bureaus also announced changes at the end of last year to better track usage of these programs.

Thinking about taking advantage of the offer to extend payments—for free!—on your next online purchase? Here’s what you need to know before you click yes.

How the Plans Work

Buy now, pay later programs fall into one of two broad categories, usually depending on the price of what you’re purchasing. For items that cost $1,500 or less, the plan typically splits repayment into four equal installments spread across six weeks; you won’t be charged interest and the loan won’t impact your credit record or score. For larger purchases, payments are usually spread over a longer period, up to 48 months, and you’ll probably be charged interest that can run as high as 30 percent, depending on your personal profile and credit history.

The same companies often offer both plan types and the process is the same. You apply at checkout for credit that covers the amount of your purchase (versus, say, a larger line of credit on a standard credit card). You answer a few basic questions about yourself, such as your date of birth, email address and phone number, provide a debit or credit card number, and then, voila, you’re approved (larger loans might require a credit check). You pay a portion of the bill when you buy and the remaining balance in equal installments over a fixed period. If it’s a bigger-ticket item and the plan charges interest, that additional cost will be baked into each payment and spelled out before you accept the loan.

“It is a fast, painless process. You enter as little as four pieces of information about yourself and within 30 seconds find out if you’re approved,” says Ginger Schmeltzer, strategic advisor for Aite-Novarica Group’s retail banking and payments practice.

Prefer in-store shopping to digital deals? Not a problem. Some services now offer a similar extended payment plan via debit cards or digital cards you can access through their apps. Amex, Chase and other traditional credit card issuers have begun offering cardholders the option of a similar installment plan for some large purchases, typically for a fixed fee—likely to ward off the competition since more than half of BNPL plan users prefer them to credit cards and 38 percent say they intend to replace their plastic with them, C+R Research reports.

Part of the plans’ appeal is the fact that consumers see them as a more transparent form of borrowing than paying by credit card, with a fixed amount due each payment period and a deadline for settling the debt, which makes it easier to budget, says Matt Schulz, chief credit analyst at LendingTree. Shoppers with thin or poor credit histories or maxed-out cards also prefer these services because they have a better chance of approval. According to CB Insights, for instance, Affirm approves 20 percent more customers on average than comparable competitors.

The ease of the buy now, pay later process quickly makes converts out of its users. Almost half say they now choose this financing method most of the time or every time they shop online, according to C+R Research.

Consumers Are Confused

And therein lies part of the problem. Buy now, pay later plans make it so easy to finance a purchase that many shoppers sign up without really knowing what they’re getting into—one reason that the federal government consumer watchdog agency is looking into them. “The Bureau is aware of consumer demand for buy now, pay later credit and its substantial growth over 2020 and 2021,” the CFPB tells Newsweek. “This growth, combined with concerns about potential consumer misunderstanding of the products, and the lack of quality publicly available data on the BNPL market, led the Bureau to issue its market monitoring inquiry.”

Among the misconceptions: Many consumers don’t realize BNPL plans are a form of credit or a loan. Instead, people describe them as a “way to pay” or a “money management tool,” and a quarter of users incorrectly told The Motley Fool BNPL plans aren’t debt.

Since these services are relatively new and each BNPL provider has its own unique repayment terms and schedule, consumers can get mixed up. Nearly a third of users told LendingTree they didn’t know what the interest rate and fees would be before financing a purchase with one of the services. And only about a third told The Motley Fool they understand BNPL very well.

“People don’t always know what the financial risks are,” says Kathleen Blum, vice president of shopper insights for C+R Research. “They aren’t paying attention to the fine print terms because they don’t think they’ll ever need to or because they don’t plan on missing a repayment.”

Overspending Pain

The simplicity of the application and approval process, though, makes it easy for consumers to get in over their heads. Since many of the services do not check your credit file, there are few safeguards when it comes to whether you can truly afford to repay the loan, given other bills and debts you have to pay.

“Whereas the old-style layaway installment loans were typically used for the occasional big purchase, people can quickly become regular users of BNPL for everyday discretionary buying,” the CFBP said in announcing its investigation. “If a consumer has multiple purchases on multiple schedules with multiple companies, it may be hard to keep track of when payments are scheduled.”

In fact, almost six in 10 BNPL users told C+R Research that they regretted a purchase because the item was too expensive. And a third say they’ve missed at least one payment, according to Credit Karma.

Fail to pay on time and many providers charge late fees. Klarna has a $7 fee per missed payment, while Zip takes $5 to $10, depending on your state. Even when borrowing with companies like Affirm and PayPal, which don’t have such fees, missing payments can still damage your credit score if they report the unpaid loan to debt collectors and credit bureaus and affect your ability to get another loan. Credit Karma found that 72 percent of people who paid late saw their credit scores drop.

While the majority of users pay back their loans on time, BNPL does push people to spend more, compared to other forms of payment. When a store offers a BNPL option, research from Aite-Novarica Group found, the average bill jumps 40 percent.

The reason is partly psychological. When transactions are broken down into four or more small payments as these services do, consumers trick themselves into thinking they’re spending less. You know the shoes cost $150, for example, but because the bill says $37.50, you rationalize that you only have to shell out that much for now.

“These plans delay the present cost of the items we’re buying. Future losses always seem less scary than current ones and we always think we’ll be better off tomorrow,” says Carrie Rattle, a financial therapist who specializes in overshopping. “They play on consumers’ overconfidence in the future and the feeling that we have the ability to control the situation
because the payment seems like a small amount.”

One key difference between credit cards and BNPL plans that does help curtail debt accumulation: When consumers fail to make a payment or repay in full, they cannot use the service again until they do so. That said, because many companies don’t do credit checks or share info with other lenders, consumers can simply turn to other BNPL companies for new credit and then have several of these loans outstanding simultaneously.

“When you’re using BNPL for smaller purchases and doing so a lot, it can become a danger,” says Blum.

Impact on Credit Scores

Now that BNPL plans have gone mainstream, credit bureaus want this loan information better reflected in credit reports and are actively working on bringing that about. Equifax, for instance, announced in December, that it would standardize a process for reporting these loans and begin adding such data to consumers’ credit files likely this spring. The other two major credit bureaus, Experian and TransUnion, have also said they will be adding more BNPL data to their credit reports.

Equifax claims this will help lenders better decide whether to open new lines of credit to customers, while also rewarding BNPL users for their good repayment history—a change that could boost people’s FICO credit score, on average, 13 points to 21 points.

“Right now your credit is not really impacted by BNPL plans, unless you miss a payment or your debt is sent to collections,” says Francis Creighton, president and CEO of the Consumer Data Industry Association. “We think this is problematic. If you do pay on time nothing is reported. You get none of the upsides of repaying and correctly using these loans.”

Credit scoring models, like those operated by FICO and VantageScore, will also need to adjust, given that the current formula penalizes consumers for having several new credit inquiries in a short span of time and rewards longer loan-terms.

“If you use BNPL services, you might have seven loans at any one time. To traditional credit reporting, this looks like seven new loan applications but really it is more akin to seven charges on a credit card,” says Creighton. “We need to make sure this is adjusted correctly so people using the product as designed don’t get dinged for doing everything right.”

How to Buy Wisely

Buy now, pay later plans can be a great financial tool to help you afford necessary, but higher-cost items, especially if you nab a zero percent interest rate offer. And with rules surrounding how credit bureaus treat these loans changing, they can also be a smart way to build your credit history with less risk in the near future.

Still, as with all forms of borrowing, it is important to make sure you know the full terms of the loan before agreeing and feel comfortable meeting the required payments in light of your other ongoing expenses, like rent, mortgage payments or student loan bills.

Because BNPL payments follow their own schedule that commences on the day of your purchase, set up automatic payments and agree to receive reminders about upcoming bills. That way you won’t have to keep track of multiple repayments. Just be sure you have enough in your account when these services take an automatic payment or you could be hit with a $35 overdraft fee from your bank.

If you’re struggling to make a payment, call the lender before the due date to discuss possible solutions. Some services may allow you a grace period of a couple of days to before assessing the late fee, give you the option to extend or change the payment date, or offer hardship programs, if you, say, lose your job or experience a natural disaster.

Finally, experts caution that if you plan to spend a lot, or might need to return items, swipe the credit card instead. Your plastic comes with stronger consumer protections than BNPL plans, when it comes to disputed charges and may offer purchase protection if items are damaged or stolen, according to the CFPB. Says the agency: “Returning merchandise bought with BNPL can sometimes be complicated.” And who these days needs complicated?

WICHITA, Kan.–(BUSINESS WIRE)–CURO Group Holdings Corp. (NYSE: CURO) (“CURO” or the “Company”), a tech-enabled, omni-channel consumer finance company serving a full spectrum of non-prime and prime consumers in the U.S. and Canada, today announced financial results for its fourth quarter ended December 31, 2021.

“For CURO, 2021 was a remarkable year on many different levels,” said Don Gayhardt, CURO’s Chief Executive Officer. “Though COVID-19 responses and variants continued to create periods of uncertainty in its second year, we maintained our momentum of loan and earnings growth with solid credit performance. However, I’m most proud of our execution on multiple large-scale acquisition and financing initiatives that continued to transform CURO to a full spectrum lender with a meaningfully lower cost of debt capital in 2021 by nearly 175 bps.”

“The year began and ended with transformational acquisitions. The acquisition of Flexiti in March 2021 diversified our channel, loan and revenue mix by adding established POS financing capabilities and private label credit cards to our Direct Lending capabilities in Canada. We capped 2021 off with the acquisition of Heights Finance, which primarily serves near- and non-prime customers in 11 southern and mid-western states through 390 branches. The Heights acquisition is expected to accelerate our transition into longer-term, higher-balance and lower-rate credit products. Both the Heights and Flexiti acquisitions will solidify our position as a full spectrum non-prime and prime consumer lender in the U.S. and Canada and accelerate our long-term revenue and earnings growth prospects.”

“We also executed on key financing initiatives that made these acquisitions possible. We refinanced our senior secured notes in July 2021, reducing the interest rate by 75bps, increasing capacity, and extending the maturity date to 2028. We added $250 million to the senior secured notes in the fourth quarter to finance, in part, the Heights acquisition. At Flexiti, we increased the capacity of our existing warehouse facility and added securitization capacity, bringing total funding capacity for Flexiti to over C$1 billion.”

“We also monetized a portion of our investment in Katapult. When Katapult became public in June 2021, we received cash of $146.9 million and we now retain 25.2% fully diluted ownership in Katapult (NASDAQ: KPLT).”

“Despite the above transactions, we did not take our eye off the ball at our core businesses. Organic growth in our legacy gross loans receivable at U.S. and Canada Direct Lending during the year combined with growth at Canada POS Lending since the date of its acquisition was 41.4%. Our net-charge offs stabilized as growth continued in all segments, while delinquencies remained at historically low levels, in large part due to excellent credit quality at Flexiti. In late December 2021, we launched First Phase, our new credit card program, which we’ll begin rolling out across the U.S. in 2022. It will provide our non-prime customers with a Visa-branded credit card and a number of technology-enabled tools.”

“We added significantly to CURO’s transformation profile in 2021 but major acquisitions take a lot of work to achieve their long-term potential. I’ll close by saying that we will be intensely focused in 2022 on executing and realizing the value creation these opportunities represent.”

¹ Prior to the application of fair value adjustments for purchase accounting, acquired loans were $485 million.

Consolidated Summary Results – Unaudited

		Three Months Ended December 31,				Year Ended December 31,
(in thousands, except per share data)		2021	2020	Variance		2021	2020	Variance
Revenue		$ 224,319	$ 202,078	11.0 %		$ 817,843	$ 847,396	(3.5) %
Net revenue		130,679	132,246	(1.2) %		572,175	558,585	2.4 %
Company Owned gross loans receivable		1,548,318	553,722	179.6 %		1,548,318	553,722	179.6 %
Unrestricted cash		63,179	213,343	(70.4) %		63,179	213,343	(70.4) %
Net (loss) income		(28,879)	4,474	#		59,334	75,733	(21.7) %
Adjusted Net (Loss) Income (1)		(12,288)	8,556	#		41,679	74,328	(43.9) %
Diluted (Loss) Earnings per Share from continuing operations		($ 0.72)	$ 0.11	#		$ 1.38	$ 1.77	(22.0) %
Adjusted Diluted (Loss) Earnings per Share from continuing operations (1)(2)		($ 0.29)	$ 0.20	#		$ 0.97	$ 1.77	(45.2) %
EBITDA (1)		(1,077)	31,063	#		204,846	170,550	20.1 %
Adjusted EBITDA (1)		16,545	34,332	(51.8) %		168,245	187,363	(10.2) %
Weighted Average Shares — diluted		40,254	42,579			43,143	42,091
Adjusted Weighted Average Shares — diluted (1)(2)		42,389	42,579			43,143	42,091
# – Variance greater than 100% or not meaningful
(1) These are non-GAAP metrics. For a reconciliation of each non-GAAP metric to the nearest GAAP metric, see the applicable reconciliations contained under “Results of Operations.” For a description of each non-GAAP metric, see “Non-GAAP Financial Measures.”
(2) We calculate Adjusted Diluted Earnings per Share utilizing diluted shares outstanding as of December 31, 2021. If we record a loss from continuing operations under U.S. GAAP, shares outstanding utilized to calculate Diluted Earnings per Share from continuing operations are equivalent to basic shares outstanding. Shares outstanding utilized to calculate Adjusted Earnings per Share from continuing operations reflect the number of diluted shares we would have reported if reporting Net income from continuing operations under U.S. GAAP.

On December 27, 2021, we completed the previously announced acquisition of SouthernCo, Inc., a Delaware corporation d/b/a Heights Finance (“Heights”), which resulted in the addition of loans receivable of approximately $472 million in our U.S. segment, after the application of preliminary fair value purchase accounting adjustments, which created a discount on the acquired portfolio. Given the timing of the acquisition, the impact on the Consolidated Statement of Operations for the fourth quarter of 2021 was immaterial. The acquired balance sheet has been included, after the preliminary estimated effect of purchase accounting adjustments, in the Consolidated Balance Sheet as of December 31, 2021.

We reported Net loss of $28.9 million ($0.72 loss per share) for the three months ended December 31, 2021, primarily due to (i) upfront provisioning for loan losses on rapid customer growth late in the quarter in Canada POS Lending, sequential loan growth across our other lines of business, and new customer, channel mix and seasonality which affected NCO rates, (ii) an increase in operating expenses primarily for investments in the continued growth of Canada POS Lending, and (iii) costs associated with the acquisition of Heights. We reported Adjusted Net Loss of $12.3 million ($0.29 adjusted diluted loss per share) on revenue of $224.3 million for the three months ended December 31, 2021. For the year ended December 31, 2021, we reported Net income of $59.3 million ($1.38 diluted earnings per share) and Adjusted Net Income of $41.7 million ($0.97 adjusted diluted earnings per share) on revenue of $817.8 million.

Below are additional highlights of our performance during the three months and year ended December 31, 2021:

• Loans Receivable
  • Year-over-year growth in Company Owned gross loans receivable and combined gross loans receivable of $994.6 million, or 179.6%, and $996.8 million, or 166.7%, respectively, including Flexiti and Heights. Excluding loans acquired on March 10, 2021 and December 27, 2021, gross combined loans receivables increased $329.0 million, or 41.4%.
  • Canada Direct Lending gross loans receivable grew $96.9 million, or 29.3%, year over year and $36.4 million, or 9.3%, sequentially (described within this release as the change from the third quarter to the fourth quarter).
  • Canada POS Lending gross loans receivable were $459.2 million as of December 31, 2021. Sequentially, Canada POS Lending gross loans receivable grew $156.8 million, or 51.9%, primarily driven by the onboarding of Leon’s Furniture Limited (“LFL”), Canada’s largest home furnishings retailer, and holiday seasonal demand.
  • U.S. Company Owned gross loans receivable, excluding Heights, declined $33.1 million, or 14.8%, year over year. The decline was due to (i) regulatory changes impacting certain loan products in California effective January 1, 2020; in Virginia effective January 1, 2021; and in Illinois effective March 23, 2021, and (ii) the discontinuation of Verge Credit in April 2021. These impacted loans are collectively referred to as “Runoff Portfolios” throughout the remainder of this release. Excluding Runoff Portfolios, U.S. Company Owned gross loans receivable grew $22.1 million, or 14.9%, compared to the prior year, and $11.6 million, or 7.3%, sequentially.

• Revenue and Net Revenue
  • For the three months ended December 31, 2021, revenue increased $22.2 million, or 11.0%, year over year. Sequentially, revenue increased $15.0 million, or 7.2%, primarily driven by growth of $7.3 million, or 5.6% in the U.S., $3.4 million, or 29.5%, in Canada POS Lending and $4.3 million, or 6.6%, in Canada Direct Lending.
  • For the three months ended December 31, 2021, net revenue decreased $1.6 million, or 1.2%, year over year and decreased $7.9 million, or 5.7%, sequentially. The sequential decline in net revenue was due to upfront loan loss provisioning on accelerated sequential loan growth and higher NCO rate trends from new customer mix in originations, seasonality and channel origination mix shifts. Consolidated lending provision for loan losses, excluding Heights, exceeded NCOs by $14.9 million compared to both $6.8 million in the third quarter of 2021 and $4.8 million in the fourth quarter of 2020.

• NCOs and Delinquency Metrics
  • Consolidated quarterly NCO rates, excluding Heights, improved year over year by 220 bps, primarily from the relative growth of Canada POS Lending, which shifts portfolio mix to lower loss-rate products. Sequentially, consolidated quarterly NCO rates increased 100 bps due to relative loan growth, new customer mix in originations, seasonality and channel origination mix shifts.
  • Quarterly NCO rates for U.S., excluding Heights, increased 340 bps year over year and 275 bps sequentially, primarily driven by the aforementioned customer and origination channel mix shifts and diminishing COVID-19 Impacts, as defined later in this release. U.S. NCO rates remained 80 bps below the fourth quarter of 2019.
  • Quarterly NCO rates for Canada Direct Lending increased 85 bps year over year and 110 bps sequentially as product demand for Revolving LOC continues to hold steady, but remained 240 bps below the fourth quarter of 2019.
  • For the three months ended December 31, 2021, Canada Direct Lending past-due rate increased sequentially 200 bps, or 32.1%, due to growth and seasonality. U.S. past-due rate, including loans Guaranteed by the Company, improved sequentially by 75 bps, or 3.4%.

• Other Highlights
  • On December 27, 2021, we completed our acquisition of Heights for $360.0 million, consisting of $335.0 million of cash and $25.0 million of common stock. Heights is a consumer finance company with 390 branches across 11 U.S. states that provides secured and unsecured Installment loans to near-prime and non-prime consumers as well as customary opt-in insurance and other financial products. Heights’ secured Installment loan portfolios are secured by both automobiles and, in some instances, non-essential household goods. The gross loans receivable and related revenue are included within the U.S. Installment loan portfolios.
  • Katapult’s merger with FinServ Acquisition Corp. (“FinServ”) closed on June 9, 2021. We received cash of $146.9 million and recorded a one-time gain of $135.4 million. During the fourth quarter of 2021, we acquired an additional 2.6 million shares of common stock of Katapult for an aggregate purchase price of $10.0 million, which increased our fully diluted ownership, including potential earn-out shares, from 19.3% to 25.2% as of December 31, 2021.
  • On December 9, 2021, we announced the closing of a new C$526.5 million asset-backed revolving credit facility (“Non-Recourse Flexiti Securitization Facility”) to provide financing for Canada receivables generated under Canada POS Lending.
  • On November 12, 2021, we increased the capacity of our Non-Recourse Canada SPV Facility from C$175.0 million to C$350.0 million.
  • On July 30, 2021, we closed $750.0 million of 7.50% Senior Secured Notes due 2028. The proceeds were used: (i) to redeem our 8.25% Senior Secured Notes due 2025, (ii) to pay related fees, expenses, premiums and accrued interest and (iii) for general corporate purposes. This refinancing extended maturities and increased our borrowing capacity while maintaining related borrowing costs at levels under the $690.0 million 8.25% Senior Secured Notes. In connection with funding the Heights acquisition, we issued $250.0 million in aggregate principal amount of 7.50% Senior Secured Notes due 2028.
  • We closed and consolidated 49 U.S. stores, representing approximately a quarter of all U.S. stores, during the second and third quarters of 2021 to better align with changing customer trends, preferences for online transactions and certain states’ regulatory considerations. The impacted locations generated 8% of our U.S. store revenue in 2020.
  • Effective July 1, 2021, Flexiti commenced a 10-year agreement to become the exclusive POS financing partner to LFL, which operates over 300 stores in Canada under multiple banners including Leon’s and The Brick.
  • Under the terms of our $50.0 million share repurchase program announced in April 2021, we purchased 3,037,699 shares for $49.9 million through February 7, 2022.
  • We completed our acquisition of Flexiti on March 10, 2021.
  • Declaration of the next quarterly dividend of $0.11 per share, payable on March 1, 2022 to stockholders of record as of February 18, 2022.
  • Authorization by our Board of Directors of a new share repurchase program for the repurchase of up to $25.0 million of CURO common stock. The repurchase will commence at our discretion and continue until completed or terminated. We expect the purchases to be made from time-to-time in the open market and/or in privately-negotiated transactions at our discretion, subject to market conditions and other factors. Any repurchased shares will be available for use in connection with equity plans and for other corporate purposes.

From the second quarter of 2020 through the first half of 2021, we experienced lower customer demand in the U.S. and Canada Direct Lending, good credit performance, increased or accelerated repayments and favorable payment trends as customers were aided by government stimulus programs while periodically enduring pandemic lockdowns (collectively “COVID-19 Impacts”). In the third and fourth quarters of 2021, our markets were less affected by COVID-19 Impacts, resulting in positive growth trends in revenue and receivables.

Consolidated Revenue by Product and Segment

The following table summarizes revenue by product, including revenue we earn from operating as a credit services organization (“CSO”) by charging a customer a fee for arranging an unrelated third party to make a loan to that customer, which we refer to as “CSO fees”, for the period indicated:

		Three Months Ended
		December 31, 2021						December 31, 2020
(in thousands, unaudited)		U.S.	Canada Direct Lending	Canada POS Lending	Total	% of Total		U.S.	Canada Direct Lending	Canada POS Lending	Total	% of Total
Revolving LOC		$ 27,911	$ 43,943	$ 13,704	$ 85,558	38.1 %		$ 31,111	$ 31,962	$ —	$ 63,073	31.2 %
Installment		107,606	11,416	—	119,022	53.1 %		111,899	11,106	—	123,005	60.9 %
Ancillary		3,485	15,170	1,084	19,739	8.8 %		3,578	12,422	—	16,000	7.9 %
Total revenue		$ 139,002	$ 70,529	$ 14,788	$ 224,319	100.0 %		$ 146,588	$ 55,490	$ —	$ 202,078	100.0 %

During the three months ended December 31, 2021, total revenue increased $22.2 million, or 11.0%, to $224.3 million, compared to the prior-year period. The year-over-year increase was primarily due to an increase in Canada Direct Lending revenue of $15.0 million, or 27.1%, and $14.8 million of Canada POS Lending revenue, which was acquired in March 2021. This increase was partially offset by a decrease in U.S. revenue of $7.6 million, or 5.2%, as a result of Runoff Portfolios. Excluding Runoff Portfolios, U.S. revenues increased $10.3 million, or 8.4% for the three months ended December 31, 2021 compared to the three months ended December 31, 2020.

Canada POS Lending revenue includes merchant discount revenue (“MDR”) for Flexiti, which is recognized over the life of the underlying loan term. For the three months ended December 31, 2021, Canada POS Lending results were impacted by acquisition-related adjustments that reduced total revenue by $1.7 million and net revenue by $4.2 million (“acquisition-related adjustments”). The acquisition included a loan portfolio with a fair value of approximately $196.1 million (“Acquired Portfolio”). The fair value discount of $12.5 million was based on estimated future net cash flows and is recognized in net revenue over the expected life of the Acquired Portfolio (approximately 12 months). This amortization resulted in an increase of $2.5 million for both revenue and loan loss provision for the three months ended December 31, 2021. The Acquired Portfolio also included $14.1 million of unearned MDR and annual and administrative fees, which are not amortized to revenue for the Acquired Portfolio because they did not represent future cash flows post acquisition. For the fourth quarter of 2021, Canada POS Lending revenue and net revenue were both lower by $4.2 million compared to what would have been otherwise reported if the unearned MDR and fees had been recognized over the expected life of the Acquired Portfolio. The acquisition-related adjustments related to the unearned MDR, annual and administrative fees will decline each quarter, until becoming fully amortized by the end of the first quarter of 2022.

The table below recaps acquisition-related adjustments to Canada POS Lending’s revenue and net revenue for the periods indicated:

	Three Months Ended December 31, 2021						Year Ended December 31,
(in thousands, unaudited)	Canada POS Lending		Acquisition- related adjustments		Adjusted Canada POS Lending		Canada POS Lending		Acquisition- related adjustments		Adjusted Canada POS Lending
Interest income	$ 7,921		$ (2,499)	(1)	$ 5,422		$ 22,335		$ (6,614)	(1)	$ 15,721
Other revenue	6,867		4,151	(2)	11,018		12,506		14,074	(2)	26,580
Total revenue	$ 14,788		$ 1,652		$ 16,440		$ 34,841		$ 7,460		$ 42,301
Provision for losses	12,511		(2,499)	(1)	10,012		24,638		(6,444)	(1)	18,194
Net revenue	$ 2,277		$ 4,151		$ 6,428		$ 10,203		$ 13,904		$ 24,107
(1) Acquisition-related adjustments for interest income and provision for losses relate to the amortization of the fair value discount of the Acquired Portfolio.
(2) Acquisition-related adjustments for other revenue represents the unearned MDR and annual and administrative fees, which were not included in the opening balance sheet as they did not represent future cash flows as of March 10, 2021, and thus, are not amortized to revenue for the Acquired Portfolio. The acquisition-related adjustments related to the unearned MDR and annual and administrative fees will decline each quarter with the Acquired Portfolio and will be fully amortized by the end of the first quarter of 2022.

From a product perspective, Revolving LOC revenue for the three months ended December 31, 2021 increased $22.5 million, or 35.6%, year over year, primarily driven by growth in Canada Direct Lending revenue of $12.0 million, or 37.5%, and Canada POS lending of $13.7 million, partially offset by a decline in U.S. revenue of $3.2 million, or 10.3%. Excluding the effects of the Runoff Portfolios, U.S. Revolving LOC revenue increased $2.0 million, or 8.1%, for the three months ended December 31, 2021 compared to the prior-year period.

For the three months ended December 31, 2021, Installment revenue decreased $4.0 million, or 3.2%, compared to the prior-year period. Excluding the Runoff Portfolios, Installment revenue increased $8.7 million, or 8.3%, for the three months ended December 31, 2021 compared to the prior-year period.

Ancillary revenue increased $3.7 million, or 23.4%, versus the prior-year period, primarily due to the sale of insurance products to Revolving LOC and Installment loan customers in Canada.

The following table summarizes revenue by product, including CSO fees, for the period indicated:

		For the Year Ended
		December 31, 2021						December 31, 2020
(in thousands, unaudited)		U.S.	Canada Direct Lending	Canada POS Lending	Total	% of Total		U.S.	Canada Direct Lending	Canada POS Lending	Total	% of Total
Revolving LOC		$ 106,302	$ 156,000	$ 32,289	$ 294,591	36.0 %		$ 134,449	$ 115,053	$ —	$ 249,502	29.4 %
Installment		405,409	43,735	—	449,144	54.9 %		489,057	49,628	—	538,685	63.6 %
Ancillary		14,251	57,304	2,553	74,108	9.1 %		15,018	44,191	—	59,209	7.0 %
Total revenue		$ 525,962	$ 257,039	$ 34,842	$ 817,843	100.0 %		$ 638,524	$ 208,872	$ —	$ 847,396	100.0 %

For the year ended December 31, 2021, total revenue declined $29.6 million, or 3.5%, to $817.8 million, compared to the prior year. Excluding Runoff Portfolios, total revenue for the year ended December 31, 2021 increased $33.7 million, or 4.6%, compared to the prior year. Geographically, U.S. revenues declined 17.6% year over year (9.5% excluding Runoff Portfolios) largely due to COVID-19 Impacts, while Canada Direct Lending revenues increased 23.1% due to the continued popularity and growth of Revolving LOC loans. For the year ended December 31, 2021, Canada POS Lending revenue was $34.8 million, inclusive of acquisition-related adjustments which reduced total revenue by $7.5 million.

As described above, certain acquisition-related adjustments related to the amortization of the fair value discount on acquired loans receivable increased Canada POS Lending revenue and net revenue for the year ended December 31, 2021 by $6.6 million and $0.2 million, respectively. For the year ended December 31, 2021, Canada POS Lending revenue and net revenue were both lower by $14.1 million compared to what would have been reported if the unearned MDR and fees had been recognized over the expected life of the Acquired Portfolio.

From a product perspective, Revolving LOC revenues increased $45.1 million, or 18.1%, compared to the prior year, primarily due to growth in Canada Direct Lending revenue of $40.9 million, or 35.6%, and Canada POS Lending of $32.3 million, partially offset by declines in U.S. revenue of $28.1 million, or 20.9%. Excluding Runoff Portfolios, U.S. Revolving LOC revenue decreased $1.6 million, or 1.6%, for the year ended December 31, 2021 compared to the prior year.

For the year ended December 31, 2021, Installment revenues decreased $89.5 million, or 16.6%, compared to the prior year. Excluding Runoff Portfolios, Installment revenue decreased $52.9 million, or 11.6%, primarily as a result of COVID-19 related constraints on demand and the continued shift to Revolving LOC loans.

Ancillary revenues increased $14.9 million, or 25.2%, versus the prior year from the sale of insurance products to Revolving LOC and Installment loan customers in Canada.

The following table presents online revenue and online transaction compositions, including CSO fees, of the products and services that we currently offer within the U.S., excluding Heights, and Canada Direct Lending segments:

		Three Months Ended December 31,				Year Ended December 31,
		2021		2020		2021		2020
Online revenue as a percentage of consolidated revenue		50.5 %		50.9 %		50.5 %		48.5 %
Online transactions as a percentage of consolidated transactions		61.5 %		58.5 %		60.8 %		54.7 %

Online revenue as a percentage of consolidated revenue was stable for the three months ended December 31, 2021 compared to the prior-year period. For the year ended December 31, 2021, online revenue as a percentage of consolidated revenue increased as a result of our store closures during the second and third quarters of 2021, as well as the continued transition of customers to our online channel.

Consolidated Loans Receivable

The following table reconciles Company Owned gross loans receivable, a GAAP-basis balance sheet measure, to Gross combined loans receivable, a non-GAAP measure⁽¹⁾. Gross combined loans receivable includes loans originated by third-party lenders through CSO programs, which are not included in the Consolidated Financial Statements but from which we earn revenue by providing a guarantee to the unaffiliated lender.

				As of
(in thousands, unaudited)		December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021		December 31, 2020
U.S.
Revolving LOC		$ 52,532		$ 51,196		$ 47,277		$ 43,387		$ 55,561
Installment – Company Owned		609,413		137,987		139,234		142,396		167,890
Canada Direct Lending
Revolving LOC		402,405		366,509		337,700		319,307		303,323
Installment		24,792		24,315		23,564		24,385		26,948
Canada POS Lending
Revolving LOC		459,176		302,349		221,453		201,539		—
Company Owned gross loans receivable		$ 1,548,318		$ 882,356		$ 769,228		$ 731,014		$ 553,722
Gross loans receivable Guaranteed by the Company		46,317		43,422		37,093		32,439		44,105
Gross combined loans receivable (1)		$ 1,594,635		$ 925,778		$ 806,321		$ 763,453		$ 597,827
(1) See “Non-GAAP Financial Measures” at the end of this release for definition and more information.

Gross combined loans receivable increased $996.8 million, or 166.7%, to $1,594.6 million as of December 31, 2021, from $597.8 million as of December 31, 2020. Gross combined loans receivables as of December 31, 2021 included $196.1 million and approximately $472 million of receivables acquired on the date of acquisition of Flexiti and Heights, respectively. Canada POS Lending has continued to grow rapidly throughout the year, particularly beginning in July 2021 with Flexiti beginning its exclusive POS financing partnership with LFL Group. In addition, the holiday season drove $114.4 million of Canada POS Lending loan growth in November and December. Excluding loans acquired on March 10, 2021 and December 27, 2021, gross combined loans receivables increased $329.0 million, or 41.4%, primarily driven by Canada Direct Lending growth of $96.9 million, or 29.3%. U.S. gross combined loans receivable, excluding Heights, decreased $30.9 million, or 11.6%, primarily due to (i) COVID-19 Impacts and (ii) the aforementioned Runoff Portfolios. Excluding Runoff Portfolios and gross loans receivables acquired with Heights, U.S. gross combined loans receivable grew $24.3 million, or 12.6%.

Sequentially, gross combined loans receivable increased $668.9 million, or 72.2%. Geographically, U.S. grew sequentially by $475.7 million, or 204.5%, as a result of our acquisition of Heights, which accounted for approximately $472 million of loans receivable as of December 31, 2021. Canada grew sequentially by $193.2 million, or 27.9%, primarily driven by Canada POS Lending growth of $156.8 million, or 51.9%, and Canada Direct Lending Revolving LOC growth of $35.9 million, or 9.8%. Excluding Heights, gross combined loans receivable increased $197.2 million, or 21.3%, sequentially, as consumer demand increased in the fourth quarter. Gross combined loans receivable performance by product and segment is described further in the following sections.

Results of Consolidated Operations

Beginning December 31, 2021, we changed our presentation of operating expenses on our Statements of Operations. The December 31, 2020 presentation has been revised to conform to the current year presentation. Refer to the comparison of “Three Months Ended December 31, 2021 and 2020” below for a description of expenses included within each operating expense line item.

Consolidated Statements of Operations

(in thousands, unaudited)		Three Months Ended December 31,					Year Ended December 31,
		2021	2020	Change $	Change %		2021	2020	Change $	Change %
Revenue		$ 224,319	$ 202,078	$ 22,241	11.0 %		$ 817,843	$ 847,396	($ 29,553)	(3.5) %
Provision for losses		93,640	69,832	23,808	34.1 %		245,668	288,811	(43,143)	(14.9) %
Net revenue		130,679	132,246	(1,567)	(1.2) %		572,175	558,585	13,590	2.4 %
Operating Expenses
Salaries and benefits		61,762	52,578	9,184	17.5 %		237,109	196,817	40,292	20.5 %
Occupancy		13,698	14,870	(1,172)	(7.9) %		55,559	57,271	(1,712)	(3.0) %
Advertising		13,938	12,158	1,780	14.6 %		38,762	44,552	(5,790)	(13.0) %
Direct operations		19,504	11,119	8,385	75.4 %		60,056	46,893	13,163	28.1 %
Depreciation and amortization		7,270	4,186	3,084	73.7 %		26,955	17,498	9,457	54.0 %
Other operating expense		25,836	12,351	13,485	109.2 %		74,682	47,048	27,634	58.7 %
Total operating expenses		142,008	107,262	34,746	32.4 %		493,123	410,079	83,044	20.3 %
Other expense (income)
Interest expense		28,550	18,691	9,859	52.7 %		97,334	72,709	24,625	33.9 %
Income from equity method investment		(2,982)	(1,893)	(1,089)	57.5 %		(3,658)	(4,546)	888	(19.5) %
Gain from equity method investment		—	—	—	#		(135,387)	—	(135,387)	#
Loss on extinguishment of debt		—	—	—	#		40,206	—	40,206	#
Total other expense (income)		25,568	16,798	8,770	52.2 %		(1,505)	68,163	(69,668)	#
(Loss) income from continuing operations before income taxes		(36,897)	8,186	(45,083)	#		80,557	80,343	214	0.3 %
(Benefit) provision for incomes taxes		(8,018)	3,712	(11,730)	#		21,223	5,895	15,328	#
Net (loss) income from continuing operations		(28,879)	4,474	(33,353)	#		59,334	74,448	(15,114)	(20.3) %
Net income from discontinued operations, net of tax		—	—	—	#		—	1,285	(1,285)	#
Net (loss) income		($ 28,879)	$ 4,474	($ 33,353)	#		$ 59,334	$ 75,733	($ 16,399)	(21.7) %
# – Variance greater than 100% or not meaningful

Reconciliation of Net (Loss) Income from Continuing Operations and Diluted (Loss) Earnings per Share to Adjusted Net (Loss) Income and Adjusted Diluted (Loss) Earnings per Share, non-GAAP measures

(in thousands, except per share data, unaudited)		Three Months Ended December 31,					For the Year Ended December 31,
		2021	2020	Change $	Change %		2021	2020	Change $	Change %
Net (loss) income from continuing operations		($ 28,879)	$ 4,474	($ 33,353)	#		$ 59,334	$ 74,448	($ 15,114)	(20.3) %
Adjustments:
Restructuring costs (1)		1,303	—				12,717	—
Legal and other costs (2)		1,764	146				2,134	2,925
Income from equity method investment (3)		(2,982)	(1,893)				(3,658)	(4,546)
Gain from equity method investment (4)		—	—				(135,387)	—
Transaction costs (5)		8,924	2,014				15,406	2,737
Acquisition-related adjustments (6)		4,162	—				13,949	—
Change in fair value of contingent consideration (7)		2,384	—				6,209	—
Loss on extinguishment of debt (8)		—	—				42,262	—
Share-based compensation (9)		3,828	3,014				13,976	12,910
Intangible asset amortization (10)		1,811	705				6,282	2,951
Canada GST adjustment (11)		—	—				—	2,160
Income tax valuations (12)		—	—				—	(3,472)
Impact of tax law changes (13)		—	—				—	(11,251)
Cumulative tax effect of adjustments (14)		(4,603)	96				8,455	(4,534)
Adjusted Net (Loss) Income		($ 12,288)	$ 8,556	($ 20,844)	#		$ 41,679	$ 74,328	($ 32,649)	(43.9) %
Net (loss) income from continuing operations		($ 28,879)	$ 4,474				$ 59,334	$ 74,448
Diluted Weighted Average Shares Outstanding		40,254	42,579				43,143	42,091
Adjusted Diluted Average Shares Outstanding		42,389	42,579				43,143	42,091
Diluted (Loss) Earnings per Share from continuing operations		($ 0.72)	$ 0.11	($ 0.83)	#		$ 1.38	$ 1.77	($ 0.39)	(22.0) %
Per Share impact of adjustments to Net income from continuing operations		0.43	0.09				(0.41)	—
Adjusted Diluted (Loss) Earnings per Share		($ 0.29)	$ 0.20	($ 0.49)	(245.0) %		$ 0.97	$ 1.77	($ 0.80)	(45.2) %
Note: Footnotes follow Reconciliation of Net (loss) income table on the next page

Reconciliation of Net (Loss) Income from Continuing Operations to EBITDA and Adjusted EBITDA, Non-GAAP Measures

		Three Months Ended December 31,					For the Year Ended December 31,
(in thousands, unaudited)		2021	2020	Change $	Change %		2021	2020	Change $	Change %
Net (loss) income from continuing operations		($ 28,879)	$ 4,474	($ 33,353)	#		$ 59,334	$ 74,448	($ 15,114)	(20.3) %
(Benefit) provision for income taxes		(8,018)	3,712	(11,730)	#		21,223	5,895	15,328	#
Interest expense		28,550	18,691	9,859	52.7 %		97,334	72,709	24,625	33.9 %
Depreciation and amortization		7,270	4,186	3,084	73.7 %		26,955	17,498	9,457	54.0 %
EBITDA		(1,077)	31,063	(32,140)	#		204,846	170,550	34,296	20.1 %
Restructuring costs (1)		1,303	—				12,717	—
Legal and other costs (2)		1,764	146				2,134	2,925
Income from equity method investment (3)		(2,982)	(1,893)				(3,658)	(4,546)
Gain from equity method investment (4)		—	—				(135,387)	—
Transaction costs (5)		7,258	2,014				13,740	2,737
Acquisition-related adjustments (6)		4,162	—				13,949	—
Change in fair value of contingent consideration (7)		2,384	—				6,209	—
Loss on extinguishment of debt (8)		—	—				40,206	—
Share-based compensation (9)		3,828	3,014				13,976	12,910
Canada GST adjustment (11)		—	—				—	2,160
Other adjustments (15)		(95)	(12)				(487)	627
Adjusted EBITDA		$ 16,545	$ 34,332	($ 17,787)	(51.8) %		$ 168,245	$ 187,363	($ 19,118)	(10.2) %
Adjusted EBITDA Margin		7.4 %	17.0 %				20.6 %	22.1 %
# – Change greater than 100% or not meaningful

(1)		Restructuring costs for the three months and year ended December 31, 2021 resulted from U.S. store closures and consisted of (i) severance costs for store employees, (ii) lease termination costs, and (iii) accelerated depreciation, partially offset by the net write-off of right-of-use (“ROU”) assets and lease liabilities.
(2)		Legal and other costs for the three months and year ended December 31, 2021 primarily related to fees incurred in certain legal matters in which CURO was the plaintiff. No further costs are expected for that case. Legal and other costs for the three months and year ended December 31, 2020 included (i) settlement costs related to certain legal matters (ii) costs for certain securities litigation and related matters and (iii) severance costs for certain corporate employees separate from restructuring costs.
(3)		The amount reported is our share of Katapult’s U.S. GAAP net income, recognized on a one quarter lag.
(4)		During the year ended December 31, 2021, we recorded a gain on our investment in Katapult of $135.4 million. The gain represents cash we received, net of the basis of our investment in Katapult, upon the completion of the business combination between Katapult and FinServ.
(5)		Transaction costs for the year ended December 31, 2021 in determining AEBITDA and ANI relate to (i) our Heights acquisition in December 2021, (ii) our Flexiti acquisition in March 2021, and (iii) the Katapult and FinServ business combination in June 2021. Transaction costs in determining ANI for the year ended December 31, 2021 also included prepayment fees of $1.7 million for our Non-Recourse Flexiti SPE Facility in connection to the signing of the Non-Recourse Flexiti Securitization Facility in December 2021. Transaction costs for the year ended December 30, 2020 relate to the acquisition of Ad Astra and legal and advisory costs related to the Flexiti acquisition.
(6)		During the three months and year ended December 31, 2021, $4.2 million and $13.9 million, respectively, of acquisition-related adjustments relate to the acquired Flexiti loan portfolio as of March 10, 2021. Refer to “Consolidated Revenue by Product and Segment” for additional details.
(7)		In connection with our acquisition of Flexiti, we recorded a $2.4 million and $6.2 million adjustment related to the fair value of the contingent consideration for the three months and year ended December 31, 2021, respectively.
(8)		On July 30, 2021, we entered into new 7.50% Senior Secured Notes due 2028, which were used on August 12, 2021 to extinguish the 8.25% Senior Secured Notes due 2025. During the year ended December 31, 2021, $40.2 million from the loss on the extinguishment of debt in determining Adjusted EBITDA was due to the early redemption of the 8.25% Senior Secured Notes due 2025. An additional $2.1 million of interest was incurred for the year ended December 31, 2021 in determining Adjusted Net income, which represents interest on the 8.25% Senior Secured Notes due 2025 for the period between July 30, 2021 and August 12, 2021. This is the period during which the 8.25% Senior Secured Notes and 7.50% Senior Secured Notes were both outstanding.
(9)		The estimated fair value of share-based awards was recognized as non-cash compensation expense on a straight-line basis over the vesting period.
(10)		Intangible asset amortization in the determining ANI for the year ended December 31, 2021 primarily included amortization of identifiable intangible assets established in connection with the acquisition of Flexiti.
(11)		We received a Notice of Adjustment from Canadian tax authority auditors in the second quarter 2020 related to the treatment of certain expenses in prior years for purposes of calculating the Goods and Services Tax (“GST”) due.
(12)		During the year ended December 31, 2020, a Texas court ruling related to the apportionment of income to the state for an unrelated company resulted in a change in estimate regarding the realization of a tax benefit previously taken. Accordingly, we recorded a $1.1 million liability for our estimated exposure related to this position, which was settled in April 2021. Also in the year ended December 31, 2020, we released a $4.6 million valuation allowance related to Net Operating Losses (“NOLs”) for certain entities in Canada.
(13)		On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was enacted by the U.S. Federal government in response to the COVID-19 pandemic. The CARES Act, among other things, allows NOLs incurred in 2018, 2019 and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. For the year ended December 31, 2020, we recorded an income tax benefit of $11.3 million related to the carryback of NOL from tax years 2018 and 2019.
(14)		Cumulative tax effect of adjustments included in Reconciliation of Net (loss) income from continuing operations Adjusted Net (Loss) Income table is calculated using the estimated incremental tax rate by country.
(15)		Other adjustments primarily reflect the intercompany foreign-currency exchange impact.

For the Three Months Ended December 31, 2021 and 2020

Revenue and Net Revenue

For a discussion of revenue, see “Consolidated Revenue by Product and Segment” above.

Provision for losses increased by $23.8 million, or 34.1%, for the three months ended December 31, 2021 compared to the prior-year period, primarily driven by upfront provisioning on rapid customer growth late in the quarter in Canada POS Lending and higher past-due rates and NCO rates year over year in Canada Direct Lending. Refer to “Loan Volume and Portfolio Performance Analysis” and “Segment Analysis” sections below for additional details.

Operating Expenses

Salaries and benefits, which consist of salaries and personnel-related costs, including benefits, bonuses and share-based compensation expense, were $61.8 million for the three months ended December 31, 2021, an increase of $9.2 million, or 17.5%, compared to the prior-year period. Excluding costs associated with Canada POS Lending, salaries and benefits increased $3.1 million, or 5.9%, primarily due to timing and level of performance-based variable compensation.

Occupancy costs, which include rent expense on our leased facilities and equipment, utilities, insurance and certain maintenance expenses, were $13.7 million for the three months ended December 31, 2021, a decrease of $1.2 million, or 7.9%, compared to the prior-year period. Excluding costs associated with Canada POS Lending, occupancy costs decreased $1.4 million, or 9.5%, primarily due to store closures in the U.S. during the second and third quarters of 2021.

Advertising costs increased $1.8 million, or 14.6%, year over year in response to product demand changes. Excluding costs associated with Canada POS Lending, advertising costs increased $1.0 million, or 8.1%. The prior year was influenced by COVID-19 Impacts and pandemic-induced lockdowns.

Direct operations, which include all expenses associated with the direct operations and technology infrastructure related to loan underwriting, collections and processing, were $19.5 million for the three months ended December 31, 2021, an increase of $8.4 million, or 75.4%, compared to the prior-year period. Excluding costs associated with Canada POS Lending, direct operations increased $1.6 million, or 14.2%, primarily due to higher consumer demand year over year, resulting in higher collection and processing costs.

Depreciation and amortization expense for the three months ended December 31, 2021 increased $3.1 million, or 73.7%, compared to the prior-year period. Excluding costs associated with Canada POS Lending, depreciation and amortization expense decreased $0.2 million, or 5.4%. primarily due store closures in the U.S. during the second and third quarters of 2021.

Other operating expenses, which include office expenses, legal and professional fees, and certain store closure costs, were $25.8 million for the three months ended December 31, 2021, an increase of $13.5 million, or 109.2%, compared to the prior-year period. Excluding costs associated with Canada POS Lending, other operating expenses increased $9.2 million, or 74.6%, primarily driven by (i) $7.3 million of transaction costs related to our acquisition of Heights in the fourth quarter of 2021 and (ii) $1.0 million of certain store closure costs in the U.S., as further described in “Segment Analysis” below.

Other Expense (Income)

Interest Expense

Interest expense for the three months ended December 31, 2021 increased $9.9 million, or 52.7%, compared to the prior-year period, primarily related to (i) interest on debt acquired with the acquisition of Flexiti, (ii) interest expense associated with our additional $250.0 million issuance of our 7.50% Senior Secured Notes, and (iii) higher year-over-year interest on our Non-Recourse U.S. SPV Facility.

Equity Method Investment

We account for our investment in Katapult using the equity method of accounting. The investment is included in “Investments in Katapult” on the Consolidated Balance Sheet. Our share of Katapult’s earnings was $3.0 million for the three months ended December 31, 2021, which we recognize on a one-quarter lag. Those earnings included a gain from revaluing Katapult’s public and private warrant liability. During the fourth quarter of 2021, we purchased an additional 2.6 million of Katapult’s common stock for $10.0 million, which increased our ownership in Katapult from 19.3% to 25.2% on a fully diluted basis assuming full pay-out of earn-out shares as of December 31, 2021.

Provision for Income Taxes

The effective income tax rate for the three months ended December 31, 2021 was 21.7%. The effective income tax rate was lower than the blended federal and state/provincial statutory rate of approximately 26%, primarily as a result of proportionally more losses in lower-tax rate jurisdictions. In addition, we recorded an income tax benefit for share-based compensation of $0.6 million. These benefits were offset by nondeductible expenses related to the change in fair value of contingent consideration of $0.6 million and nondeductible transaction costs of $0.9 million. The effective income tax rate of adjusted tax expense included in Adjusted Net Loss for the three months ended December 31, 2021, was 21.7%.

For the Year Ended December 31, 2021 and 2020

Revenue and Net Revenue

For a discussion of revenue, see “Consolidated Revenue by Product and Segment” above.

Provision for losses decreased by $43.1 million, or 14.9%, for the year ended December 31, 2021 compared to the prior year. The decrease in provision for losses was primarily a result of lower average loan balances in the U.S. and multiple rounds of U.S. government stimulus associated with COVID-19, partially offset by provisioning on Canada Direct Lending growth and upfront loss provisioning on rapid customer receivables growth late in the quarter in Canada POS Lending. Refer to “Loan Volume and Portfolio Performance Analysis” and “Segment Analysis” sections below for additional details.

Operating Expenses

Salaries and benefits were $237.1 million for the year ended December 31, 2021, an increase of $40.3 million, or 20.5%, compared to the prior year. Excluding costs associated with Canada POS Lending, salaries and benefits increased $25.8 million, or 13.1%, primarily due to timing and level of performance-based variable compensation and personnel investments to support Canada Direct Lending growth.

Occupancy costs were $55.6 million for the year ended December 31, 2021, a decrease of $1.7 million, or 3.0%, compared to the prior year. Excluding costs associated with Canada POS Lending, occupancy costs decreased $2.2 million, or 3.9%, primarily due to store closures in the U.S. during the second and third quarters of 2021.

Advertising costs decreased $5.8 million, or 13.0% year over year, and $7.1 million, or 15.9%, excluding Canada POS Lending. The prior-year period included costs for Verge Installment loans which have since been suspended, as described further in “Segment Analysis” below.

Direct operations were $60.1 million for the year ended December 31, 2021, an increase of $13.2 million, or 28.1%, compared to the prior year. Excluding costs associated with Canada POS Lending, direct operations decreased $1.2 million, or 2.6%, primarily driven by lower collection fees in the U.S. due to lower year over year demand and multiple rounds of significant U.S. government stimulus associated with the COVID-19 pandemic.

Depreciation and amortization expense increased $9.5 million, or 54.0%, year over year. Excluding costs associated with Canada POS Lending, depreciation and amortization expense decreased $1.0 million, or 5.6%, primarily driven by our store closures in the U.S. during the second and third quarters of 2021.

Other operating expenses were $74.7 million for the year ended December 31, 2021, an increase of $27.6 million, or 58.7%, compared to the prior year. Excluding costs associated with Canada POS Lending, other operating expenses increased $17.8 million, or 37.9%, primarily due to (i) $13.7 million of transaction costs related to our acquisition of Flexiti in March 2021, our acquisition of Heights in December 2021, and the Katapult and FinServ merger in June 2021, and (ii) $8.8 million of certain restructuring costs related to our second and third quarter store closures in the U.S..

Other Expense (Income)

Interest Expense

Interest expense for the year ended December 31, 2021 increased $24.6 million, or 33.9%, primarily related to (i) interest on debt acquired as part of the acquisition of Flexiti, (ii) higher year-over-year interest on our Non-Recourse U.S. SPV Facility, and (iii) interest expense associated with the additional issuance of our 7.50% Senior Secured Notes. An additional $2.1 million of interest was incurred for the year ended December 31, 2021, which represents interest on the 8.25% Senior Secured Notes for the period between July 30, 2021 and August 12, 2021. This is the period during which both the 8.25% Senior Secured Notes and 7.50% Senior Secured Notes were outstanding.

Equity Method Investment

We recognize our share of Katapult’s earnings or loss on a one-quarter lag. Our share of Katapult’s earnings was $3.7 million for the year ended December 31, 2021, which included a gain from revaluing Katapult’s public and private warrant liability. During the fourth quarter of 2021, we purchased an additional 2.6 million of Katapult’s common stock for $10.0 million, which increased our ownership in Katapult from 19.3% to 25.2% on a fully diluted basis assuming full pay-out of earn-out shares as of December 31, 2021.

On June 9, 2021, Katapult completed its merger with FinServ. As part of the merger, we received cash consideration of $146.9 million and retained ownership through shares after the merger. As of December 31, 2021, our total cash investment in Katapult is $37.6 million.

Loss on Extinguishment of Debt

Loss on extinguishment of debt for the year ended December 31, 2021 was due to the redemption of the 8.25% Senior Secured Notes.

Provision for Income Taxes

The effective income tax rate for the year ended December 31, 2021 was 26.3%, consistent with the blended federal and state/provincial statutory rate of approximately 26%. The income tax expense includes nondeductible expense items related to the change in fair value of contingent consideration of $1.6 million, and nondeductible transaction costs of $1.2 million, partially offset by proportionally more net income in lower-tax rate jurisdictions, driven by the gain on the Katapult transaction of $146.9 million in the second quarter of 2021 and the loss on extinguishment of debt of $40.2 million in the third quarter of 2021.

Additionally, income tax expense includes the release of a valuation allowance of $0.4 million due to our share of Katapult’s income, tax benefits related to share-based compensation of $0.8 million, $0.2 million tax expense of additional Texas accrual for 2020 due to the settlement of 2013 to 2019 Texas returns, and a tax benefit of $0.9 million for the recognition of research and development tax credit.

The effective income tax rate of adjusted tax expense included in Adjusted Net Income for the year ended December 31, 2021 was 23.5%.

Segment Analysis

The following is a summary of portfolio performance and results of operations for the segment and period indicated (all periods unaudited except for Q4 2020).

U.S. Portfolio Performance

On December 27, 2021, we acquired Heights which accounted for approximately $472 million of U.S. Installment loans as of December 31, 2021. As the period between December 27, 2021 and December 31, 2021 did not result in material loan performance, we have excluded Heights from the table and related analysis below for the fourth quarter of 2021.

(in thousands, except percentages)		Q4 2021	Q3 2021	Q2 2021	Q1 2021		Q4 2020
Gross combined loans receivable (1)
Revolving LOC		$ 52,532	$ 51,196	$ 47,277	$ 43,387		$ 55,561
Installment loans – Company Owned		137,782	137,987	139,234	142,396		167,890
Total U.S. Company Owned gross loans receivable		190,314	189,183	186,511	185,783		223,451
Installment loans – Guaranteed by the Company (2)		46,317	43,422	37,093	32,439		44,105
Total U.S. gross combined loans receivable (1)		$ 236,631	$ 232,605	$ 223,604	$ 218,222		$ 267,556
Lending Revenue:
Revolving LOC		$ 27,911	$ 27,377	$ 24,091	$ 26,923		$ 31,111
Installment loans – Company Owned		56,820	57,659	55,918	64,516		68,927
Installment loans – Guaranteed by the Company (2)		47,348	43,377	34,908	41,425		42,972
Total U.S. lending revenue		$ 132,079	$ 128,413	$ 114,917	$ 132,864		$ 143,010
Lending Provision:
Revolving LOC		$ 11,592	$ 8,140	$ 6,621	$ 5,039		$ 11,583
Installment loans – Company Owned		18,618	16,792	14,048	11,159		24,629
Installment loans – Guaranteed by the Company (2)		25,967	23,146	12,583	9,648		22,621
Total U.S. lending provision		$ 56,177	$ 48,078	$ 33,252	$ 25,846		$ 58,833
Lending Net Revenue
Revolving LOC		$ 16,319	$ 19,237	$ 17,470	$ 21,884		$ 19,528
Installment loans – Company Owned		38,202	40,867	41,870	53,357		44,298
Installment loans – Guaranteed by the Company (2)		21,381	20,231	22,325	31,777		20,351
Total U.S. lending net revenue		$ 75,902	$ 80,335	$ 81,665	$ 107,018		$ 84,177
NCOs
Revolving LOC		$ 11,481	$ 8,329	$ 7,271	$ 9,904		$ 12,500
Installment loans – Company Owned		19,664	19,548	18,617	17,313		19,620
Installment loans – Guaranteed by the Company (2)		26,065	21,404	12,044	12,150		21,590
Total U.S. NCOs		$ 57,210	$ 49,281	$ 37,932	$ 39,367		$ 53,710
NCO rate (3)
Revolving LOC		22.1 %	16.9 %	16.0 %	20.0 %		22.3 %
Installment loans – Company Owned		14.3 %	14.1 %	13.2 %	11.2 %		12.4 %
Total U.S. Company Owned NCO rate		16.4 %	14.8 %	13.9 %	13.3 %		15.0 %
Installment loans – Guaranteed by the Company (2)		58.1 %	53.2 %	34.6 %	31.7 %		51.5 %
Total U.S. NCO rate		24.4 %	21.6 %	17.2 %	16.2 %		21.0 %
Allowance for loan losses (“ALL”) and CSO Liability for Losses (4)
Revolving LOC		$ 13,591	$ 13,480	$ 13,669	$ 14,319		$ 19,185
Installment loans – Company Owned		17,445	18,491	21,246	25,815		31,971
Installment loans – Guaranteed by the Company (2)		6,908	7,007	5,265	4,727		7,228
Total U.S. ALL and CSO Liability for Losses		$ 37,944	$ 38,978	$ 40,180	$ 44,861		$ 58,384
ALL and CSO Liability for Losses rate (5)
Revolving LOC		25.9 %	26.3 %	28.9 %	33.0 %		34.5 %
Installment loans – Company Owned		12.7 %	13.4 %	15.3 %	18.1 %		19.0 %
Total U.S. Company Owned ALL rate		16.3 %	16.9 %	18.7 %	21.6 %		22.9 %
Installment loans – Guaranteed by the Company (2)		14.9 %	16.1 %	14.2 %	14.6 %		16.4 %
Total ALL and CSO Liability for Losses rate		16.0 %	16.8 %	18.0 %	20.6 %		21.8 %
Past-due rate (5)
Revolving LOC		30.5 %	30.5 %	26.6 %	26.3 %		30.7 %
Installment loans – Company Owned		19.4 %	20.1 %	18.7 %	18.0 %		19.0 %
Total U.S. Company Owned past-due rate		22.5 %	22.9 %	20.7 %	19.9 %		21.9 %
Installment loans – Guaranteed by the Company (2)		17.7 %	19.8 %	17.4 %	12.8 %		14.1 %
(1) Non-GAAP measure. For a description of each non-GAAP metric, see “Non-GAAP Financial Measures.”
(2) Includes loans originated by third-party lenders through CSO programs. Installment gross loans receivable Guaranteed by the Company are not included in the Consolidated Financial Statements.
(3) We calculate NCO rate as total NCOs divided by Average gross loans receivables.
(4) We report ALL as a contra-asset reducing gross loans receivable and the CSO Liability for Losses as a liability on the Consolidated Balance Sheets.
(5) We calculate (i) ALL and CSO Liability for losses rate and (ii) past-due rate as the respective totals divided by gross loans receivable at each respective quarter end.

U.S. Net Revenue

U.S. revenues, excluding Heights, decreased by $11.3 million, or 7.7%, to $135.3 million, compared to the prior-year period for the three months ended December 31, 2021, primarily as a result of the COVID-19 Impacts on gross combined loans receivable and Runoff Portfolios due to regulatory changes. See the loan performance discussions below for further details. Excluding Runoff Portfolios, U.S. revenues increased $6.6 million, or 5.4%.

The provision for losses decreased $2.2 million, or 3.8%, year over year, primarily as a result of sustained favorable NCO rates and stable past-due rates since the onset of COVID-19. U.S. past-due rates, including for loans Guaranteed by the Company, increased by 90 bps, or 4.5%, year over year, but improved 75 bps, or 3.4%, sequentially. For the three months ended December 31, 2021, the U.S. NCO rate increased 340 bps, or 16.4%, year over year, and increased 280 bps, or 12.9%, sequentially, primarily due to loan growth, and a mix shift in customer and origination channel.

U.S. Revolving LOC loan performance

U.S. Revolving LOC loan balances as of December 31, 2021 decreased $3.0 million, or 5.5%, compared to the prior year, resulting in a related revenue decrease of $3.2 million, or 10.3%, primarily due to the runoff of Virginia Revolving LOC loans. Excluding the Runoff Portfolios, U.S. Revolving LOC gross loans receivable increased $3.8 million, or 8.2%, year over year, and related revenue increased $2.0 million, or 8.1%. Sequentially, U.S. Revolving LOC loan balances increased $1.3 million, or 2.6%. The Revolving LOC allowance coverage decreased year over year from 34.5% to 25.9% for the three months ended December 31, 2021. The decrease was due to stable past-due rates, a decline in troubled debt restructuring (“TDR”) loans as a percentage of total gross loans receivable and sustained favorable NCO trends during 2021. For the three months ended December 31, 2021, NCO rates improved from 22.3% to 22.1% year over year and past-due rates improved from 30.7% to 30.5%.

U.S. Installment loan performance – Company Owned

U.S. Installment loan balances as of December 31, 2021 decreased $30.1 million, or 17.9%, year over year and revenue decreased $12.1 million, or 17.6%, compared to the prior year, primarily due to COVID-19 Impacts and Runoff Portfolios. Excluding the Runoff Portfolios, U.S. Installment loans increased $18.3 million, or 17.9%, year over year, and related revenue increased $0.5 million, or 1.1%. The Installment loans allowance coverage decreased from 19.0% in the prior year to 12.7% as of December 31, 2021, largely due to the aforementioned Runoff Portfolios, stable past-due rates and sustained favorable NCO rates. Sequentially, allowance coverage decreased from 13.4% to 12.7% as a result of lower past-due loans and stable NCOs.

We launched Verge Installment loans originated by Stride Bank in the fourth quarter of 2019 and executed pilot programs in several states. After testing various offers, rates, terms and approval criteria, Stride informed us in the first quarter of 2021 that it planned to focus on near-prime loans as they represented a larger addressable market and offered greater opportunity to scale. As a result, Stride discontinued new Verge Credit loans in April 2021. Verge loan balances totaled $6.2 million as of December 31, 2021. We expect to continue to see an orderly runoff of these balances over approximately the next 15 months.

U.S. Installment loan performance – Guaranteed by the Company

U.S. Installment loans Guaranteed by the Company increased $2.2 million, or 5.0%, year over year and increased $2.9 million, or 6.7%, sequentially. The CSO liability for losses rate decreased from 16.4% to 14.9% year over year due to sustained favorable NCO rates since the onset of COVID-19. Sequentially, the CSO liability for losses coverage decreased from 16.1% to 14.9% for the three months ended December 31, 2021 as a result of lower past-due rates. For the three months ended December 31, 2021, the past-due rate improved sequentially from 19.8% to 17.7%. The NCO rate for U.S. Installment loans Guaranteed by the Company increased 660 bps, or 12.8%, year over year, and increased 490 bps, or 9.3%, sequentially, primarily due to loan growth, and new customer, channel mix and seasonality.

Following is a summary of results of operations for the U.S. segment for the periods indicated.

U.S. Results of Operations

	Three Months Ended December 31,					For the Year Ended December 31,
(dollars in thousands, unaudited)	2021	2020 (1)	Change $	Change %		2021	2020 (1)	Change $	Change %
Revenue	$ 139,002	$ 146,588	($ 7,586)	(5.2) %		$ 525,962	$ 638,524	($ 112,562)	(17.6) %
Provision for losses	57,925	59,108	(1,183)	(2.0) %		166,033	230,164	(64,131)	(27.9) %
Net revenue	81,077	87,480	(6,403)	(7.3) %		359,929	408,360	(48,431)	(11.9) %
Operating expenses
Salaries and benefits	42,641	40,656	1,985	4.9 %		170,508	151,344	19,164	12.7 %
Occupancy	7,732	9,292	(1,560)	(16.8) %		32,565	35,814	(3,249)	(9.1) %
Advertising	11,696	11,083	613	5.5 %		33,223	40,702	(7,479)	(18.4) %
Direct operations	9,785	9,087	698	7.7 %		35,899	39,112	(3,213)	(8.2) %
Depreciation and amortization	2,851	3,078	(227)	(7.4) %		12,005	12,992	(987)	(7.6) %
Other operating expense	18,380	10,245	8,135	79.4 %		54,508	35,357	19,151	54.2 %
Total operating expenses	93,085	83,441	9,644	11.6 %		338,708	315,321	23,387	7.4 %
Other expense (income)
Interest expense	19,366	16,347	3,019	18.5 %		72,543	63,413	9,130	14.4 %
Income from equity method investment	(2,982)	(1,893)	(1,089)	57.5		(3,658)	(4,546)	888	(19.5) %
Gain from equity method investment	—	—	—	#		(135,387)	—	(135,387)	#
Loss on extinguishment of debt	—	—	—	#		40,206	—	40,206	#
Total other expense (income)	16,384	14,454	1,930	13.4 %		(26,296)	58,867	(85,163)	#
Segment operating (loss) income	(28,392)	(10,415)	(17,977)	#		47,517	34,172	13,345	39.1 %
Interest expense	19,366	16,347	3,019	18.5 %		72,543	63,413	9,130	14.4 %
Depreciation and amortization	2,851	3,078	(227)	(7.4) %		12,005	12,992	(987)	(7.6) %
EBITDA (2)	(6,175)	9,010	(15,185)	#		132,065	110,577	21,488	19.4 %
Restructuring costs	1,303	—	1,303			12,717	—	12,717
Legal and other costs	1,764	146	1,618			2,134	2,925	(791)
Income from equity method investment	(2,982)	(1,893)	(1,089)			(3,658)	(4,546)	888
Gain from equity method investment	—	—	—			(135,387)	—	(135,387)
Transaction costs	7,258	2,014	5,244			13,740	2,737	11,003
Loss on extinguishment of debt	—	—	—			40,206	—	40,206
Share-based compensation	3,463	3,014	449			13,611	12,910	701
Other adjustments	(280)	(117)	(163)			(880)	(58)	(822)
Adjusted EBITDA (2)	$ 4,351	$ 12,174	($ 7,823)	(64.3) %		$ 74,548	$ 124,545	($ 49,997)	(40.1) %
# – Variance greater than 100% or not meaningful.
(1) The December 31, 2020 presentation has been revised to conform to the current period presentation.
(2) These are non-GAAP metrics. For a description of each non-GAAP addback, see the applicable reconciliations contained under “Results of Consolidated Operations.” For a description of each non-GAAP metric, see “Non-GAAP Financial Measures.”

U.S. Segment Results – For the Three Months Ended December 31, 2021 and 2020

For a discussion of revenue, provision for losses and related gross combined loans receivables for the three months ended December 31, 2021 and 2020, see “U.S. Portfolio Performance,” above.

Operating expenses for the three months ended December 31, 2021 were $93.1 million, an increase of $9.6 million, or 11.6%, compared to $83.4 million for the three months ended December 31, 2020, primarily driven by (i) $7.3 million of transaction costs related to our acquisition of Heights in the fourth quarter of 2021, (ii) $1.3 million of store closure costs, as further described below, and (iii) $0.4 million of higher share-based compensation expense as a result of our acquisition of Flexiti. Excluding these expenses, comparable operating costs increased $0.5 million, or 0.6%.

As previously announced, we closed 49 U.S. stores during the second and third quarters of 2021 in response to evolving customer channel preferences that were accelerated by the impacts of COVID-19. The store closures represented nearly 25% of our U.S. stores and, other than Illinois, which were closed earlier in the year due to regulatory changes, reflect strategic consolidation of locations in dense local markets. The impacted locations generated 8% of our U.S. store revenue in 2020. As our omni-channel platform allows customers to transition seamlessly online, to an adjacent store or to contact centers, this consolidation reduces annual operating costs by approximately $20 million while maximizing the likelihood of retaining a large percentage of customers that had utilized the impacted stores.

As a result of the store closures, we incurred $1.3 million of closure-related charges during the three months ended December 31, 2021 and $12.7 million during the year ended December 31, 2021. These costs consisted of (i) severance and employee costs, (ii) lease termination costs and (iii) net accelerated depreciation and write-off of ROU assets and liabilities. As of December 31, 2021, we operated 160 stores in the U.S., excluding the stores acquired with the Heights acquisition. Subsequent to the Heights acquisition, we operated in 550 stores in the U.S. as of December 31, 2021.

U.S. interest expense for the three months ended December 31, 2021 increased $3.0 million, or 18.5%, related to our additional 7.50% Senior Secured Notes issued in conjunction with our Heights acquisition and higher interest on our Non-Recourse U.S. SPV Facility.

As previously described, we recognize our share of Katapult’s income or loss on a one-quarter lag. We recorded income of $3.0 million for the three months ended December 31, 2021. During the fourth quarter of 2021, we purchased an additional 2.6 million of Katapult’s common stock for $10.0 million, which increased our ownership in Katapult from 19.3% to 25.2% on a fully diluted basis assuming full pay-out of earn-out shares as of December 31, 2021.

U.S. Segment Results – For the Year Ended December 31, 2021 and 2020

U.S. revenues decreased $112.6 million, or 17.6%, compared to the prior-year period for the year ended December 31, 2021 as a result of decreases in combined gross loans receivable from COVID-19 Impacts and the Runoff Portfolios. Excluding the impact of Runoff Portfolios, U.S. revenues decreased $49.3 million, or 9.5%, as a result of lower consumer demand, driven by COVID-19 Impacts.

The provision for losses decreased $64.1 million, or 27.9%, for the year ended December 31, 2021, compared to the prior-year period, primarily as a result of (i) lower year over year demand, excluding Heights, (ii), sustained favorable lower NCO rates since the onset of COVID-19 and (iii) continued improved credit quality.

Operating expenses were $338.7 million for the year ended December 31, 2021, an increase of $23.4 million, or 7.4%, compared to $315.3 million for the year ended December 31, 2020, primarily driven by (i) $13.7 million of transaction costs related to our acquisition of Flexiti in March 2021, our acquisition of Heights in December 2021, and the Katapult and FinServ merger, (ii) $12.7 million of store closure costs as previously discussed, and (iii) $0.7 million of higher share-based compensation expense compared to the prior year. Excluding these costs, operating expenses for the year ended December 31, 2021 decreased $2.8 million, or 0.9%, compared to the prior year.

U.S. interest expense for the year ended December 31, 2021 increased $9.1 million, or 14.4%, primarily related to interest on the additional 7.50% Senior Secured Notes issued in conjunction with our Heights acquisition and $5.0 million of interest on our Non-Recourse U.S. SPV Facility compared to prior year as the facility was entered into in April 2020. An additional $2.1 million of interest was incurred for the year ended December 31, 2021, which represents interest on the 8.25% Senior Secured Notes for the period between July 30, 2021 and August 12, 2021. This is the period during which both the 8.25% Senior Secured Notes and 7.50% Senior Secured Notes were outstanding.

As previously described, we recognize our share of Katapult’s income or loss on a one-quarter lag and recorded income of $3.7 million for the year ended December 31, 2021. As a result of the merger between Katapult and FinServ, which closed during the second quarter of 2021, we recorded an additional gain of $135.4 million during the year ended December 31, 2021, which represents cash we received, net of the basis of our investment in Katapult. During the fourth quarter of 2021, we purchased an additional 2.6 million of Katapult’s common stock for $10.0 million, which increased our ownership in Katapult from 19.3% to 25.2% on a fully diluted basis assuming full pay-out of earn-out shares as of December 31, 2021.

Loss on extinguishment of debt of $40.2 million for the year ended December 31, 2021 was due to the redemption of the 8.25% Senior Secured Notes due 2025.

Canada Direct Lending and Canada POS Lending Portfolio Performance

(in thousands, except percentages)		Q4 2021	Q3 2021	Q2 2021	Q1 2021		Q4 2020
Gross loans receivable
Canada Direct Lending Revolving LOC		$ 402,405	$ 366,509	$ 337,700	$ 319,307		$ 303,323
Canada Direct Lending Installment loans		24,792	24,315	23,564	24,385		26,948
Total Canada Direct Lending gross loans receivable		$ 427,197	$ 390,824	$ 361,264	$ 343,692		$ 330,271
Total Canada POS Lending gross loans receivable		459,176	302,349	$ 221,453	$ 201,539		$ —
Lending Revenue:
Canada Direct Lending Revolving LOC		$ 43,943	$ 40,239	$ 37,450	$ 34,368		$ 31,962
Canada Direct Lending Installment loans		11,416	11,331	10,541	10,447		11,106
Total Canada Direct Lending – lending revenue		$ 55,359	$ 51,570	$ 47,991	$ 44,815		$ 43,068
Canada POS Lending – lending revenue		$ 13,704	$ 10,646	$ 6,495	$ 1,383		$ —
Lending Provision:
Canada Direct Lending Revolving LOC		$ 20,080	$ 11,375	$ 7,066	$ 7,909		$ 8,679
Canada Direct Lending Installment loans		2,945	2,512	1,438	1,234		1,972
Total Canada Direct Lending – lending provision		$ 23,025	$ 13,887	$ 8,504	$ 9,143		$ 10,651
Canada POS Lending – lending provision		$ 12,511	$ 8,285	$ 2,986	$ 855		$ —
Lending Net Revenue
Canada Direct Lending Revolving LOC		$ 23,863	$ 28,864	$ 30,384	$ 26,459		$ 23,283
Canada Direct Lending Installment loans		8,471	8,819	9,103	9,213		9,134
Total Canada Direct Lending – lending net revenue		$ 32,334	$ 37,683	$ 39,487	$ 35,672		$ 32,417
Canada POS Lending – lending net revenue		$ 1,193	$ 2,361	$ 3,509	$ 528		$ —
NCOs
Canada Direct Lending Revolving LOC		$ 15,112	$ 9,887	$ 10,838	$ 11,097		$ 8,907
Canada Direct Lending Installment loans		2,758	2,444	1,513	1,669		2,060
Total Canada Direct Lending NCOs		$ 17,870	$ 12,331	$ 12,351	$ 12,766		$ 10,967
Canada POS Lending NCOs (1)		$ 1,731	$ 1,827	$ 1,509	$ 213		$ —
NCO rate (2)
Canada Direct Lending Revolving LOC		3.9 %	2.8 %	3.3 %	3.6 %		3.1 %
Canada Direct Lending Installment loans		11.2 %	10.2 %	6.3 %	6.5 %		7.7 %
Total Canada Direct Lending NCO rate		4.4 %	3.3 %	3.5 %	3.8 %		3.5 %
Canada POS Lending NCO rate		0.5 %	0.7 %	0.7 %	NM (3)		— %
ALL (4)
Canada Direct Lending Revolving LOC		$ 32,360	$ 27,429	$ 26,602	$ 29,916		$ 32,773
Canada Direct Lending Installment loans		1,975	1,790	1,767	1,819		2,233
Total Canada Direct Lending ALL		$ 34,335	$ 29,219	$ 28,369	$ 31,735		$ 35,006
Canada POS Lending ALL (5)		$ 22,189	$ 11,353	$ 4,577	$ 519		$ —
ALL rate (6)
Canada Direct Lending Revolving LOC		8.0 %	7.5 %	7.9 %	9.4 %		10.8 %
Canada Direct Lending Installment loans		8.0 %	7.4 %	7.5 %	7.5 %		8.3 %
Total Canada Direct Lending ALL rate		8.0 %	7.5 %	7.9 %	9.2 %		10.6 %
Canada POS Lending ALL rate		4.8 %	3.8 %	2.1 %	0.3 %		— %
Past-due rate (6)
Canada Direct Lending Revolving LOC		8.9 %	6.8 %	5.8 %	6.4 %		6.8 %
Canada Direct Lending Installment loans		2.2 %	2.0 %	2.3 %	2.1 %		2.1 %
Total Canada Direct Lending past-due rate		8.5 %	6.5 %	5.5 %	6.1 %		6.4 %
Canada POS Lending past-due rate (7)		4.1 %	4.8 %	5.4 %	5.7 %		— %
(1) For the second, third and fourth quarters of 2021, NCOs presented above include $2.4 million, $0.6 million and $0.8 million, respectively, of NCO’s related to the fair value discount, which are excluded from provision.
(2) We calculate NCO rate as total NCOs divided by Average gross loans receivables.
(3) Not material or not meaningful.
(4) We report ALL as a contra-asset reducing gross loans receivable on the Consolidated Balance Sheets.
(5) Loans originated pre-acquisition have been adjusted to fair value at the acquisition date and included estimates of future losses. The ALL represents estimated incurred losses for loans originated after acquisition plus incurred losses for acquired loans in excess of the remaining fair value discount.
(6) We calculate ALL rate and past-due rate as the respective totals divided by gross loans receivable at each respective quarter end.
(7) The past-due rate for Canada POS Lending for loans 30+ days past-due were 1.9%, 2.1%, 2.6% and 3.0% for the three months ended December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.

Canada Direct Lending Net Revenue

Canada Direct Lending revenue increased year over year by $15.0 million, or 27.1%, ($12.7 million, or 23.0%, on a constant currency basis), for the three months ended December 31, 2021, due to the growth of Revolving LOC loans in Canada. Sequentially, Canada Direct Lending revenue increased $4.3 million, or 6.6%.

The provision for losses increased $12.5 million, or 116.4%, ($11.8 million, or 109.7%, on a constant currency basis), to $23.2 million for the three months ended December 31, 2021, compared to $10.7 million in the prior-year period. The increase in provision for losses was primarily due to higher past-due rates, which increased from 6.4% to 8.5% year over year. NCO rates increased from 3.5% to 4.4% year over year and increased from 3.3% to 4.4% sequentially due to new customer, channel mix and seasonality. Although NCOs increased from December 31, 2020 to December 31, 2021, NCO rates have remained stable since the onset of COVID-19, resulting in an allowance coverage decrease year over year of 250 bps, or 24.2%.

Canada Direct Lending Revolving LOC loan performance

Canada Direct Lending Revolving LOC gross loans receivable increased $99.1 million, or 32.7%, ($99.9 million, or 32.9%, on a constant currency basis) year over year and $35.9 million, or 9.8% ($36.1 million, or 9.9%, on a constant currency basis) sequentially. Revolving LOC revenue increased $12.0 million, or 37.5%, year over year and $3.7 million, or 9.2%, sequentially ($10.5 million, or 33.0%, and $3.7 million, or 9.3%, respectively, on a constant currency basis). The quarterly NCO rate increased by 80 bps, or 25.5%, year-over-year and 110 bps, or 40.0%, sequentially due to new customer, channel mix and seasonality. Although NCOs increased from December 31, 2020 to December 31, 2021, NCO rates have remained stable since the onset of COVID-19, resulting in an allowance coverage decrease year over year from 10.8% to 8.0% as of December 31, 2021.

Canada Direct Lending Installment loan performance

Canada Direct Lending Installment revenue increased $0.3 million, or 2.8%, (a decrease of $0.1 million, or 0.6%, on a constant currency basis) year over year. Installment gross loans receivable decreased $2.2 million, or 8.0% ($2.1 million, or 7.8%, on a constant currency basis) year over year. The year-over-year decrease in Installment loans was due to a continued shift to Revolving LOC loans, as well as COVID-19 related constraints on demand, particularly as related to store-originated Installment loans. The Installment allowance coverage decreased year over year from 8.3% to 8.0% primarily as a result of lower sustained NCOs since the onset of COVID-19 and stable past-due rates. The year-over-year past-due rate for Installment loans improved by 15 bps, or 8.1%. Sequentially, Installment gross loans receivable and related revenue remained consistent.

Canada POS Lending Revolving LOC loan performance

Canada POS Lending Revolving LOC gross loans receivable as of December 31, 2021 was $459.2 million, including a discount of $2.3 million related to purchase accounting adjustments ($461.5 million prior to purchase accounting adjustments). For the three months ended December 31, 2021, Canada POS Lending revenue was $14.8 million, net of a $1.7 million reduction from acquisition-related adjustments for the period. For a full discussion of the purchase accounting and acquisition-related adjustments, refer to “Consolidated Revenue by Product and Segment” above.

For the three months ended December 31, 2021, allowance coverage was 4.8%, up sequentially from 3.8%. Excluding acquisition-related adjustments, allowance coverage was 5.3%, down sequentially from 5.5%, primarily due to sustained favorable NCO trends. Revolving LOC gross loans receivable generally charge-off at 180 days past due. NCOs were $1.7 million for the three months ended December 31, 2021. The Canada POS Lending NCO and past-due rates for the quarter were 0.5% and 4.1%, respectively, down sequentially from 0.7% and 4.8%, respectively.

Originations for the three months ended December 31, 2021 were $322.1 million in Canadian dollars (“C$”), an increase of C$200.8 million, or 165.6%, from the prior-year period of C$121.3 million. Sequentially, Canada POS Revolving LOC gross loans receivable increased $156.8 million, or 51.9%.

Canada Direct Lending Results of Operations

	Three Months Ended December 31,					For the Year Ended December 31,
(dollars in thousands, unaudited)	2021	2020 (1)	Change $	Change %		2021	2020 (1)	Change $	Change %
Revenue	$ 70,529	$ 55,490	$ 15,039	27.1 %		$ 257,039	$ 208,872	$ 48,167	23.1 %
Provision for losses	23,204	10,724	12,480	116.4 %		54,997	58,647	(3,650)	(6.2) %
Net revenue	47,325	44,766	2,559	5.7 %		202,042	150,225	51,817	34.5 %
Operating expenses
Salaries and benefits	13,036	11,922	1,114	9.3 %		52,118	45,473	6,645	14.6 %
Occupancy	5,732	5,578	154	2.8 %		22,482	21,457	1,025	4.8 %
Advertising	1,446	1,075	371	34.5 %		4,267	3,850	417	10.8 %
Direct operations	2,909	2,032	877	43.2 %		9,777	7,781	1,996	25.7 %
Depreciation and amortization	1,111	1,108	3	0.3 %		4,505	4,506	(1)	— %
Other operating expense	3,189	2,106	1,083	51.4 %		10,364	11,691	(1,327)	(11.4) %
Total operating expenses	27,423	23,821	3,602	15.1 %		103,513	94,758	8,755	9.2 %
Other expense
Interest expense	2,505	2,344	161	6.9 %		9,798	9,296	502	5.4 %
Total other expense	2,505	2,344	161	6.9 %		9,798	9,296	502	5.4 %
Segment operating income	17,397	18,601	(1,204)	(6.5) %		88,731	46,171	42,560	92.2 %
Interest expense	2,505	2,344	161	6.9 %		9,798	9,296	502	5.4 %
Depreciation and amortization	1,111	1,108	3	0.3 %		4,505	4,506	(1)	— %
EBITDA (2)	21,013	22,053	(1,040)	(4.7) %		103,034	59,973	43,061	71.8 %
Share-based compensation	365	—	365	#		365	—	365
Canada GST adjustment	—	—	—			—	2,160	(2,160)
Other adjustments	202	105	97			444	685	(241)
Adjusted EBITDA (2)	$ 21,580	$ 22,158	($ 578)	(2.6) %		$ 103,843	$ 62,818	$ 41,025	65.3 %
# – Variance greater than 100% or not meaningful.
(1) The December 31, 2020 presentation has been revised to conform to the current period presentation.
(2) These are non-GAAP metrics. For a description of each non-GAAP addback, see the applicable reconciliations contained under “Results of Consolidated Operations.” For a description of each non-GAAP metric, see “Non-GAAP Financial Measures.”

Canada Direct Lending Segment Results – For the Three Months Ended December 31, 2021 and 2020

For a discussion of revenue, provision for losses and related gross combined loans receivables for the three months ended December 31, 2021 and 2020, see “Canada Direct Lending and Canada POS Lending Portfolio Performance” above.

Canada Direct Lending operating expenses were $27.4 million for the three months ended December 31, 2021, an increase of $3.6 million, or 15.1%, ($2.7 million, or 11.4%, on a constant currency basis), compared to the prior year, primarily due to (i) the timing and level of performance-based variable compensation, (ii) higher store operating costs as the prior year was impacted by COVID-19 store closures, and (iii) higher variable costs, primarily collection and financial service fees, on higher volume year over year.

Interest expense for the three months ended December 31, 2021 was $2.5 million compared to $2.3 million for the three months ended December 31, 2020. During the fourth quarter of 2021, we increased the capacity of the Non-Recourse Canada SPV Facility from C$175.0 million to C$350.0 million.

Canada Direct Lending Segment Results – For the Year Ended December 31, 2021 and 2020

Canada Direct Lending revenue increased $48.2 million, or 23.1%, ($31.6 million, or 15.1%, on a constant currency basis), to $257.0 million for the year ended December 31, 2021, from $208.9 million in the prior year, primarily due to higher consumer demand as COVID-19 Impacts lessened. Canada Direct Lending Revolving LOC gross loans receivable grew $99.1 million, or 32.7%, year over year, contributing to related revenue growth of $40.9 million, or 35.6%, for the year ended December 31, 2021 compared to the prior year.

The provision for losses decreased $3.7 million, or 6.2%, ($7.0 million, or 12.0% on a constant currency basis), to $55.0 million for the year ended December 31, 2021, compared to $58.6 million in the prior year. The decrease in provision for losses was the result of sustained lower NCOs since the onset of COVID-19 and the related impact of changes in allowance coverage due to an increase in credit quality for Revolving LOC loans. Refer to “Canada Direct Lending and Canada POS Lending Portfolio Performance” above for additional details on quarterly loss and allowance rates.

Canada Direct Lending operating expenses for the year ended December 31, 2021 were $103.5 million, an increase of $8.8 million, or 9.2%, ($2.1 million, or 2.2%, on a constant currency basis), compared to $94.8 million for the year ended December 31, 2020, primarily related to (i) the timing and level of performance-based variable compensation, (ii) higher store operating costs as the prior year was impacted by COVID-19 store closures, and (iii) higher variable costs, primarily collection and financial service fees, on higher volume year over year.

Canada Direct Lending other expense for the year ended December 31, 2021 was $9.8 million, an increase of $0.5 million, or 5.4%, for the year ended December 31, 2020, primarily due to higher borrowings on the Non-Recourse Canada SPV Facility. During the fourth quarter of 2021, we increased the capacity of the Non-Recourse Canada SPV Facility from C$175.0 million to C$350.0 million.

Canada POS Lending Results of Operations

	Three Months Ended December 31,		For the Year Ended December 31,
(dollars in thousands, unaudited)	2021		2021
Revenue	$ 14,788		$ 34,842
Provision for losses	12,511		24,638
Net revenue	2,277		10,204
Operating expenses
Salaries and benefits	6,085		14,483
Occupancy	234		512
Advertising	796		1,272
Direct operations	6,810		14,380
Depreciation and amortization	3,308		10,445
Other operating expense	4,267		9,810
Total operating expenses	21,500		50,902
Other expense
Interest expense	6,679		14,993
Total other expense	6,679		14,993
Segment operating loss	(25,902)		(55,691)
Interest expense	6,679		14,993
Depreciation and amortization	3,308		10,445
EBITDA (1)	(15,915)		(30,253)
Acquisition-related adjustments	4,162		13,949
Change in fair value of contingent consideration	2,384		6,209
Other adjustments	(17)		(51)
Adjusted EBITDA (1)	($ 9,386)		($ 10,146)
(1) These are non-GAAP metrics. For a description of each non-GAAP addback, see the applicable reconciliations contained under “Results of Consolidated Operations.” For a description of each non-GAAP metric, see “Non-GAAP Financial Measures.”

Canada POS Lending Segment Results – For the Three Months and Year Ended December 31, 2021

Canada POS Lending revenue includes revenue from merchant discounts and ancillary products. MDR represents the discount merchant partners provide to help facilitate customer credit card purchases at merchant locations. The fee is recognized over the estimated average loan term of 12 months. Ancillary revenue includes administrative fees, annual fees, insurance product fees and other fees charged to customers.

For a discussion of revenue, provision for losses and related gross loans receivables, see the “Canada Direct Lending and Canada POS Lending Portfolio Performance,” above for the three months ended December 31, 2021. For the three months ended December 31, 2021, revenue and related gross loans receivable increased $3.4 million, or 29.5%, and $156.8 million, or 51.9%, sequentially primarily due to the continued loan growth since the onboarding of LFL as previously discussed.

For the year ended December 31, 2021, Canada POS Lending revenue was $34.8 million, and included a $7.5 million reduction as a result of acquisition-related adjustments. For a full discussion of acquisition-related adjustments, refer to “Consolidated Revenue by Product and Segment” earlier within this release.

Provision for losses for the year ended December 31, 2021 was $24.6 million, and included a $6.4 million increase as a result of acquisition-related adjustments. Refer to “Canada Direct Lending and Canada POS Lending Portfolio Performance,” above for additional details on quarterly loss and allowance rates.

CURO GROUP HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
	December 31, 2021 (1) (unaudited)		December 31, 2020
ASSETS
Cash and cash equivalents	$ 63,179		$ 213,343
Restricted cash (includes restricted cash of consolidated VIEs of $57,155 and $31,994 as of December 31, 2021 and December 31, 2020, respectively)	98,896		54,765
Gross loans receivable (includes loans of consolidated VIEs of $1,294,706 and $360,431 as of December 31, 2021 and December 31, 2020, respectively)	1,548,318		553,722
Less: Allowance for loan losses (includes allowance for loan losses of consolidated VIEs of $66,618 and $54,129 as of December 31, 2021 and December 31, 2020, respectively)	(87,560)		(86,162)
Loans receivable, net	1,460,758		467,560
Income taxes receivable	31,774		32,062
Prepaid expenses and other (includes prepaid expenses and other of consolidated VIEs of $0 and $388 as of December 31, 2021 and December 31, 2020, respectively)	42,038		27,994
Property and equipment, net	54,635		59,749
Investments in Katapult	27,900		27,370
Right of use asset – operating leases	116,300		115,032
Deferred tax assets	15,639		—
Goodwill	429,792		136,091
Intangibles, net	109,930		40,425
Other assets	9,755		8,595
Total Assets	$ 2,460,596		$ 1,182,986
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Accounts payable and accrued liabilities (includes accounts payable and accrued liabilities of consolidated VIEs of $9,886 and $34,055 as of December 31, 2021 and December 31, 2020, respectively)	$ 121,434		$ 49,624
Deferred revenue	21,649		5,394
Lease liability – operating leases	122,431		122,648
Contingent consideration related to acquisition	26,508		—
Income taxes payable	680		—
Accrued interest (includes accrued interest of consolidated VIEs of $3,279 and $1,147 as of December 31, 2021 and December 31, 2020, respectively)	34,974		20,123
Liability for losses on CSO lender-owned consumer loans	6,908		7,228
Debt (includes debt and issuance costs of consolidated VIEs of $979,500 and $14,428 as of December 31, 2021 and $147,427 and $7,766 as of December 31, 2020, respectively)	1,945,793		819,661
Other long-term liabilities	13,845		15,382
Deferred tax liabilities	6,044		11,021
Total Liabilities	$ 2,300,266		$ 1,051,081
Stockholders’ Equity
Total Stockholders’ Equity	$ 160,330		$ 131,905
Total Liabilities and Stockholders’ Equity	$ 2,460,596		$ 1,182,986
(1) The December 31, 2021 Consolidated Balance Sheet includes our acquisition of Heights, prior to the finalization of the initial purchase accounting adjustments, subject to future measurement period adjustments. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the date of this release and may be adjusted during the measurement period of up to 12 months from the date of acquisition as further information becomes available.

Balance Sheet Changes – December 31, 2021 Compared to December 31, 2020

Cash and cash equivalents – Cash and cash equivalents decreased as compared to December 31, 2020 primarily due to our use of cash for (i) the acquisition of Flexiti in the first quarter of 2021, (ii) the acquisition of Heights in the fourth quarter of 2021 and (iii) increased demand for loan products as COVID-19 Impacts lessened throughout 2021. The decrease was partially offset by (i) the issuance of the 7.50% Senior Secured Notes, and (ii) a one-time cash inflow of $146.9 million from the merger of Katapult and FinServ.

Restricted cash – The increase in Restricted cash from December 31, 2020 was primarily due to (i) the Non-Recourse Flexiti SPE Facility, entered into as part of our acquisition of Flexiti in March 2021, (ii) the Non-Recourse Flexiti Securitization Facility, entered into in the fourth quarter of 2021, and (iii) the Non-Recourse Heights SPE Facility, entered into as part of our acquisition of Heights in December 2021.

Gross loans receivable and Allowance for loan losses – The increase in Gross loans receivable from December 31, 2020 was primarily due to (i) the acquisition of Flexiti, which accounted for $459.2 million of gross loans receivable as of December 31, 2021, (ii) the acquisition of Heights, which accounted for approximately $472 million of loans receivable, and (iii) growth in the Canada Direct Lending Revolving LOC loans. The increase was partially offset by a decline in the U.S. Refer to “Consolidated Loans Receivable” and “Portfolio Performance Analysis” above for additional details.

Goodwill and Intangible Assets – The increases in Goodwill and Intangible assets from December 31, 2020 were due to our acquisition of Flexiti on March 10, 2021, which accounted for $39.9 million of goodwill and $51.2 million of net intangible assets as of December 31, 2021, and our acquisition of Heights on December 27, 2021, which accounted for $253.9 million of goodwill and $11.9 million of intangible assets as of December 31, 2021.

Accounts payable and accrued liabilities – The increase in Accounts payable and accrued liabilities from December 31, 2020 is primarily due to the acquisition of Flexiti and Heights during 2021 and an increase in timing and extent of variable compensation, as previously discussed.

Contingent Consideration related to acquisition – The acquisition of Flexiti on March 10, 2021 included an up-front purchase price as well as a cash earn-out of up to approximately $32.8 million. The cash earn-out is recorded at fair value based on discounted expected cash flows and remeasured periodically. The fair value of the contingent consideration increased from $24.1 million as of September 30, 2021 to $26.5 million as of December 31, 2021.

Debt and Accrued interest – The increase in Debt and related Accrued interest from December 31, 2020 is primarily due to (i) our new 7.50% Senior Secured Notes due 2028, which we closed on July 30, 2021 and upsized to $1.0 billion on December 27, 2021, (ii) the Non-Recourse Flexiti SPE Facility entered into as part of our acquisition in March 2021 and Non-Recourse Flexiti Securitization Facility entered into during the fourth quarter of 2021, (iii) an increase in our utilization for our Non-Recourse Canada SPV Facility, and (iv) the Non-Recourse Heights SPE Facility, entered into as part of our acquisition on December 27, 2021. See the “Debt Capitalization Summary” below for additional details.

Debt Capitalization Summary

(in thousands, net of deferred financing costs)

			Capacity		Interest Rate		Maturity		Counterparties		Balance as of December 31, 2021 (in USD)
7.50% Senior Secured Notes (due 2028) (2)			$1.0 billion		7.50%		August 1, 2028				$ 980,721
Senior Secured Revolving Credit Facility			$50.0 million		1-Mo LIBOR + 5.00%		June 30, 2022		BayCoast Bank; Stride Bank; Hancock-Whitney Bank; Metropolitan Commercial Bank		—
Non-Recourse U.S. SPV Facility			$200.0 million		1-Mo LIBOR + 6.25%		April 8, 2024		Atalaya Capital Management, MetaBank		45,392
Non-Recourse Heights SPE Facility			$350.0 million		1-Mo LIBOR + 5.25%		December 31, 2024		Ares Capital		350,000
Non-Recourse Canada SPV Facility (1)			C$350.0 million		3-Mo CDOR + 6.00%		August 2, 2026		Waterfall Asset Management		157,813
Non-Recourse Flexiti SPE Facility (1)			C$500.0 million		3-Mo CDOR + 4.40%		March 10, 2024		Credit Suisse (Class A); SPF (Class B)		172,739
Non-Recourse Flexiti Securitization Facility (1)			C$526.5 million		1-Mo CDOR + 3.59%		December 9, 2025		National Bank of Canada; an affiliate of the Bank of Montreal; and a fund managed by Waterfall Asset Management		239,128
Cash Money Revolving Credit Facility (1)			C$10.0 million		Canada Prime Rate +1.95%		On-demand		Royal Bank of Canada		—
(1) Capacity amounts are denominated in Canadian dollars, while outstanding balances as of December 31, 2021 are denominated in U.S. dollars.
(2) On July 30, 2021, we closed our $750 million aggregate principal amount of new 7.50% Senior Secured Notes, which was used to redeem our $690.0 million 8.25% Senior Secured Notes due 2025. On December 27, 2021, we issued an additional $250.0 million of our 7.50% Senior Secured Notes for a total capacity of $1.0 billion.

Non-GAAP Financial Measures

In addition to the financial information prepared in conformity with U.S. GAAP, we provide certain “non-GAAP financial measures,” including:

• Adjusted Net Income and Adjusted Earnings Per Share, or the Adjusted Earnings Measures (net income from continuing operations plus or minus certain legal and other costs, income or loss from equity method investment, goodwill and intangible asset impairments, transaction-related costs, restructuring costs, loss on extinguishment of debt, adjustments related to acquisition accounting, share-based compensation, intangible asset amortization, certain tax adjustments and impacts from tax law changes and cumulative tax effect of applicable adjustments, on a total and per share basis);
• EBITDA (earnings before interest, income taxes, depreciation and amortization);
• Adjusted EBITDA (EBITDA plus or minus certain non-cash and other adjusting items);
• Adjusted effective income tax rate (effective tax rate plus or minus certain non-cash and other adjusting items); and
• Gross Combined Loans Receivable (includes loans originated by third-party lenders through CSO programs which are not included in the Consolidated Financial Statements).

We believe that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of the Company’s operations. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of the business that, when viewed with the Company’s U.S. GAAP results, provide a more complete understanding of factors and trends affecting the business.

We believe that investors regularly rely on non-GAAP financial measures, such as Adjusted Net Income, Adjusted Earnings per Share, EBITDA and Adjusted EBITDA, to assess operating performance and that such measures may highlight trends in the business that may not otherwise be apparent when relying on financial measures calculated in accordance with U.S. GAAP. In addition, we believe that the adjustments shown above are useful to investors in order to allow them to compare our financial results during the periods shown without the effect of each of these income or expense items. In addition, we believe that Adjusted Net Income, Adjusted Earnings per Share, EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of public companies in our industry, many of which present Adjusted Net Income, Adjusted Earnings per Share, EBITDA and/or Adjusted EBITDA when reporting their results.

In addition to reporting loans receivable information in accordance with U.S. GAAP, we provide Gross Combined Loans Receivable consisting of owned loans receivable plus loans originated by third-party lenders through the CSO programs, which we guarantee but do not include in the Consolidated Financial Statements. Management believes this analysis provides investors with important information needed to evaluate overall lending performance.

We provide non-GAAP financial information for informational purposes and to enhance understanding of the U.S. GAAP Consolidated Financial Statements. Adjusted Net Income, Adjusted Earnings per Share, EBITDA, Adjusted EBITDA and Gross Combined Loans Receivable should not be considered as alternatives to income from continuing operations, segment operating income, or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flows from operating activities or any other liquidity measure derived in accordance with U.S. GAAP. Readers should consider the information in addition to, but not instead of or superior to, the financial statements prepared in accordance with U.S. GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.

Description and Reconciliations of Non-GAAP Financial Measures

Adjusted Net Income, Adjusted Earnings per Share, EBITDA and Adjusted EBITDA Measures have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our income or cash flows as reported under U.S. GAAP. Some of these limitations are:

• they do not include cash expenditures or future requirements for capital expenditures or contractual commitments;
• they do not include changes in, or cash requirements for, working capital needs;
• they do not include the interest expense, or the cash requirements necessary to service interest or principal payments on debt;
• depreciation and amortization are non-cash expense items reported in the statements of cash flows; and
• other companies in our industry may calculate these measures differently, limiting their usefulness as comparative measures.

We calculate Adjusted Earnings per Share utilizing diluted shares outstanding at year-end. If the Company records a loss from continuing operations under U.S. GAAP, shares outstanding utilized to calculate Diluted Earnings per Share from continuing operations are equivalent to basic shares outstanding. Shares outstanding utilized to calculate Adjusted Earnings per Share from continuing operations reflect the number of diluted shares the Company would have reported if reporting net income from continuing operations under U.S. GAAP.

As noted above, Gross Combined Loans Receivable includes loans originated by third-party lenders through CSO programs which are not included in the consolidated financial statements but from which we earn revenue and for which we provide a guarantee to the lender. Management believes this analysis provides investors with important information needed to evaluate overall lending performance.

We believe Adjusted Net Income, Adjusted Earnings per Share, EBITDA and Adjusted EBITDA are used by investors to analyze operating performance and to evaluate our ability to incur and service debt and the capacity for making capital expenditures. Adjusted EBITDA is also useful to investors to help assess our estimated enterprise value. The computation of Adjusted EBITDA as presented in this release may differ from the computation of similarly titled measures provided by other companies.

Forward-Looking Statements

Both the Heights and Flexiti acquisitions will solidify our position as a full spectrum non-prime and prime consumer lender in the U.S. and Canada and accelerate our long-term revenue and earnings growth prospects.

This press release contains forward-looking statements. These forward-looking statements include projections, estimates and assumptions about revenue and growth trends and our ability to create value; our ability to accelerate our transition into longer-term, higher-balance and lower-rate credit products; our belief that recent acquisitions will solidify our position as a full spectrum non-prime and prime consumer lender in the U.S. and Canada and accelerate our long-term revenue and earnings growth prospects; and our belief in the usefulness of the various non-GAAP financial measures used in this release. In addition, words such as “guidance,” “estimate,” “anticipate,” “believe,” “forecast,” “step,” “plan,” “predict,” “focused,” “project,” “is likely,” “expect,” “intend,” “should,” “will,” “confident,” variations of such words and similar expressions are intended to identify forward-looking statements. Our ability to achieve these forward-looking statements is based on certain assumptions, judgments and other factors, both within and outside of our control, that could cause actual results to differ materially from those in the forward-looking statements, including: errors in our internal forecasts or those of companies in which we invest; the effects of competition on the Company’s business or on those companies in which we invest; our ability to attract and retain customers; market, financial, political and legal conditions; actions of regulators and the negative impact of those actions on our business; the continuing impact of COVID-19 pandemic or any other similar wide-spread event on the Company’s business and the global economy; our dependence on third-party lenders to provide the cash we need to fund our loans and our ability to affordably access third-party financing; our level of indebtedness; our ability to successfully integrate acquired businesses; our ability to protect our proprietary technology and analytics and keep up with that of our competitors; disruption of our information technology systems that adversely affect our business operations; ineffective pricing of the credit risk of our prospective or existing customers; inaccurate information supplied by customers or third parties that could lead to errors in judging customers’ qualifications to receive loans; improper disclosure of customer personal data; failure of third parties who provide products, services or support to us; any failure of third-party lenders upon whom we rely to conduct business in certain states; disruption to our relationships with banks and other third-party electronic payment solutions providers as well as other factors discussed in our filings with the Securities and Exchange Commission. These projections, estimates and assumptions may prove to be inaccurate in the future. These forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. There may be additional risks that CURO presently does not know or that it currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual future results. We undertake no obligation to update, amend or clarify any forward-looking statement for any reason.

All product names, logos, brands, trademarks and registered trademarks are property of their respective owners.

About CURO

CURO Group Holdings Corp. (NYSE: CURO) is a full-spectrum consumer credit provider across the U.S. and Canada. The Company was founded in 1997 by three childhood friends in Kansas to meet the growing consumer need for short-term loans. Today, CURO operates a robust, omni-channel platform providing comprehensive credit solutions to help customers achieve their financial goals. CURO’s decades of experience with alternative data power the underwriting and scoring engine, mitigating risk across the full spectrum of credit products. CURO operates under a number of brands including Speedy Cash , Rapid Cash , Cash Money , LendDirect , Flexiti , Avío Credit , Opt+ , Revolve Finance , Heights Finance, Southern Finance, Covington Credit, Quick Credit and First Phase. Our diversified product channels allows us to meet the changing needs and preferences of our customers.

Conference Call

CURO will host a conference call to discuss these results at 8:15 a.m. Eastern Time on Wednesday, February 9, 2022. The live webcast of the call can be accessed at the CURO Investor Relations website at http://ir.curo.com/.

You may access the call at 1-833-953-2430 (1-412-317-5759 for international callers). Please ask to join the CURO Group Holdings call. A replay of the conference call will be available until February 16, 2022, at 8:15 a.m. Eastern Time. An archived version of the webcast will be available on the CURO Investors website for 90 days. You may access the conference call replay at 1-877-344-7529 (1-412-317-0088 for international callers). The replay access code is 5345798.

Final Results

The financial results presented and discussed herein are on a preliminary and unaudited basis; final audited data will be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

(CURO-NWS)

Most Americans have a bad credit history. Loans for bad credit are loans made to people with a bad credit history and low income. As the name suggests, loans for bad credit loans do not require good repayment records, employment verification, or collateral. Are you part of the group in the United States that has to deal with this? Don’t be concerned; we’re here to help you. Whether you’re looking to take your first bad credit loan or have been doing it for a while, this article will teach you everything about obtaining loans for bad credit . So that you can better control your financial situation.

Foremost, Loans with poor credit are available in a variety of forms and are known by a variety of names, including cash advances, payday loans, emergency loans, and so on. Because these bad credit loans do not require a credit check, they are also referred to as no credit check loans.

An emergency loan refers to a quick receiving of money, usually within 24 hours. People take it to fulfill their emergency requirements or something to cover up for an emergency they suspect in near future. Similar to most of the loans, loans for bad credit are also offered on interest and require some terms and conditions to be fulfilled.

What are loan-lending platforms?

A loan-lending platform is a website where lenders and borrowers interact. These websites, referred to as loan-lenders, are only intermediaries between lenders and borrowers. These websites allow you to negotiate with the lenders and select one that best meets your needs.

FundsJoy: The Best Online Bad Credit Loan Provider

FUNDSJOY is the ideal poor credit loan business for people with bad credit.

FundsJoy is one of the most dependable bad credit loan providers in the United States. It’s a widely held misconception that FundsJoy is a direct Payday lender. It’s simply a platform that connects borrowers to lenders.

Characteristics of FundsJoy

1. Wide Network of Active Lenders

The net is full of sites that provide loans to individuals who need them. The loan-lending platform serves as a link between borrowers and lenders, therefore the more lenders there are on a website, the easier it will be for you to obtain money whenever you require it. That’s where FundsJoy shines.

FundsJoy offers a wide range of options to choose from when arranging your emergency loan. Over 60 lenders provide various variable term and condition loans, ensuring that your urgent funding needs are met as soon as they arise. FundsJoy has established a list of minimal requirements for prospective customers. You must be at least 18 years old, a US citizen, have an annual income of at least $800 per month, and have a bank checking account. Aside from that, lenders have their own criteria for eligibility that you must meet in order to receive a loan from them.

2. Simple process

Customers across America adore the simple-to-use FundsJoy platform, which is why it’s the greatest platform for bad credit loans. Their application procedure is straightforward to comprehend and takes 5 to 10 minutes to complete. This is a crucial consideration since most individuals apply for emergency loans when they have little time to spare on lengthy application forms that need significant time and concentration. Finally, applying for a bad credit loan on FundsJoy is as simple as it gets. All you need is an internet connection and your application will be complete in 10 minutes.

3. Loan Limits

They provide a variety of bad credit financing, starting at $5,000 and going to $35,000 on their website, FundsJoy. They link them with over 60 lenders who can assist you in a variety of ways. Typically, FundsJoy provides small sums ranging from $300 to $500.

Your loan amount rises, which affects the terms and conditions. Because of the expansion in the loan sum, the terms and conditions become more rigid and difficult to fulfill. FundsJoy is not involved. They simply function as a link between you and the lender. As a result, you must discuss these topics with your lender.

4. Variety of Loans

There are many lending options on FundsJoy. The most popular include payday loans, bad credit loans, and cash advances.

Payday loans are typically the most simple and easiest to get. However, because they have such a high-interest rate, it’s best to avoid them unless absolutely required.

Cash advances are another form of financial aid that allows you to receive cash rather than having your money transferred to your bank account. People who do not have access to their bank account in an emergency frequently take them.

Bad credit loans are the most popular sort of loan taken every year, and they’re frequently taken by individuals in serious financial binds. They have few or no requirements to fulfill, which is why they are so popular.

Why Choose FundsJoy?

With so many alternatives accessible these days, why is FundsJoy the finest of them all? Why is FundsJoy the most reputable loan lender in the market today? What are the policies followed by FundsJoy as a bad credit loan provider? To answer these questions and everything you need to know about, keep reading since we’ve outlined some of the major reasons FundsJoy should be your first choice whenever you need a loan for bad credit.

1. Trusted Reputation

Consider how often you conduct internet shopping. What’s the first thing you check out when trying a new brand? In most cases, it’s the reviews section. Customer feedback is important for any business to succeed, and FundsJoy isn’t exempt. They give excellent services while prioritizing customer happiness. Customers, in exchange, provide positive reviews that are key.

2. Flexible terms and conditions

FundsJoy has a minimal set of requirements that allows almost everyone to access financial help. You must also know the lender’s policies and conditions after meeting your criteria. Because FundsJoy features over 60 lenders, it enables you a lot of freedom in selecting one with simple terms and conditions to fulfill.

3. Quick Funds Transfer

For many loans, such as mortgages and credit cards, FundsJoy guarantees prompt payment transfers, allowing you to receive money as soon as possible. Since emergency loans are required urgently, customers of FundsJoy appreciate the quick approval and transfer procedure.

4. Transparency

FundsJoy ensures you are aware of all things related to bad credit loan borrowing at all times. They never charge hidden fees and make certain that you receive the most out of your arrangements.

Things to Remember about Emergency Loans

Although online loan lending is considerably more beneficial and simpler than traditional lending, it has certain restrictions. Here are a few things to keep in mind while applying for internet emergency loans:

1. FundsJoy is not a lender or broker, so it cannot guarantee that you will find a loan. They are not actual lenders or brokers, so if you don’t locate a suitable lender, they can do little about it. As a result, make sure you have a backup plan in mind and keep in mind that you may have to meet your requirements to find a lender.
2. Secured loans are backed by property and have a lesser APR than unsecured ones. However, if you do not repay the loan on time, you risk losing your belongings.
3. Not all lenders may operate in your state. As a result, double-check that the lender you’re considering will move funds in your area before deciding.

How to Spot the Best Bad Credit Loan Lender?

You may apply for a loan on FundsJoy by searching for and applying to a variety of lenders in multiple states of the United States. These lenders provide loans with varying terms and conditions. So, which lender should you choose? What are the differences between a genuine and phony lender? Stick around because we’ll be here to assist you in selecting the finest.

1. Positive Customer Reviews

When you’re looking for a lender, monitor their customer feedback section. You’ll discover the lender’s overall performance, as well as what sorts of loans they provide and how quickly they respond.

2. Negotiable terms and conditions

Lenders who don’t take your requirements into account are not genuine. They’re more than happy to go over their terms and conditions. In certain cases, they prepare them to change. If a lender is unmindful of these limitations and fees connected with the loan, you will probably encounter problems in the future.

3. Payment transfer methods and timing

Loans for emergency purposes are needed quickly. Some patients may need to pay their hospital bills, while others may want to stock up on school supplies. As a result, you should always look for a lender that can transfer the money as soon as possible. The payment method they’re using should be convenient for you. You should discuss the timing and the payment method with a lender before finalizing a deal.

4. Clear and concise about charges

There are many costs involved with a loan, such as interest rate, processing fee, and so on. Always pick a lender that has made these figures obvious and concise. If you’re confused about anything, talk to them ahead of time. If a lender will not explain the overall loan amount in specifics, he or she is more inclined to charge you.

What does a Genuine Lender Ask From the Borrower?

When taking out a standard loan, a lender is primarily concerned about your credit score. They want to know what your credit score is in order to assess your financial stability. However, with a bad credit loan , a lender’s opinion of your credibility is based on the credit score, which isn’t significant because it’s obvious that the credit score isn’t good enough. So, how does a lender assess your trustworthiness? How do they get an estimate of your financial status? And what makes them confident in your loan repayment? By requesting a variety of papers that may help them better understand your financial position. Keep the following documents prepared ahead of time to avoid delays in your loan approval. Continue reading to learn what these papers are and why they’re needed:

1. Proof of Income

Lenders want to make sure you will repay the loan on time. They may request documentation of your income as a way of making this assurance. Payslips, W-25 forms, 1099s, and tax returns documents are all acceptable. Your lender may want to see your bank statements in order to analyze your spending and monthly budgeting. Keep in mind that lenders are well-versed in this area and can make a lot of judgments based on your bank statement.

Last, in certain cases, your lender may also ask for your employer’s contact information to take feedback on your performance and maybe to confirm your employment there. You can get all these documents from the Human Resource Department of your organization.

2. Proof of Identity

Lenders want to make sure you are a US citizen with a good credit score. They also need this information to confirm that you don’t have any criminal convictions. A national identity card, passport, or driver’s license can all be used as proof of identification. In some situations, the lender may request utility bills instead of just a bank statement.

3. Loan purpose

Although this might not be something that everyone likes to do, it is usually a good idea to provide the lender with your reasons for borrowing. It allows the lender to grasp your emergency and develop and offer targeted towards your needs. For example, if you’re taking out a loan to pay your registration fee, you may show them the challan form; however, if you want to pay hospital bills, you can show them those receipts. It’s critical to be honest with the lender about your needs so you can get the greatest possible offer.

Get your documents ready. What to do next?

After you’ve gathered these documents, you’re ready to go, apply for a loan for bad credit right away! To do that, begin looking for a lender. Remember how we advised you to review their feedback and terms and conditions when selecting a lender? After that, a few lenders negotiate the fees and terms with them. Finally, select a lender who is giving you the best offer. When looking for a loan, choose a lender who does not perform harsh credit checks. It will not harm your credit score, so don’t be concerned.

After you submit an application or complete a transaction, they subject your credit to a rigorous check. Keep in mind that hard credit checks have a detrimental effect on your credit score. To prevent wasting time, you should have the mortgage refinancing done only when you are confident that you will deal with that lender. Finally, read the terms and conditions once more before signing a contract to ensure that you will keep your loan payments on time.

1. What is a bad credit score according to FICO?

According to FICO, a credit score of 600-660 is good enough. However, in order to maintain your credit score fair in the long term, strive for a much higher score than this since even a point below 600 would be considered an extremely poor credit score.

2. Should you avoid payday loans?

Payday loans are very easy to get and do not require a good credit score.They are available at exorbitant interest rates and the conditions are frequently disadvantageous to you in the long run. The APR ranges from 300% to 400%, and the fees involved with them are equally scandalous. As a result, we recommend you avoid taking a payday loan unless it is absolutely required.

Some lenders try to persuade you into a payday loan without first informing you of the option. They do this in order to take advantage of the high-interest rates. However, based on the following indicators, you should be able to tell whether a payday loan is legitimate:

1. Loan amount is small
2. Repayment schedule is short
3. APR is high

These are the most common indicators of payday lending, and if you notice them, let your lender know you do not want to take out a payday loan.

3. Where to get a bad credit loan in America?

FundsJoy is the greatest site to take a no credit check loan if you’re a US citizen over 18 years old. Their quick customer care and an enormous network of lenders will ensure that your experience with them is pleasant.

4. What is the Annual Percentage Rate (APR)?

The Annual Percentage Rate (APR) is the interest rate you must pay each year on a loan. It incorporates both the nominal interest rate and any fees relating to the loan. The APR is determined by your loan’s type. Personal loans and installment loans have interest rates that range from 4.99% to 450%. The interest rate on a personal loan can be anything between 4.99 percent and 450%, while an installment loan may have an interest rate of 6.63 percent to 225%.

The APR you must pay is not based on the amount of money you make. It is determined by your lender, and you are completely free to negotiate it with him. It depends on several criteria, including your credit score, monthly income, credit history, and other information supplied by your lender.

Online bad credit loan lending is not rocket science if you know every aspect of it. After reading our comprehensive guide on bad credit loans, we hope you are now well-informed enough to get a loan when you need it and that any concerns caused by these loans may be resolved. Simply keep in mind to select a lender carefully and pay back your loan on time!

=> Visit the FudsJoy.com Official Website Now To Apply For a Loan!

A bad credit score can truly put you in the worst financial situation. Once you are in that category, you’re seen as a high-risk individual to lend to. As a consequence, you have a host of issues to contend with; very high-interest rates, security deposits, short repayment terms, and much else is what you can expect with bad credit.

Naturally, if you’re trying to avail of emergency loans, you must already be in a financial emergency. In such situations, additional stress isn’t what you’re after – but it’s all you seem to be landing yourself in. Lenders are there to help consumers with all credit scores whenever they require rapid cash. Some of the most crucial elements to consider when looking for emergency loan lenders are how much the loan will cost, the conditions you can acquire, and how soon you can apply and get funded.

Luckily, there are solutions for people like you. In this article, we’ve put together a list of the top lenders for emergency loans with bad credit out of the hundreds out there. We’ll tell you why we think they’re the best, what they offer, the pros and cons, and other general information when it comes to getting a loan.

So what are we waiting for? Let’s get to it!

Top 4 Sites For Bad Credit Loans With Guaranteed Approval On The Market:

After analyzing many lenders and their strengths and weaknesses, we’ve come to the companies on this list. If you’re struggling to find a loan with your credit score, these are legitimate lenders that you can go to if you’re struggling.

1. Money Mutual— Overall Best Online Lender For Bad Credit Loans With Guaranteed Approval, Editor’s Pick
2. Bad Credit Loans – Best Emergency Loans For Bad Credit Borrowers Online
3. Cash USA – Popular Same Day Loans With Instant Cash Approval
4. Personal Loans – Best For Unsecured Personal Loans With No Credit Check

#1. Money Mutual – Overall Best Online Lender For Bad Credit Loans With Guaranteed Approval, Editor’s Pick

Money Mutual is an online marketplace that connects the borrower to the lender. While the website has some basic requirements such as being 18 and having a checking account, its strictest requirement is that it asks borrowers to have 800$ in monthly income. The application process here is significantly simple, with some basic questions that need to be filled.

There’s no cost for Money Mutual’s services, and it doesn’t ask you to do a credit check either. This is a plus point because a hard credit check reflects badly on the borrower’s credit report. Money Mutual has other ways of checking your credit.

These are things like the monthly income requirement, your past payment history, and other details about your financial history to measure how creditworthy you are.

As for where its services are available, you can find Money Mutual in every state except New York and Connecticut.

Money Mutual is quite a legitimate website, with over 3,400,000+ verified reviews on Consumer Affairs.

Money Mutual follows a simple and relatively quick process. Once you fill in the application and provide the relevant details, it connects you to its network of lenders. Money Mutual has over 60+ lenders that work with individuals with bad credit. These lenders will then review your case, and you will be paired with one accordingly. Money Mutual informs the borrowers that the lenders it connects them with may have terms and conditions of their own, and the loan borrowers may receive depending on their independent qualifications.

Money Mutual focuses on short-term loans, so if a payday loan, personal loan, or anything similar to that is what you’re looking for, this is a good website to opt for.

Money Mutual focuses on bad credit loans, so it’ll pair you with lenders that accept poor FICO scores below 600. However, the website isn’t responsible for the interest rates and other details of the loan. These change from lender to lender.

Money Mutual is renowned for its speed. With its extensive network of lenders and the easy online process, borrowers can expect funds in as little as a day. For this reason, it’s at the top of our list for emergency loans with bad credit. In a tight situation, fast funds are what you’re looking for.

Highlights

• Fast service
• Specializes in bad credit
• A very good option for short-term loans, these are easier to process and quicker to fund, which is why Money Mutual usually gets their borrowers the money quickly
• No costs for their services
• Many verified reviews

Pros

• Many kinds of short-term loans are available, such as payday loans, advancements, installment loans, and more
• Part of the Online Lenders Alliance
• No credit check
• Connects you to lenders very fast

Cons

• High monthly requirement of $800
• Not available in New York and Connecticut, and only available in the USA

⇒ Visit the Official Website of Money Mutual

#2. Bad Credit Loans – Best Emergency Loans For Bad Credit Borrowers Online

Established in 1998, making it one of the oldest online marketplaces on this list, Bad Credit Loans is another online platform that connects the individual and the lender. Compared to Money Mutual, the requirements are a lot more relaxed on this platform.

To apply for the services of Bad Credit Loans, you need to be 18, have a bank account, provide your Social Security Number, and your residency as well as proof of citizenship. There’s no monthly income requirement, which makes it a lot more accessible regarding who can apply. Although there is no minimum credit score requirement for this brand, it does charge high rates and origination costs.

The overall process is similar to Money Mutual, and you need to fill out a simple process that takes a few minutes to cover. Once this is down, it’ll immediately run your case against its network of lenders. In a while, you’ll have lenders willing to work with your case based on your credit score.

It’s important to note that Bad Credit Loans are also not responsible for the individual terms of the lenders. These are very situational and are decided by the lender and your credit score.

At Bad Credit Loans, you can expect loans from $500 to $10,000. The services of Bad Credit Loans are completely free of cost.

On top of that, all the loans offered at Bad Credit Loans are unsecured. Unsecured loans mean that you won’t have any collateral if you fail to repay the loan. None of your belongings will be at risk.

There’s a lot of variety in terms of loans, and you can get:

• Mortgages, which are property-based loans.
• Business Loans, which are for any business-related endeavor.
• Auto Loans, specifically for any expenditure related to vehicles.
• Student Loans, which are for university fees and the like.
• Personal Loans, which are for any personal purchases.
• Debt consolidation loans, which fuse multiple loans into one loan with a lower interest rate.
• As you can see, the variety in terms of loans is high here to cater to any emergency.

As the name implies, this website specializes in bad credit and pairs you with lenders who work with bad credit individuals. If you have a low FICO score rating and need cash urgently, this is a website for you. They offer their services in every state as well.

However, one thing to note is that personal loans usually cap out at $5,000 for people with bad credit.

Highlights

• An experienced platform. It’s been around for quite a long while
• Very fast funding speed
• A diverse selection of loans
• More relaxed requirements
• Available in every state
• Free service

Pros

• All loans are unsecured
• One of the few places to offer debt consolidation loans
• Good reviews on multiple websites
• Good for short-term loans needed in an emergency
• Easy and accessible application process

Cons

• Not accredited by the BBB
• High APR rates
• The website can be a bit misleading. It says it offers up to $10,000, but personal loans tend to max out at a much lower amount

⇒ Visit the Official Website of Bad Credit Loans

#3. CashUSA – Popular Same Day Loans With Instant Cash Approval

Established in 2015 by bringing together various lenders, Cash USA is an online platform specializing in lending to individuals with bad credit.

This website specializes in two things: dealing with bad credit and peer-to-peer borrowing. Peer-to-peer borrowing refers to a process that lets individuals borrow from other people directly. Cash USA deals with all kinds of credit, whether you have no credit, poor credit, or fair credit.

The online process is just as simple and quick here as it is in the previous two, and once your information has been recorded, they will forward it to a list of lenders willing to work with your case and credit score.

Cash USA also will only do a soft credit check of your credit report. This doesn’t negatively impact your credit score and won’t appear on your report.

Cash USA has some requirements that are a bit stricter than the sites mentioned on this website. It requires you to be a US citizen, be 18+, have a checking account and provide your phone number; which all seem like basic requirements, but the strict one is the $1,000 monthly income requirement. But, that is after taxes and can be hard to meet for some borrowers.

The loan terms offered at Cash USA are between 3 to 72 months, but this can vary from lender to lender. The APR is 5.99% to 35.99%.

At Cash USA, you can get debt consolidation loans, mortgages, personal loans, medical loans, and auto loans. With a large selection of loans, and a high limit ranging between $500 to $10,000, and over a million monthly users, Cash USA is a great choice to opt for if you need cash urgently but don’t have the credit to apply elsewhere.

Cash USA works to connect you with lenders who won’t only just work with your credit score but are also relevant to the kind of loan and the amount you need. In turn, it makes it very convenient and efficient. It also helps borrowers save a fair bit of time they’d otherwise spend on sifting through loan offers and websites.

Highlights

• Variety in loans
• Everything is online, from applications to payments
• Very fast at connecting you to a lender due to how the process works. It connects you with relevant lenders
• Offers medical loans and debt consolidation loans

Pros

• Loan variety
• Very simple process
• B rating from the BBB
• Offers unsecured loans, so no collateral

Cons

• High monthly requirement
• High APR rates, although this is to be expected with bad credit

⇒ Visit the Official Website of CashUSA

#4. Personal Loans – Best For Unsecured Personal Loans With No Credit Check

PersonalLoans is an online marketplace that excels at large loans due to the high borrowing limit of $1,000 to $35,000. It’s also one of the few online platforms to offer loan terms from 3 months to 72 months. The APR is the industry average of 5.99% to 35.99%. However, as previously said, people with bad credit can expect themselves to find higher APR rates than if they had good credit.

Another benefit of this platform is that, like the rest, they only do soft credit pulls, which allows you to check rates without having your score negatively affected. A secured personal loan is the closest thing to a quick-approved personal loan.

They also have a large network of lenders, and with the easy application process and fast funding speed, you can expect your financial issues to be taken care of pretty quickly. A personal loan is an unsecured loan that you can use for any purpose. However, it lacks loan variety. There are three types of loans available at PersonalLoans:

• Peer-to-peer; refers to letting individuals borrow directly from each other.
• Personal installment loans; these are paid off in regular installments, which are agreed upon before the loan is given.
• Bank personal loans; personal loans can be used for a variety of purposes, depending on the borrower.

Though it lacks loan variety, it excels in offering personal loans, as the name implies.

Besides the soft credit union, personal loans check your creditworthiness through other means, such as your bank statement, your monthly income, and your bank details.

After this information has been processed, it will match you accordingly with a lender when it finds one appropriate to your case and the kind of loan you want. Some personal loan lenders may even deposit the funds into your bank account the same day you’re approved for financing.

There are the usual requirements of being a legal US resident, your Social Security Number, and is 18+. While PersonalLoans does not have an income requirement, it does need you to show your source of income. It can be from a job, or social security benefits, or disability benefits. A checking account will also be necessary.

Highlights

• Very high loan amount
• Fast process
• Specializes in personal loans
• Relaxed application requirements

Pros

• Good for small or big loans
• All loans are unsecured
• Large network of lenders, so you can find someone favorable to you

Cons

⇒ Visit the Official Website of Personal Loans

How to Choose the Most Suitable Emergency Loan Option And The Best Lending Agency?

When coming up with this list, we prioritized a few areas.

• Their speed – In an emergency, you need cash, and you need it fast. One of the key factors for this list was how fast the mentioned companies delivered the funds. All four of these companies deliver results in a day at the earliest.
• Do they check your credit? – Another factor was whether or not the lender would do hard pulls on your credit. Surely, you don’t want anything to affect your credit score further badly, and that’s why we picked companies that either don’t do credit checks or if they do, it’s a soft pull, which doesn’t affect your report.
• Legitimacy – Getting a loan can mean encountering many predatory lenders. All of the mentioned companies have good reviews on multiple sites and do not directly promise to get you a loan with perfect terms, only to connect you with lenders who are willing to work with you. Installment loans, on the other hand, can be deposited quickly and need monthly payments.
• How they stack up to other platforms – After analyzing and comparing factors like funding speed, their network of lenders, the types of loans available, the application processes, and more – these websites offer the most accessible and helpful loans compared to other lenders.

Things You Need To Know Before You Apply For a Bad Credit Loan

1. Inquiries – you don’t need to be cautious of credit pulls or soft credit checks. These don’t show up on your credit report and will not negatively affect your score, and in fact, you should take advantage of this as much as you can. It allows you to window shop by looking at different rates and finding the best deal for you without affecting your credit score.

Only a hard credit pull can negatively affect your credit score, and the marketplaces we’ve gone over so far don’t do hard credit pulls.

1. Credit repair – You should know that pulling up your credit report is also something you can do by contacting one of the 3 credit bureaus. Credit repair through a credit repair company is usually the best bet, but if you’re financially struggling, putting some effort into repairing your report might be a good idea.

You should check to see if there’s any inaccurate or negative information that shouldn’t be there. If there is, you can dispute the company with the bureau and can get them removed. This will help you improve your score, which will help you find better interest rates and deals.

1. Secured loans – you want to be wary of these. They’re not necessarily bad, but they come with high risk. A secured loan takes collateral if you’re unable to pay back the loan you owe, whereas an unsecured one doesn’t take any collateral. Unsecured loans come with higher APRs, but nothing you own is at risk, whereas the opposite is true for secured loans.
2. Applications may not mean approval – just because you applied doesn’t necessarily mean you’ll get a loan. You may even get a match, but the deal may not carry all the way through. Remember, marketplaces only offer to connect you with a lender; the rest is between you and them. As such, they’re not responsible if you fail to get a loan or if the lender rejects your case for any reason.
3. Documents – Make sure all your documentation is in order. The less time you waste on getting your papers sorted, the faster you’ll be able to apply for a loan and get one.
4. Your capability – before you apply for any kind of loan, remember to budget the amount you’re borrowing into your monthly/yearly expenses. Is the amount you’re borrowing something you can realistically afford to pay back? If it’s in installments, then that’s all the more reason to budget. You should know how much of your paycheck you can safely spend on paying back a loan.
5. Terms and conditions – before you sign anything, read all the terms and conditions a few times and make sure you understand everything clearly. A good loan is both favorable to the lender and the borrower. Anything else treads on exploitation.

Therefore, you should know everything about the fine print before signing and moving forward with your loan. Be very wary of lenders that aren’t transparent with you about these terms and conditions, and avoid them if they pressurize you into taking any sort of loan.

FAQs About Emergency Loans With Bad Credit

Here, we’ve compiled some frequently asked questions about lending marketplaces and how the entire process works. Loans are usually taken through a bank, and for first-time users of platforms like these, it can be a little strange and foreign.

Q1. How Do Lending Marketplaces Work?

Online lending platforms like the ones we’ve mentioned function very simply. They became popular due to the 2008 financial crisis. A lot of lenders needed a way to connect with borrowers, so lending platforms came into play.

They act as an online bridge between the borrower and the lender. Once you’ve given them your information, they’ll start connecting you to their list of online lenders that they work with. It’s that simple. However, there are some things you should know about these marketplaces.

They aren’t directly responsible for the lenders. They can only connect you and match you with one. This means that everything after that is between you and the lender. APR, origination fees, interest rates, repayment terms, and whether or not they lend you the money and finalize the deal is all between you and them. Any online marketplace is not responsible for this. Also, the terms and rates you see on an online platform may not be representative of the actual terms and rates you’ll get. This is something that varies from lender to lender.

They also won’t settle any disputes between you and the lender. Don’t expect them to help out with anything more than saving you a lot of hours by finding you a relevant lender.

Q2. Are They Legitimate?

There are many scams out there, but the websites we’ve mentioned so far are legitimate. Before going forward with any marketplace or lender, it’s a very good idea to do a background check yourself. This means going around, gathering reviews, asking people who have used these platforms, and checking for any potential red flags before you proceed. Although a no-credit-check loan is the easiest type of unsecured personal loan to get approved for, it isn’t necessarily the best choice for everyone.

Q3. How Can I Tell If A Platform Or Lender Is A Scam?

There are some signs that, if you know how to pick up on them, will let you know whether a lender or a platform is a scam or not.

1. Transparency – the platform should be extremely clear and transparent about what it can and cannot do for you. Marketplaces that offer you deals that sound too good to be true or offer you anything else besides connecting you with a good lender are most likely scams and aren’t worth your time or money. Marketplaces that aren’t clear with you about things like loan terms, APR rates, and other important financial details are also ones you should steer clear of. A legitimate lender or platform will always be transparent with you.
2. Pressurizing – If any lender affiliated with a marketplace or a marketplace itself pressures you or overly persuades you into accepting their loan, that’s a sign to jump ship and run. Any legitimate lender or marketplace will not pressurize you into taking their services and will usually emphasize that you don’t have to sign anything you don’t want to or think you shouldn’t.
3. They don’t act professional – have you noticed that all the websites we’ve mentioned do some sort of credit check of your financial history? It is a sign that they’re legitimate. Lenders and platforms that don’t do any sort of credit check on you or your financial history are usually looking to do a quick scan and get away with it, and you should be wary of these kinds of loans.
4. Check reviews – before you go forward with any platform, it’s very important to check the reviews of actual users who have had experiences with them. This can help you see potential scams, as even if you pick up on every sign, some websites are very good at appearing legitimate. The Better Business Bureau is a good place to visit for a plethora of information on multiple lending platforms. Know who you’re dealing with before you sign any sort of deal.
5. Faking information – if a lender asks you to fake any sort of information, whether your credit history, income, or legal identity, that’s a very surefire way to tell they aren’t legitimate.

Q4. What Should I Do For Better Interest Rates?

You can do a better deal overall or better interest rates to clean up your credit report as much as possible. It can help you be more creditworthy, and it can improve your credit score. Even the slightest improvement to your score is worth it, as it can be the difference between poor or fair credit. This can help you get better interest rates and avoid things like security deposits and other hassles you have to deal with due to bad credit. If you feel like there’s any sort of information on your credit report that’s inaccurate, it’s not a bad idea to go to the bureaus and see what you can do about it. You can also go to a credit counselor to see what you can do about cleaning your credit report if a credit repair company isn’t something you can afford right now.

Q5. What Are My Alternatives?

If you fail to apply for a loan through a lending platform, you can still choose alternatives. Non-profit organizations, credit unions, and family and friends are a good last resort. With places like credit unions, you can get a better deal and lower interest rate than you would elsewhere.

Q6. Will My Information Be Misused?

You may be cautious of handing out precious legal information about yourself to an online platform. You wouldn’t be wrong in being cautious either; there’s a lot of places on the internet that misuse your information. However, with the websites we’ve mentioned, you don’t need to be worried about that.

Your informa,l be protected. Still, be wary of websites that ask for unnecessary details or too much information. They’re most likely a scam.

Conclusion On Loans For Bad Credit

To summarize, online marketplaces are a very viable option to go for if you’re suffering from bad credit. Many issues come with that; you’re not eligible for most loans, the kinds of loans you have access to are very limited, and if you do find one, you have to deal with issues like high-interest rates and additional fees. Your loan agreement will contain specific terms and conditions. After approving a loan application, most emergency lenders deliver loan proceeds to the borrower’s account within a few business days.

On top of that, the entire process takes an incredible amount of time that you may not have to spare. After all, in this day and age, time is money.

That’s why online marketplaces have skyrocketed in popularity. They act as a no-nonsense middle-man between you and the lender. You only need to give the relevant information they ask for. Once that’s done, you need to wait until you’re matched with a lender simply. By trimming down the process, you save a lot of time. Legitimate platforms like the ones we’ve mentioned also work on finding you a good deal, so if you have a bad FICO score and you want a short-term personal loan, they’ll work on finding you a lender that gets you exactly that.

It can be hard to trust an online platform, especially when it comes to lending, which was an industry already plagued with scams even before the advent of online marketplaces. Still, as with any industry, there are proper safe places to go to.

Hopefully, this article has helped you find some places to contact if you need an emergency loan with bad credit and has helped answer some questions you might have about online platforms and how to know which one’s safe and which one isn’t. Finding a loan with bad credit can be tricky, but it doesn’t have to be.

Banks will be put under the microscope as part of the Consumer Financial Protection Bureau’s initiative to eliminate so-called junk fees, chief executive Rohit Chopra warned Thursday.

The collection of free royalties has spread to every sector of the economy — from hotel fees to concert ticket surcharges to insufficient funds charges imposed by banks, Chopra said. The proliferation of itemized charges on invoices obscures the true price of products and services, making it harder for consumers to shop by price, he said.

“People are sick of this fee drift that’s spreading throughout the economy,” Chopra said in an online chat with The Washington Post that was open to the public. “The bank is a stronghold of many of these fees, and consumers want to know what’s going on with that. In many cases, these are charges for which no service is provided or for which the bank or financial institution does not even do any work. »

The examination of bank charges should intensify in terms of monitoring. It remains unclear if the CFPB plans to propose a rule to limit these fees.

“What we really need to understand is: are financial institutions competing on an upfront price and can consumers buy it, or are all of these unwanted fees basically being rolled in later in the process? ” Chopra asked. “We are still looking at all of our options on this. We expect us to refine our prudential oversight of institutions that are dependent on these fees. I think all options are on the table.

Chopra also offered a limited compliment to the dozen large and medium-sized banks that fell or braked overdraft fees – or has pledged in recent weeks to do so.

“I think a lot of institutions are realizing that in the long run, they have to stop relying on these fees,” he said. “We are already seeing some of it. Honest actors are already staying ahead of the game, and I expect more to follow. It’s a small step in the right direction. »

Banks collected about $15.5 billion in overdraft and insufficient funds fees in 2019, although the percentage of fee revenue has been declining for years, according to the CFPB.

Richard Hunt, president and CEO of the Consumer Bankers Association, accused Chopra of making unsubstantiated claims about fees in his latest attack on the banking industry. The association says the fee crackdown is unjustified.

“The office should focus on seeking feedback and working in tandem with [bankers] — the very people on the front lines who interact with customers every day — to recognize the value these products and services have in the lives of the people we all work to serve,” Hunt said in a press release.

When asked about cryptocurrency, Chopra spoke generally about consumers needing a real person to talk to in a business if something goes wrong.

“Most of its use right now is really in speculative trading,” Chopra said. “I think there’s a big question that a lot of people ask me when we talk or think about crypto, and one of the things they wonder is who do they turn to when something goes wrong. not?”

During the crypto discussion, Chopra reiterated his concerns that big tech companies are looking to gain too much control over the financial system.

“More and more companies follow us, collect our data and monetize it. And I really wonder what these giant tech companies are doing,” he said. “It’s a concern when it comes to how Big Tech is gobbling up more and more power in this country.”

In December, the CFPB launched investigation buy now/pay later installment loans, which have become a $100 billion market. Chopra said the office is trying to understand how the business model works and what its adoption means for young consumers in particular.

“There are questions that we have asked about how this collected data is used and how the credit report works with all of this,” he said.

In one blog post On Thursday, the CFPB released a list of the top 20 banks based on overdrafts and insufficient funds fee income for the nine months ended Sept. 30.

Last year, Wells Fargo at the top of the list earning $1 billion in commission income, followed by JPMorgan Chase with $924 million and Bank of America earning $823 million. TD Bank came in a distant fourth with $347 million in fee income.

Rebecca Borne, CFPB’s policy and policy officer, and Amy Zirkle, CFPB’s payments and deposits program manager, wrote in the blog that the CFPB is working to reduce banks’ reliance on overdraft fees and insufficient funds under its larger initiative to reduce unwanted fees to save consumers billions of dollars.

Yet, the vast majority of Bank charges are covered, if not prescribed, by existing laws including the Truth in Lending Act 1968 and the Credit Card Accountability and Disclosure Act 2009.

The CFPB is also looking closely at the auto loan and credit card markets to assess whether interest rates are competitive.

“I’m very concerned that consumers don’t always face a competitive market when it comes to interest rates on their credit card,” Chopra said. “So that’s something we’re looking at at all levels.”