New Report: Main Street Businesses Bullish on Future Growth

Rhea-AI Summary

OnDeck and Ocrolus released their Small Business Cash Flow Trend Report, revealing strong optimism among small businesses. 92% of owners expect moderate to significant growth in the next six months. The study highlights key trends: 58% of family-owned businesses plan to pass on to family members, 62% accept alternative payment methods, and 73% prefer non-bank lenders over traditional banks for funding. The report analyzed responses from 525 small businesses with working capital loans and over 2 million small business financing applications during a 15-month period.

Positive

• 92% of small business owners expect moderate to significant growth
• 73% of businesses are accessing alternative lending sources, expanding funding options
• 62% of businesses have adopted modern payment methods, showing digital adaptation

Negative

• Declining reliance on traditional banking services could indicate harder access to conventional financing

Insights

Market Research Analyst

This small business survey reveals significant shifts in lending dynamics that could benefit Enova. The 92% optimism rate and strong preference for alternative lenders (73% bypassing traditional banks) signals robust demand for OnDeck's services. The increasing adoption of digital payments (62%) aligns with modern lending practices and could enhance OnDeck's ability to assess creditworthiness through transaction data.

The large sample size of over 2 million loan applications and 525 surveyed businesses provides credible market intelligence. The timing ahead of the holiday season, when small businesses typically seek additional working capital, positions Enova favorably for near-term growth. The trend away from traditional banks represents a structural shift in the lending market that could expand Enova's addressable market and potentially improve margins due to reduced competition from traditional institutions.

Financial Analyst

The data points to strengthening fundamentals for Enova's small business lending segment. The high optimism levels among potential borrowers, combined with the strong preference for alternative lenders, suggests potential revenue growth and market share expansion opportunities. The shift away from traditional banks (73%) indicates a sustainable competitive advantage for Enova's OnDeck platform.

The widespread adoption of digital payments provides additional data points for risk assessment, potentially leading to improved loan performance metrics. The multigenerational aspect, with 58% planning family succession, suggests stable, long-term business relationships that could reduce customer acquisition costs and increase lifetime value. These trends support a positive outlook for Enova's small business lending division.

CHICAGO, Nov. 26, 2024 /PRNewswire/ -- Small businesses remain optimistic about future growth heading into the holiday season, according to the latest Small Business Cash Flow Trend Report from OnDeck, the leading small business lending company at Enova (NYSE: ENVA) and Ocrolus, the document AI and cash flow analytics platform for lenders.

Key findings include:

• Optimism and Growth: Most small business owners (92%) continue feeling optimistic about future growth, expecting moderate to significant growth over the next six months.
  
  
• Family Ownership and Control: Many small business owners are eager to maintain control and build generational wealth, with 58% of family-owned businesses intending to pass their business on to family members.
  
  
• Payments: More than 62% of small businesses accepted alternative and real-time payment methods, with many small businesses accepting apps including Zelle, PayPal, Venmo, Apple Pay and Google Pay.
  
  
• Access to Credit: Small businesses are becoming less reliant on traditional banks for credit, increasingly prioritizing non-bank lenders to access capital —73% of small business owners reported bypassing traditional bank loans in favor of alternative lenders.

"Small businesses continue expressing optimism around growth prospects as the broader U.S. economy improves and we head into the holidays," said Jim Granat, Co-President of Small Business Lending at Enova. "The latest report also reflects a meaningful shift in where small businesses are first seeking funding, with nearly three-quarters reporting that they're bypassing traditional banks and instead going directly to non-bank lenders."

"Access to capital is a critical factor in small businesses' ability to succeed and grow, especially when considering challenges like seasonal fluctuations in revenue or economic uncertainty," said David Snitkof, SVP of Growth at Ocrolus. "Insights from cash flow data help small business funders consider a more complete view of businesses' financial health, ultimately giving them the tools to approve more qualified borrowers for the funding they need to thrive."

The report is based on responses from 525 small businesses with working capital loans and over 2 million small business applications for working capital financing during a 15-month period. The nationwide survey was completed between September 23-30, 2024. For more information and complete survey results, please visit: ondeck.com/small-business-trends. 

About OnDeck^®
OnDeck^®, part of Enova International, is the proven leader in transparent and responsible online lending to small businesses. Founded in 2006, the company pioneered the use of data analytics and digital technology to make real-time lending decisions and deliver capital rapidly to small businesses online. Today, OnDeck offers a wide range of term loans and lines of credit customized for the needs of small business owners. OnDeck has provided loans to customers in 900 different industries nationwide. For more information, visit www.ondeck.com.

About Enova
Enova International (NYSE: ENVA) is a leading financial services company with powerful online lending that serves small businesses and consumers who are underserved by traditional banks. Through its world-class analytics and machine learning algorithms, Enova has provided more than 11.1 million customers with over $58 billion in loans and financing. You can learn more about the company and its portfolio of businesses at www.enova.com.

About Ocrolus
Ocrolus is a document AI platform that enables faster and more accurate financial decision-making. The company analyzes documents with over 99% accuracy, regardless of format or quality, supporting over a thousand document types, including bank statements, pay stubs, and tax forms. Ocrolus provides a trusted solution to detect fraud, analyze cash flows and income, and streamline decisions for 400+ clients across a number of use cases. Customers such as Enova, PayPal, Brex, CrossCountry Mortgage, Plaid, and SoFi leverage Ocrolus automation to build delightful user experiences. To learn more, visit Ocrolus.com.

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SOURCE Enova International, Inc.

FAQ

What percentage of small businesses expect growth according to OnDeck's 2024 report for ENVA?

According to the report, 92% of small business owners expect moderate to significant growth over the next six months.

How many small businesses are choosing alternative lenders over traditional banks for ENVA's OnDeck?

73% of small business owners reported bypassing traditional bank loans in favor of alternative lenders.

What percentage of small businesses accept alternative payment methods according to ENVA's 2024 report?

More than 62% of small businesses accepted alternative and real-time payment methods, including apps like Zelle, PayPal, Venmo, Apple Pay and Google Pay.