I like it. Revenue growth in the 18 - 20 % range. EPS growth around 26%. ROE 20 %.
Ticks a lot of the right boxes.
Niche market. Not aware of any serious competition. Previous company in this market was Household Finance but they disappeared - Apparently they were bought out then the market was abandoned but not sure about that.
I love the business model, but I think that their rates criminal.
They get the full retain price in less than 6 months, then continue for 18 more months.
I think waterheater companies have the same business model, but the rates aren't quite as bad, and they don't prey on the vulnerable.
I think loans, product financing, futures contracts etc are all perfectly legitimate and reasonable business transactions.
I actually think commodity trading and futures markets are WONDERFUL.
That being said, I have little tolerance that will use these tools to exploit people.
I wonder if you have a credit card, and what is the interest rate on such unsecured credit?
High rates are usually related to the degree of risk to the lender.
No, I simply think it's unethical to charge criminal interest rates.
There are more than enough ethical companies out there, I simply choose to deal with them.
I also think poor ethics is a business risk, why would I choose to invest in a riskier business.
I understand that many people see a significant detachment between the stock market and the underlying investment (eg company). That is not my investing philosophy.
"Criminal " is your subjective opinion. And since you are not the lender who has a responsibility to calculate risk with clients with no credit rating and bad credit, I think you word "criminal" is blather.
No, when I say Criminal, I specifically mean criminal in accordance with the Criminal code of Canada.
Criminal Code 347
"criminal rate means an effective annual rate of interest calculated in accordance with generally accepted actuarial practices and principles that exceeds sixty per cent on the credit advanced under an agreement or arrangement; (taux criminel) "
Now there is an exception that makes it legal, but yes I hold that charging an interest rate of 280% is a criminal rate, as defined by the Criminal Code of Canada.
Well the authorities don't seem to agree with you. This topic has all been discussed in another forum, and no it is not criminal. If you insist it is criminal, call the police and prove it.
Is it ethical for banks to decline to loan money to these folks? You claim that you would only deal with ethical banks, but you don't seem to grasp that the clients we speak of were rejected by the banks. Is it ethical for the banks to turn them away?
Yes, I do believe it is ethical for banks or any other lender to refuse lending services to those unlikely to pay back the loan.
I have not heard any reports that they were refused banking services.
1. I'm glad you find it is legal.
2. Why would they go there if they were not declined by the banks? Just cause you don't hear things doesn't make it so.
1. It is currently legal, but it's really on the edge and I think this is a significant business risk.
- I think the rates they charge are criminal, which is the ethical issue
2.They were declined loans, because they shouldn't be taking out loans.
They weren't denied other services, that would be a concern.
More than 20 years ago I was looking to buy a rental. I was authorized for the max I could borrow from the bank but still needed more money. After cash advances from credit cards, I still needed more. Back in those days the super high interest rate firm was Household Finance. I borrowed from them at rates similar to those cited above and the deal went through. They were the only ones that would touch me. I ended up doing well on the rental and paid all my bills on time. I don't see anything amiss with adjusting interest rates according the the risk. I was a big risk and they took the risk; I compensated them by paying their rates. If they would have had nanny state do-gooders back then blocking the deal to save me from myself, the deal would not have gone through. I might then be poor and the do - gooders might then be wanting the government to pay for my rent and food. Why would anyone want a nanny state interfering with your own judgement and financial deals? They don't care about you, they only care about looking good to do-gooders. The nanny state do-gooders will never be satisficed. Even after they run every aspect of your life they will still want more power over you.
To my recollection all these outfits have had press like this previously.
Nothing wrong with the press noising about and seeing what's what. I like their investigations of used car dealers. repair shops and what not. Where would we be without a "free" press.
All the lenders, even the big banks. charge rates according to risk. Nothing amiss with that principle. That's part of what a credit rating is about. If the banks see too big a risk, why just say no. They want high quality low risk customers. That leaves an opening for higher risk lenders. My understanding is Go Easy helps people with no credit rating or poor credit rating get a higher rating thereby earning a lower interest rate. Besides loans, they are offering experience and learning which, if effective, can only strengthen the financial fabric of the country.
The do - gooders offer nothing but preventing the cat from sitting on the hot stove. No learning, no experience, just micromanaging.
The alternative lenders would have a stronger argument if they were more transparent on their interest rates and lending practices.
Requiring someone to to sign up for expensive "disability" insurance that is full of disqualifications, isn't teaching anything.
Advertising low interest rates that they never give to anyone is misleading. Telling people they can re-apply at a lower rate after a year is a falsehood.
In any event, I wouldn't want to see the alternative lenders disappear without a replacement in place.
A government secured loan from a COOP or charitable organization could do a better job of "teaching" while helping the clients.
Governments have exclusive powers of collection, so the default risk is largely mitigated and they can charge a lower rate of interest.
If this is true and you can find it out, why can't clients of these lenders find it out? You imply that a nanny state is required. When you get a nanny state you end up with a nation of toddlers who always look to nanny to fix things. What happens when the head nanny turns out to be a psychopath? Then you have a nation of toddler sycophant's who blindly follow Head Nanny. I prefer people who are educated, either self educated or otherwise, who can stand on their own two feet and think for themselves.
Go do it then. set yourself up as the charitable organization. No one is stopping you.
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