Cash America 2013 Annual Report Download - page 33

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The Company’s e-commerce segment offers certain consumer loans over the internet, including short-term loans, line of
credit accounts and unsecured installment loans.
The Company’s retail services segment offers short-term loans in certain domestic retail services locations. The
retail services segment also began offering secured auto equity loans in 2010 and unsecured installment loans in 2011 in
some of its domestic retail services locations. Consumer loan fees earned in the Company’s retail services segment
contributed approximately 6.3% of the Company’s total revenue in 2013, 6.8% in 2012 and 7.5% in 2011.
The Company began offering short-term loans over the internet, through what is now known as its e-commerce
segment and is also referred to as Enova, in the United States under the name “CashNetUSA” when that company was
acquired in 2006. Since then, the Company’s e-commerce segment has expanded its online product offerings into the
United Kingdom, Australia and Canada. The Company’s e-commerce segment began offering unsecured installment
loans over the internet to customers in the United States, United Kingdom and Australia in 2008, 2010 and 2013,
respectively. The Company also began offering line of credit accounts over the internet in the United States in 2010 and
in the United Kingdom in 2013. Consumer loan fees earned in the Company’s e-commerce segment contributed
approximately 42.6% of the Company’s total revenue in 2013, 36.6% in 2012 and 30.3% in 2011.
Consumer loans offered by the Company are unsecured loans, except for auto equity loans, which are secured
by the customer’s vehicle. Consumer loan fees include revenue from the loan portfolio owned by the Company and fees
paid to the Company for arranging, guaranteeing and processing loans from independent third-party lenders for
customers through the CSO programs. Due to the credit risk and high transaction costs of serving the Company’s
customer segment, the fees the Company charges are generally considered to be higher than the fees charged to
customers with top-tier credit histories by commercial banks and similar lenders who are typically unwilling to make
unsecured loans to alternative credit customers. Consumer loan fees earned by the Company contributed approximately
48.9% of the Company’s total revenue in 2013, 43.4% in 2012 and 37.8% in 2011.
The Company offers short-term loans in several states in the United States through its retail services segment
and e-commerce segment and in the United Kingdom and Canada through its e-commerce segment. Short-term loans
generally have a loan term of seven to 90 days and are usually payable on the customer’s next payday, unless the loan is
renewed or extended in accordance with applicable laws. The fees the Company charges on short-term loans in the
United States vary by jurisdiction but typically range between $10 to $25 per $100 borrowed, and the fees the Company
charges on short-term loans in the foreign markets in which the Company operates also vary but typically range between
20 and 29.50 per 100 borrowed in their respective currencies.
The Company offers line of credit accounts through its e-commerce segment in several states in the United
States and in the United Kingdom. Line of credit accounts allow customers to draw on a line of credit in increments of
their choosing within certain restrictions, subject to a minimum draw amount set by the Company, up to their credit
limit. Customers may pay off their account balance in full at any time or make required minimum payments in
accordance with their terms of the line of credit account. As long as the customer’s account is in good standing,
customers may continue to borrow on their line of credit.
The Company offers unsecured installment loans through its retail services segment and e-commerce segment in
some states in the United States and through its e-commerce segment in the United Kingdom and in Australia.
Unsecured installment loans typically have terms between two and 12 months, but may have available terms of up to 36
months. The Company also offers secured auto equity loans through its retail services segment in the United States.
Secured auto equity loans typically have terms between three and 24 months, with available terms of up to 42 months.
Both unsecured and secured installment loans require the repayment of principal in installments over the term of the
loan.
The Company monitors the performance of its portfolio of consumer loans and maintains either an allowance or
liability for estimated losses on consumer loans (including fees and interest) at a level estimated to be adequate to absorb
credit losses inherent in the portfolio. The allowance for losses on the Company’s owned consumer loans reduces the
outstanding loan balance in the consolidated balance sheets. The liability for estimated losses related to loans guaranteed
by the Company under its CSO programs is included in the consolidated balance sheets.