Alex Bossert

The Long Case For Nicholas Financial

The company is growing its loan portfolio and making much better loans because most of their competitors are distressed. The loans the company is making are getting more profitable as their competition has diminished during the credit crisis. The average discount of new loans purchased has risen to 9.29% from 8.87% a year ago. At the same time the new loans are becoming more profitable they are also being made with more stringent credit standards:



"The primary changes include; raising the minimum income required by the debtor to qualify for loan approval, reducing the maximum dollar amount that can be advanced for certain loan applications, and the maximum dollar amount that can be approved by a branch manager on certain approvals."

1st quarter 10Q

On 2007 Sep 25 09:04 AM Alan Brochstein wrote:

> Why is AR growth so high despite slowing revenues? With so much of
> the equity of the company tied up in AR, this is very alarming. AR
> grew 12% over the past year on 7% top-line growth. In FY2007, Revenues
> grew $4mm, but AR increased $24mm. It seems like they are growing
> their portfolio despite the weaker recent credit experience.