OnDeck US$500m SME Loan Securitisation: 2026-2 Credit Risk and Charge-Off Data

Enova International is preparing a US$500.25m securitisation backed by small-business loans originated through its OnDeck platform, with newly disclosed credit data showing annualised net charge-off rates of 14.5 per cent on a comparable portfolio of credit lines.

The proposed transaction, OnDeck Asset Securitization IV Series 2026-2, would issue four classes of fixed-rate asset-backed notes secured by a revolving pool of US small-business receivables, according to a 3 November filing with the US Securities and Exchange Commission and preliminary ratings information from KBRA.

The financing has not yet closed. Its final terms and timing remain subject to market conditions.

The structure would allow OnDeck to convert existing and subsequently acquired business loans into funding from institutional investors. Proceeds would be used to purchase eligible loans for the securitisation, while money received by Enova from the issuing subsidiary would be available for general corporate purposes.

The issuer would be solely responsible for the notes, which would not be guaranteed by Enova or OnDeck. The revolving period is scheduled to continue until November 2029 unless an earlier amortisation event occurs.

Credit performance is central to the investment proposition.

Supplemental information released alongside the proposed offering showed annualised net charge-off rates of 12.87 per cent for term loans and 14.5 per cent for lines of credit as at 30 September 2026. These figures relate to defined historical servicing portfolios, not projected losses on the new securitisation.

The data covers selected US loans with original terms of no more than 24 months and specified minimum yields of at least 10 per cent, excluding origination fees. Enova cautioned that the information is not directly comparable with its previously published loan-performance figures and may not indicate future results.

The corresponding historical portfolios had outstanding principal balances of approximately US$1.83bn in term loans and US$1.39bn in credit lines.

The transaction illustrates how specialist SME lenders continue to use capital markets to finance short-duration business lending while requiring investors to assess potentially substantial borrower defaults and recoveries.

KBRA described the proposed financing as OnDeck’s twelfth small-business asset-backed securitisation. It follows a separate Series 2026-1 financing documented in September, highlighting the platform’s repeated use of securitisation to support lending capacity.