Study: Consumers Disproportionately Experienced Financial Impacts of COVID-19

Rhea-AI Summary

Elevate Credit (NYSE: ELVT) and SpringFour have released a study examining the COVID-19 pandemic's financial impact on American households. Key findings reveal that 20% of respondents faced job losses, primarily due to the pandemic. Non-prime consumers utilized stimulus funds mainly for essentials like food and housing, while prime households tended to save. This highlights the financial instability among non-prime demographics and the need for enhanced support from financial institutions. Elevate has originated $9.2 billion in non-prime credit, aiding over 2.6 million consumers.

Positive

• Elevate has provided $9.2 billion in non-prime credit, benefiting over 2.6 million consumers.
• The company saved customers over $8.5 billion compared to payday loans.

Negative

• 20% of surveyed individuals reported job loss, pointing to ongoing economic challenges.
• Non-prime consumers are more prone to using financial aids for basic needs, indicating continued financial volatility.

Elevate’s Center for the New Middle Class and SpringFour Partner to Advocate for Families in Need of Greater Financial Resources

FORT WORTH, Texas--(BUSINESS WIRE)-- Elevate Credit, Inc. (NYSE: ELVT) (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, and SpringFour, the only social impact fintech platform that helps financial institutions give customers the support they need to regain financial control, today announced the findings of a research study examining the financial effects of the COVID-19 pandemic on American households. The study, which was co-authored by Elevate and SpringFour, found that the pandemic’s impact on American households was uneven, and that those who struggled require support beyond what traditional financial institutions provide.

The study analyzed data collected by Elevate’s internal thinktank, the Center for the New Middle Class (“CNMC”), which surveys prime and non-prime consumers monthly to understand the behaviors, attitudes, and challenges of this growing demographic. CNMC defines prime as those with credit scores above 700 and non-prime as those below 700. The study also analyzes SpringFour data on demand for financial resources in over 30 categories of need, in addition to SpringFour survey data on impacts of the pandemic.

Among the 10,580 people who were surveyed by CNMC, the following key findings emerged:

• Approximately 20% of respondents reported a job loss over the past year.
• Of the 20% who reported a job loss over the past year, 75% of both prime and non-prime respondents said that the job loss or furlough was due to the pandemic.
• Non-prime consumers overall were much more likely to spend a portion of their stimulus on basic needs like food, utilities, housing or medical costs.
• Approximately 50% of non-prime consumers reported spending their stimulus checks on food or groceries versus less than one third of prime consumers.
• Twice the percentage of non-prime consumers spent funds on housing than prime consumers.
• Prime households were much more likely to use stimulus funds for savings than non-prime. This suggests that prime households have achieved increased financial stability and are better prepared for unforeseen expenses.

“The income volatility that resulted from the pandemic put many already financially vulnerable Americans into an even more challenging situation. While we can’t predict when unexpected events such as the pandemic will occur, we can be better prepared. That means equipping both prime and non-prime Americans with the tools and resources they need to make informed decisions about their finances so that they can meet their basic needs, reach their savings goals, and achieve long-term financial stability,” said Jason Harvison, CEO of Elevate.

Analysis of SpringFour data on consumer demand echoed CNMC’s findings, citing that the organization facilitated 5 million referrals to nonprofit and government agencies in over 30 categories of need since the pandemic began. American households are looking for resources to help them pay for basic necessities, and when unexpected funds are available, such as through a stimulus payment, consumers are likely to use it for those purposes. The authors note that if families were more aware of resources that could help them pay for food, utilities, medical costs and other basic needs, those families might be in a better position to save stimulus funds or contribute those dollars back to the economy in other ways.

“The pandemic demonstrated the precariousness of households’ financial health – and showed that banks, financial institutions, and nonprofits must all prioritize their customers’ financial health. When they do, everyone benefits – customers, companies, employees, and the economy. Now, we all must continue to step up and build on this momentum because none of our customers are immune to financial challenges," said Rochelle Gorey, SpringFour Co-Founder and CEO.

About Elevate

Elevate (NYSE: ELVT), together with the banks that license its marketing and technology services, has originated $9.2 billion in non-prime credit to more than 2.6 million non-prime consumers to date and has saved its customers more than $8.5 billion versus the cost of payday loans. Its responsible, tech-enabled online credit solutions provide immediate relief to customers today and help them build a brighter financial future. The company is committed to rewarding borrowers’ good financial behavior with features like interest rates that can go down over time, free financial training and free credit monitoring. Elevate’s suite of groundbreaking credit products includes RISE, Elastic and Today Card. For more information, please visit http://www.elevate.com.

About SpringFour

SpringFour is a Certified B Corporation and social impact fintech focused on bringing financial health resources to consumers through innovative call center and direct-to-consumer digital solutions. In 2020, SpringFour provided more than 3.2 million referrals to over 20,000 local nonprofit and government resources to help consumers improve cash flow, payment performance, and financial wellness.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210914005265/en/

Investor Relations:

Sloan Bohlen, (817) 928-1646

investors@elevate.com

Media Inquiries:

James McCusker, (203) 585-4750

jmccusker@soleburytrout.com

Source: Elevate Credit, Inc.

FAQ

What did Elevate Credit's recent study reveal about job loss during the pandemic?

Elevate's study found that 20% of respondents reported job loss, with 75% attributing it to the pandemic.

How do prime and non-prime consumers differ in spending stimulus checks according to Elevate's findings?

Non-prime consumers are more likely to spend stimulus checks on essentials like food and housing, compared to prime consumers who save more.

What is the significance of the partnership between Elevate and SpringFour?

The partnership aims to provide financial resources and support to families struggling with the economic impact of the pandemic.

How much non-prime credit has Elevate originated to date?

Elevate has originated $9.2 billion in non-prime credit to over 2.6 million consumers.

What types of financial solutions does Elevate offer?

Elevate offers tech-enabled online credit solutions, including products like RISE, Elastic, and Today Card.