Oportun Finacial Corporation is a relatively new lender on the scene. The company recently went public and they had a successful initial public offering. This company specializes in personal loans, mortgages, auto loans, and financial coaching services, but there is something about their philosophy that is unique and different than many other lenders. Their approach to advertising made us want to learn more about the Oportun and after looking into their story, the company profile, and their current activities, we discovered that this is one of the financial companies that bear watching, whether you're in the market for a loan or you are an investor looking to diversify your portfolio. Here are 20 things that you didn't know about Oportun Financial Corporation that you might be glad to learn.
1. They're still a young company
Opportune first opened their doors for business in 2005. They've only been in business for 14 years, but during that time, they've established a solid reputation in the communities which they serve. Their audience is estimated to be around 100 million US customers. They operate within the state of California, and they've gone a long way in helping people who previously didn't qualify for a loan to secure the necessary funding to improve their quality of life.
2. Opportun serves customers who have limited or no credit history
One of the most unique aspects of Opportun is that they have a mission to help people who do not qualify for mainstream loans to secure financing for the necessities of life. They consider clients who have not established credit history as well as people who have a limited history. Most other lenders within the mainstream financial services sector would not qualify many of the clients that Opportun serves. Their mission guides each employee of the company to work with people who are at a disadvantage to qualify for loans which are appropriate for their individual situations. Hard-working people who are gainfully employed, even those with low to moderate-income levels are considered for auto, mortgage and personal loans which will help them to establish their credit history. They give clients a chance to build and demonstrate their creditworthiness.
3. They operate on a unique model
The model that Opportun uses helps low-income people to avoid going to alternative lenders who charge astronomically high fees for their financial services. Opportun keeps their rates reasonable and they specialize in providing small-dollar loans that are affordable for their customers. It is estimated that they have helped to save more than $1.5 billion in interest and fees when their services are compared to alternative lenders. This is a considerable amount.
4. Opportun has received praise from Time Magazine
Time Magazine has named Opportun as one of the Genius Companies who are about the business of inventing the future. This is because of the innovative and humanitarian approach that they take to the delivery of services. FinTech Breakthrough named Opportun's personal loans as one of the best consumer lending products on the market.
5. They're still building and improving
This unique company is still in the process of developing their culture and expanding the line of services and products that they offer for residents of California. They're still in the process of building their community of partners, employees, and customers in a spirit of working together to improve the overall quality of life. They're consistently looking for new opportunities as they offer the support that customers need to build and improve their lives.
6. Raul Vasquez is a CEO with vision
When Raul Vasquez first stepped up to the plate in 2012, he was immediately faced with some hard decisions. Opportun was in a dire situation with their finances and there was a chance that they would have trouble making the payroll. This was 7 years ago and since that time, the company turned around under his leadership. He had the vision to transform the lender into a strong and stable organization, but it was a lot of hard work.
7. Vasquez was a Wal-Mart employee prior
Before coming to work for Opportun, Vasquez spent over nine years as a senior manager at Walmart. He shared that he learned a lot about running a big business from his years at Walmart, adn he climbed the ladder in that company, becoming their Marketing Director in 2002, and continued to rise up the corporate ladder before taking the job at Opportun. Vasquez uses strong communication which is objective-driven, collaboration and he is crystal clear about what needs to be done. He makes sure that everyone understands what needs to be done as well as what their role is in making it happen.
8. Vasquez has an impressive education
Vasquez has spent a total of 20 years in high-growth environments. His experience helped to prepare him for his role in leadership at Opportun. Prior to this, he attended one of the best business schools in the country. He holds degrees from Stanford University as well as the Wharton School of Business. These are prestigious institutions and only a small percentage of applicants are accepted for admission.
9. The name sums up the company philosophy
Opportun is a shortened version of the Spanish word oportunidad, which is translated into English as "opportunity." Their philosophy is wrapped around serving the people who are underserved by mainstream financial lenders. Prior to changing their name to Opportun, the company was called Progreso Financiero.
10. Opportun doesn't discriminate
This company maintains a strong focus upon serving Hispanic clientele, and they offer services in Spanish. You don't have to speak just Spanish or English. Everyone is welcome to come in and apply for a loan and if they meet the lenient requirements set forth by the lender, they will be served equally. Customers are made to feel welcome and comfortable at Opportun.
11. Oportun has evolved into maturity
This company has come a long way since 2005 when there were questions about its financial stability. Opportun was formerly Venture capital-backed. They've since gone public and are now considered to be a publicly-traded company, listed on the NASDAQ stock exchange. They don't require clients to have a credit score, nor collateral to qualify for loans at reasonable rates and without the hassle involved with some other lending institutions.
12. Oportun set terms for $100 million IPO
Oportun began negotiations to go public and set terms for a $100 million IPO. This is the amount of revenue that they hoped to raise through the offering of 6.25 million shares of stock in the company at a price range between $15 to $17 per share. This was a big step for Oportun but senior leadership believes that they're ready to make this move. Under the original filing, the plans were to raise $50 million, but this amount was later doubled.
13. Oportun's lending rates are expensive but they beat alternative lenders
Oportun serves clients in California, and on a more limited basis, some in the state of Texas. We recently learned that the APRs encompass a broad range, determined by creditworthiness. On the lower end, borrowers pay 20% but the interest rate can soar all the way to 67%. As incredible as this may sound, it's still a lot lower than some alternative lenders who charge several times the amount of the original loan and most of them demand that the debt be paid within a month or two, or they add hefty fees and penalties on the principal.
14. Oportun offers education
One of the things that we like most about Oportun is that they provide financial counseling for their clientele. This type of coaching can be of great value for those who do not have a lot of experience in dealing with financing or securing loans, then entering into a contract to repay the debts with interest. They explain the entire process so there are no surprises down the road for their clients. They also answer any questions that the borrower may have. This is a good practice to help people avoid defaulting on their loans.
15. Applying is fast and easy
The requirements for qualifying for a loan through Oportun are not extensive, as with some other lenders. All you need to have is valid proof of your identity, along with proof that you have a regular income. In addition, you must either live in California or Texas and have a verified address and telephone number. If you don't qualify for a loan through Oportun, you can get a co-signer who meets the qualifications and obtain the loan in this way.
16. The more loans you take out the cheaper they get
We also learned that the first loan that you take out with Oportun is the most expensive when it comes to the fees and finance charges. They offer a rate reduction on subsequent loans that you take out, but you must prove your creditworthiness by making all payments on time. Once approved for a loan you can choose your payment date.
17. Oportun can help build credit
Although the money is far more expensive than clients with good credit can secure through a mainstream bank, it's one way to help people build their credit scores. Oportun reports all payments which are made on loans with them to two major reporting agencies which are Trans Union and Experian.
18. Oportun's rates are a third of most alternative lenders
One of the purposes behind Oportun's lending program is to give customers an alternative to going with payday loans and other ridiculously high lenders whose rates can go into the triple digits. After reviewing some of the examples of the loans that Oportun grants, their fees and finance charges, the total amount to be repaid is less than a third of most payday loan companies. They also give you ample time to repay the loan, so you have more affordable payment plans that better fit in with your budget.
19. Oportun is a lender with a social conscience
This company could have no doubt followed along with other lenders in charging much higher rates for the money that they loan out, but that's not in line with their mission or their goals. While the money that they lend out comes at a high price, it is comparably lower and they're saving people who have no other option, a lot of money in finance charges and associated fees.
20. This is a company to keep your eye on
We've seen hundreds of small finance companies come and go through the past several decades. Most of them operate on a different platform and insist upon clients supplying a bank account for automatic withdrawal of the total amount owed plus fees on a monthly basis, or in some cases, the entire amount due within one month. This isn't the way that Oportun treats their customers. Of course, they must make a profit to stay in business, but they've found a formula that gives the customers a big break and still allows the company to profit. If you're an investor, this may be a company that you'll want to keep your eye on for possible investment in shares. It's early in its public trading because they've just begun testing their IPO market the last week of September 2019. It's wise to watch and see what happens and to get an idea of how the company is performing. It's something to tuck under your hat for future reference because it doesn't appear that Oportun is going to be going anywhere as their business has been doing well. It's definitely a company that bears watching in the near future.
Written by Garrett Parker
Read more posts by Garrett Parker