Cost Value – After Hours http://after-hours.org/ Thu, 12 Aug 2021 07:46:12 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://after-hours.org/wp-content/uploads/2021/07/icon-1-150x150.png Cost Value – After Hours http://after-hours.org/ 32 32 First Solar (FSLR) Q2 2021 Earnings Call Transcript https://after-hours.org/first-solar-fslr-q2-2021-earnings-call-transcript/ Thu, 12 Aug 2021 07:46:03 +0000 https://after-hours.org/?p=2668 Image source: The Motley Fool. First Solar (NASDAQ:FSLR) Q2 2021 Earnings Call Jul 29, 2021, 4:30 p.m. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator Good afternoon everyone, and welcome to the First Solar second-quarter 2021 earnings call. This call is being webcast live on the investors section of First Solar’s website at […]]]>

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First Solar (NASDAQ:FSLR)
Q2 2021 Earnings Call
Jul 29, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon everyone, and welcome to the First Solar second-quarter 2021 earnings call. This call is being webcast live on the investors section of First Solar’s website at investor.firstsolar.com. [Operator instructions] As a reminder, today’s call is being recorded. I would now like to turn the call over to Mr.

Mitch Ennis from First Solar investor relations. Mr. Ennis, you may begin.

Mitch EnnisInvestor Relations

Thank you. Good afternoon everyone and thank you for joining us. Today, the company issued a press release announcing its second-quarter 2021 financial results. A copy of the press release and associated presentation are available on First Solar’s website at investor.firstsolar.com.

With me today are Mark Widmar, chief executive officer; and Alex Bradley, chief financial officer. Mark will begin by providing a business and technology update. Alex will then discuss our financial results for the quarter, provide updated guidance for 2021. Following remarks, we’ll open the call for questions.

Please note, this call will include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from management’s current expectations, including, among other risks and uncertainties, the severity and duration of the effects of the COVID-19 pandemic. We encourage you to review the safe harbor statements contained in today’s press release and presentation for a more complete description. It is now my pleasure to introduce Mark Widmar, chief executive officer. Mark?

Mark WidmarChief Executive Officer

Thank you, Mitch. Good afternoon and thank you for joining us today. Beginning on slide three, I would like to start by thanking the First Solar team for their passion, continuing excellence and their many achievements in the second quarter. Operationally, we have started site preparation with the recently announced 3.3-gigawatt factory in Ohio, which will further cement our position as the largest PV module manufacturer in the Western Hemisphere.

Additionally, I’m pleased to announce that contingent upon permitting and approval of government incentives that are satisfactory to First Solar, we are intending to invest approximately $680 million to add 3.3 gigawatts of manufacturing capacity in India. These next generation factories represent a significant leap forward in our technology roadmap and will produce our most competitively advantaged modules with an expected lower cost per watt and environmental footprint compared to our existing fleet. Commercially, market demand for our CadTel technology is at a record level. Seven months into the year, we have already booked nine gigawatts, exceeding our prior annual record of 7.7 gigawatts in 2017.

From a technology standpoint, our production lines are manufacturing record modules. To illustrate this point, samples produced during our regular production process were submitted for external verification and confirmed by the National Renewable Energy Laboratory at a world record 19.2% glass area efficiency for a CadTel module. For reference and in comparison, to our previous aperture area record of 19% efficiency, our new record equates to a 19.7% aperture area efficiency. Additionally, our advanced research team has been creating new optionality in our R&D roadmap.

For example, we recently deployed prototypes of early stage bifacial modules at a test facility and are pleased with the initial results. In summary, the momentum we have cultivated, paired with an increased favorable policy environment, represents a compelling growth opportunity in the near to midterm. However, before discussing these opportunities, I will first provide near-term COVID-19 supply chain, cost and market updates. Please turn to Slide 4.

As a global company with the manufacturing operations in the United States, Malaysia and Vietnam, the health and safety of our associates is our top priority, with a steadfast commitment to adhering to applicable COVID-19 protocols. As part of this effort, we are working with local governments to facilitate on-site testing and vaccination for our associates. I would also like to express immense gratitude to our Vietnam manufacturing associates who have to date elected to remain on site in order to maintain manufacturing continuity. While this clearly is a challenging time, we acknowledge your incredible resiliency, ingenuity and leadership to deliver your operational plan commitments.

While we have been permitted and able to maintain manufacturing operations in Malaysia and Vietnam to date, the rise of COVID-19 cases and potential government and other restrictions present risks to our production, supply chain, and technology implementation plans. As it relates to our CuRe program, the factory updates and tool implementations at our Vietnam site requires international travel from both third-party equipment installers, as well as our US-based associates. But we continue to work with relevant agencies in Vietnam who support this essential travel in a safe manner. Delays resulting from government and other COVID-related restrictions or an increase in case rates may impact the timing of our CuRe transition in Vietnam.

Despite this uncertainty, we continue to execute and navigate the current environment as reflected by the manufacturing performance metrics on slide four. As highlighted previously, the global shipping environment remains challenging due to port congestion, limited container availability, an increase in cancellation of shipments by logistic providers, scheduled reliability issues and other events. Since the April earnings call, shipping rates have continued to rise. And additionally, COVID-19 outbreaks and restrictions have caused disruptions in China and Southeast Asia, the impacts which have reverberated across the global logistics market.

These challenges, coupled with strong global demand, have led to a significant increase in the cost of transoceanic freight. We have partially mitigated the effects of higher shipping cost per watt through improvements in our module efficiency, implementation of Series 6 Plus, expansion of our distribution network strategy in the United States and forward contracts. However, we have seen and expect to continue to see for the remainder of 2021 adverse impacts on our financial results. For context, spot rates for routes between Asia and the United States have increased 200% to 300% from Q2 2020 to Q2 2021.

Over this period, sales rate reduced our module segment gross margin by 9 percentage points in Q2 of 2021, or 3 percentage points higher year on year. We continue to facilitate — anticipate near-term challenges, including elevated fuel cost, average vessel delays of two weeks and constrained container availability, impacting our ability to use space secured on vessels. Although these factors contribute to lower-than-anticipated shipments in Q2 and higher freight costs, we have a number of near-term and long-term strategies intended to improve our competitive position with regards to sales freight. Near term, we are working closely with our customers to limit our exposure to inflated sales and freight costs.

In certain situations, we have accommodated requests for delayed module shipments, which provide opportunities to mitigate higher freight costs. Given current vessel schedule reliability, we are adding scheduled buffers to better meet our customers’ commitments and provide greater resiliency in our shipment plan. Average sales freight from Malaysia and Vietnam to our US customers increased $0.05 per watt quarter on quarter, and in Q2 was approximately triple that of shipments from Ohio. Long term, this reinforces the strategic thesis for locating additional manufacturing capacity near to demand.

Contractually, for certain new bookings, we have employed structures that mitigate sales freight costs in excess of pre-negotiated levels. As we continue to secure bookings for deliveries two to three years in the future, this type of contractual arrangement will help de-risk the expected value of our contracted backlog. I would next like to discuss the key components of our bill and material spend, approximately two-thirds of which is made up of glass and frame costs. From a glass perspective, we have largely hedged the cost through long-term fixed price agreements with domestic suppliers that have volumetric pricing benefits as we achieve higher levels of production.

With regards to aluminum, in August of 2020, we entered into a commodity swap contract to hedge a portion of our US cash flows for purchases of aluminum frames, which ends in Q4. While we anticipate some impacts of the hedge roll — as the hedge rolls off, we intend to partially mitigate the cost per watt impact through reduced aluminum for module uses, firstly, by differentiating between interior and exterior modules. And secondly, by redesigning the frame. Finally, the cost of lumber, which is used for our shipping and packing process, was approximately 70% higher on an index basis in Q2 compared to the start of the year.

This impacted our Q2 results by approximately $2 million. Since then, lumber costs have significantly declined. And as a result, we are currently not expected to impact our 2021 exit rate cost per watt target. In summary, while cost and uncertainties remain uncertain bill of material items, we are tracking to achieve a 9% cost per watt produced reduction between where we ended 2020 and expect to end 2021.

Note while our core production costs are largely on track, the 2-percentage point decrease in our year-over-year cost per watt reduction relative to the previous expectation is largely due to the effects of higher inbound freight costs for raw materials. On a cost per watt sold basis, due to the challenging near-term sales rate environment, our revised year-over-year reduction target is 3%. Note, as a reminder, sales rate is included in our cost of sales, whereas many of our module peers report sales rate as a separate operating expense. For comparison purposes, we encourage you to consider this fact when benchmarking our module gross margin percentages relative to our peers.

Turning to slide five, I would like to provide some context on the ASP trajectory for the year. As a reminder, two years ago, on the Q2 2019 earnings call, we indicated approximately four gigawatts of our 2021 module supply was booked or contracted subject to conditions precedent. In other words, a significant portion of the volumes sold this year had an ASP agreed to two years prior to module delivery. Heading into 2020, into 2021, we were largely sold out of our available supply for the forward year.

As a result, we’ve had limited exposure to the spot market. We believe there is a strong strategic rationale for forward contracting deliveries in this manner, which provides value for both First Solar and our customers. From our perspective, contracting for future deliveries provides us confidence in our ability to sell through our expected supply and visibility into an expected profit per watt in a TV market that is typically highly priced competitive. From our customer’s perspective, these arrangements provide value through clarity and certainty of pricing, product availability and delivery timing, enabling them to underwrite PPAs from a position of strength, with a lower risk to their expected project returns.

Being able to provide the certainty to both buyer and seller is a strategic differentiator for First Solar. From a US policy perspective, both near and long-term pricing for all solar modules, is also impacted by uncertainty over legislation related to forced labor in China, tariffs, manufacturing tax credits, investment tax credits and other restrictions and incentives. Given the current lack of clarity over the form, structure and duration of potential policy changes, the near-term and long-term impacts of these on both demand and pricing also remain uncertain. Moreover, this lack of clarity needs to be balanced with the significant capacity expansions announced by our competitors.

From First Solar’s perspective, we aim to continue to work with capable, well-financed counterparties that have high certainty in the quality and execution of the projects. We also look to establish and maintain deep relationships and partnerships with our customers, delivering solutions at a fair pricing level that meets their needs and also enables attractive returns for First Solar relative to our expected future cost per watt. At the time of the previous earnings call, we indicated that the ASP across the volume of potential deliveries in 2022 was 11% lower than the volume to be shipped in 2021. Including our incremental bookings since the previous earnings call, the year-on-year decline is largely unchanged.

Looking into 2023, we are very pleased with the demand and pricing we are seeing for our CadTel modules as we continue to drive to higher wattage and efficiency levels. Although there remains significant uncontracted volume to be booked, the ASP across the contracted volume for planned deliveries in 2023 is only 1% lower than that volume planned for 2022. Note, while we have yet to commence the sales process for our next generation PV modules to be produced by our recently announced factories, they are expected to be ASP advantages to their anticipated higher efficiency and superior balance of system cost per watt profile. In summary, as we have seen a significant increase in desire to work with First Sol`ar due to our differentiated value proposition.

While pricing negotiations in the market remain competitive, we continue to secure volume with customers that value our points of differentiation with the potential for ASP catalysts in the future. Relative to this objective, we are very pleased with our record year-to-date net bookings of nine gigawatts, which includes 4.1 gigawatts since the April’s earnings call. After accounting for shipments of approximately 1.8 gigawatts during the second quarter, our future expected shipments would extend into 2024 are 17.2 gigawatts. Including our year-to-date bookings, we are largely sold out for 2021 and 2022, have 3.4 gigawatts for planned deliveries in 2023, and four to five gigawatts in 2024.

This long-term demand further supports the investment thesis behind our third Ohio factory and our first factory in India. Additionally, and as reflected on slide six, from an opportunity’s perspective, our pipeline of future opportunity also remains robust. Note, our capacity expansion in India, and the related increase in available supply to meet projected domestic demand, expands our booking opportunities in the country. And accordingly, our potential bookings in India exceeds seven gigawatts.

We’d also like to take the opportunity to address the reported use of forced labor in the crystalline silicon PV manufacturing industry, which has been highlighted by the recent withhold and release order issued by the US Custom and Border Protection, the Xinjiang Supply Chain Business Advisory from US government and the Weaver forced Labor Perfection Act which passed the US Senate with unanimous consent, an investigation by the United Kingdom and other countries in the EU. Climate change is among the most pressing issues facing society today. And fortunately, the challenges of decarbonization of the global electric mix can largely be addressed with commercially available technologies, including solar, wind, energy storage and green hydrogen. Unfortunately, the crystalline silicon supply chain is tainted by the purported use of forced labor and human rights abuses in China, which necessitates urgent action.

However, it must be understood that our global collective response to forced labor does not need to conflict with the long-term global climate objectives. While there are commercial solutions to ensure supply chain continuity, we’ve acknowledged the near-term supply challenges presented by the withholding release issue by the US Customs and Border Protection. These challenges are exacerbated by the overly complex and opaque nature of the crystalline silicon manufacturing process. While the issue of force labor represents an urgent ethical imperative that must be addressed, it also presents a strategic opportunity to drive change and an opportunity for the United States and like-minded nations to achieve energy security and technological independence through the promotion of a PV domestic manufacturing industry.

Relative to this, we strongly support the proposed Solar Energy Manufacturing in America’s Act, which was introduced by Georgia Senator, Jon Ossoff, and co-sponsored by Senators Warnock, Bennet, Stabenow. We believe that if enacted, it will help accelerate the transition to clean energy using domestically produced technology, support American energy independence and create high-quality manufacturing jobs. By creating tax incentives for vertically integrated manufacturers and for each step of the crystalline supply chain, we can establish a level playing field where all PV technologies compete on their own merits and establish a domestic capacity to support America’s climate objective. We believe the Biden-Harris administration has a unique opportunity to adopt a long-term industry policy for solar, which could include a mix of manufacturing tax credits and extension of the investment tax credit with a domestic content requirement among other strategies.

Through a long-term strategic approach to policy, the administration has an opportunity to create an environment that fosters innovation for next generation of PV. While the legislative outcome for the US infrastructure and solar remains uncertain, we are broadly encouraged by the legislative sentiment and the willingness to support US PV manufacturing to enable energy independence, security and climate goal imperatives. Turning to slide seven. Looking forward, we believe strong demand for Series 6, a compelling technology roadmap, a strong balance sheet and largely fixed operating expense cost structure and an increasingly favorable policy environment for domestic PV manufacturing in the United States and India are catalysts as we evaluate capacity expansion.

With respect to the United States, as announced in June, we are more than doubling our manufacturing capacity in the United States, adding 3.3 gigawatts at an implied capex per watt of approximately $0.20. This greenfield expansion financed by cash on hand represents an opportunity, unbound by the legacy Series 4 constraints to optimize each parameter of the factory and product design. Accordingly, this enables us to develop a new product at the intersection of efficiency, energy yield, optimized form factor, cost competitiveness, and advantaged environmental attributes. Starting in 2023, this factory of the future is expected to commence production of our next generation module, which is expected to lead the fleet in terms of efficiency, module wattage, cost per watt and environmental footprint.

Our next generation module building upon our CuRe program is expected to push boundaries of our CadTel platform in several ways. Firstly, in the mid-term, we anticipate this module can achieve efficiency in excess of 20% and with an optimized form factor enable module wattage in excess of our current midterm target. Secondly, we optimized the form factor anticipation to benefit balance of system cost per watt and consequentially, module ASP. Thirdly, through an optimization of the module’s mounting interface and an increase in automation, this factory is expected to achieve a lower cost per watt produced than our existing fleet, despite being located in a higher cost labor market.

Finally, by locating this factory domestically, we reduced our reliance on transoceanic freight costs and anticipated reducing sales freight per watt in the — for US deliveries. Our third factory in Ohio is expected to commence commercial production in the first half of 2023, scale of over three gigawatts of nameplate capacity by the end of the year and 3.3 gigawatts in 2025. Internationally, we have been evaluating the expansion of our manufacturing presence in India. Our technology is uniquely advantaged in the market due to our temperature coefficient and spectral response advantages, which can result in higher energy per watt installed as compared to crystalline silicon due to the effects of heat and humidity.

As we stated previously, we believe CuRe significantly increases our competitiveness against bifacial modules. The India PV market is predominantly monofacial due to generally low libidos, and additionally, the cost of bifacial systems exceeding the benefits of backside energy due to high capital costs, and the additional real estate needed for bifacial plants. However, given the expected lifetime energy benefit of our CuRe modules, we can achieve with no increase in balance of system costs or other project costs, we are well-positioned to capture the value of CuRe in the India market. We also thought the steps India has taken to foster a healthy domestic PV manufacturing industry, which includes a combination of federal and state incentives and national barriers.

This includes, among others, a $600 million production-linked incentive scheme with preference given for vertically integrated PV manufacturers who produce modules with an advantaged temperature coefficient. In addition to domestic incentives, India announced a solar tariff policy starting in April 2022, which includes 25% and 40% duties on imported and modules, respectively. Through its strategic approach, India has combined its clean energy targets with effective trade and industrial policy designed to enable self-sufficient domestic manufacturing and true energy security. As previously indicated, the factors in evaluating the future capacity expansion include geographic proximity to solar demand where First Solar has an energy or competitive advantage, and which could mitigate freight-related costs.

Secondly, the ability to export cost competitively into other markets. Thirdly, cost-competitive labor, low energy costs and low real estate cost. Fourthly, a competitive supply chain to support the sourcing of raw materials and components. And finally, domestic and international policies to ensure such expansion is well positioned.

In summary, we believe India meets these criteria. With the strong demand for our CadTel technology, we are eager to grow our manufacturing capacity to meet this market demand. With our expansion in the United States and India and optimization of our existing fleet, we anticipate our nameplate manufacturing capacity will double to 16 gigawatts in 2024, with the new factories combining two to three gigawatts of production in 2023. Moving on to technology.

There were several noteworthy accomplishments since the previous earnings call. Firstly, following the implementation of Series 6 Plus in our two factories in Ohio, we are now consistently producing 450-watt modules in Ohio and Malaysia, increasing our fleetwide average watt per module to 449 for July month-to-date. Secondly, our commercial production lines are manufacturing record modules, as previously discussed. Finally, our CuRe product has been certified as meeting UL and IEC standards, representing an achievement of the robust quality, reliability and safety requirements.

As we look to extend our advantages in the utility scale market, we recently deployed prototypes of early stage bifacial CadTel modules at a test facility and are pleased with the initial results, demonstrating real-world bifaciality. While this is only early stage research, we believe there is a path to increase bifacial performance, which has the potential to improve upon our existing temperature coefficient, spectral response, partial shaving and long-term degradation energy advantages. As we’ve previously stated, we believe CuRe significantly increases our competitiveness against bifacial modules. By potentially unlocking CadTel bifacial capabilities, we have the opportunity to further improve our existing energy advantage and ground mountain applications.

In the residential and C&I markets, we recognize the value of high efficiency, aesthetically pleasing and domestically manufactured product. As stated previously, we continue to evaluate the prospects of leveraging the high band gap advantages of CadTel and a disruptive high-efficiency, low-cost tandem or multi-junction device. We strongly believe that a thin film semiconductor is essential to achieving the highest-performing tandem PV modules and that CadTel, which benefits from the many innovations of our technology roadmap and has a proven commercially scaled track record is ideally placed to enable this leap forward in high-performance modules. In the mid-term, we believe there is a path to achieve a 25% efficient multi-junction PV module.

As we seek to grow our presence and competitive position in the residential and C&I markets, we believe this type of module has the potential to be disruptive and provide us with a competitive edge. I’ll now turn the call over to Alex, who will discuss our second-quarter financial results and 2021 guidance.

Alex BradleyChief Financial Officer

Thanks, Mark. Before discussing our Q2 results and 2021 financial guidance, I’d like to reiterate our core operating principle of endeavoring to create shareholder value through a disciplined decision-making framework, balancing growth, liquidity and profitability. As it relates to growth, we anticipate doubling our nameplate manufacturing capacity from approximately eight gigawatts today to 16 gigawatts in 2024 through adding additional factories in Ohio and India, as well as optimizing our existing fleet. Beyond that, we continue to evaluate the potential for further expansion in the United States as the policy environment develops.

While liquidity position has been a strategic differentiator in an industry that has historically prioritized growth without regard to long-term capital structure. Importantly, we anticipate we’ll be able to continue to self-fund the capacity expansion and strategic investments in our technology, while maintaining a strong differentiated balance sheet, which we believe is a meaningful competitive differentiator. While the strength of our balance sheet provides this flexibility, as we expand internationally, we may elect to utilize debt to mitigate currency risk and optimize returns on our international expansion. As it relates to profitability, our technology and capacity roadmaps are expected to enhance our long-term earnings potential.

Despite a long-term PV industry trend of declining ASPs, we anticipate revenue growth through capacity expansion. From a pricing perspective, although there remains significant uncontracted volume yet to book, we’re pleased with the pricing levels we’ve secured to date for 2023 deliveries, which in aggregate are only 1% lower than that of volume planned delivery in 2022. From a margin perspective, continued progress toward our midterm cost toward objective is expected to enhance our profit for potential. And furthermore, we’ve yet to book 2023 volumes for our next generation PV modules which are expected to be produced by our recently announced factories.

These modules are expected to be both ASP advantage due to their higher efficiency and optimized form factor, which creates value for customers, as well as cost per watt advantages. Combined with the benefits of locating supply near to demand and reducing the cost of sales rate, these factories are expected to increase gross margin per watt by approximately $0.01 to $0.03 per watt relative to our existing fleet. Overall, we believe a combination of capacity growth, technology enhancements and reducing our cost per watt, coupled with an operating cost structure that is 80% to 90% fixed, will drive meaningful contribution margin as we scale. Before reviewing our overall financial results for the quarter, I’ll first discuss the legacy system license that benefited revenue and margin during the period.

2014, we sold a project that was eligible for a 30% cash grant payment under Section 1603 of the American Recovery and Reinvestment Act. Issuance and indemnification arrangement, in September of 2017, we indemnified the project poster following the underpayment of anticipated cash grant proceeds by the US government. In 2018, the project entity commenced legal action seeking full payment of the previously expected cash grants. In Q2 of this year, a settlement was reached pursuant to which the US government made a payment in Q3 to the project entity, a portion of which we’re entitled to.

Accordingly, we recognized systems segment revenue of approximately 65 million during the quarter, which directly benefited gross margin. Starting on slide eight, I’ll cover the income statement highlights for the second quarter. Net sales in Q2 were 629 million, a decrease of 174 million compared to the prior quarter. Decrease in net sales was primarily due to the sale of the Sun Streams two, four and five projects in the prior quarter, partially offset by the aforementioned settlement agreement.

On a segment basis, our module segment revenue in Q2 was 543 million compared to 535 million in the prior quarter. Total gross margin was 28% in Q2 compared to 23% in Q1. System segment gross margin of 65 million was largely driven by the previously mentioned settlement agreement. Despite the aforementioned delays in certain module deliveries, as well as higher-than-expected logistics costs, our Q2 module segment gross margin increased to 20% from 19% in the prior quarter.

Whilst we continue to navigate and partially mitigate the effects of the dislocated shipping market, higher freight cost impacted our financial results for the quarter. In Q2, sales rate totaled approximately 50 million or 9 percentage points of module gross margin. Along with module warranty expense of approximately 2 million, sales freight and warranty reduced our module saving gross margin by approximately 10 percentage points. And as mentioned, we’re in the process of implementing Series 6 Plus and CuRe in 2021, which requires downtime resulting in lower production and underutilization.

In Q2, our module segment gross margin was impacted by 7 million of underutilization. In total, sales rate, module warranty and underutilization impacted our Q2 module gross margin by approximately 11 percentage points. SG&A and R&D expenses totaled 60 million in the second quarter, a decrease of approximately 12 million compared to the prior quarter. In Q2, we had a 3 million reduction in expected credit losses, which benefited SG&A expense.

Production start-up, which is included in operating expenses, totaled 2 million in Q2, a decrease of 10 million compared to the prior quarter. This decrease was driven by the start of commercial production at our second Series 6 factory in Malaysia in Q1. Q2 operating income was 110 million, which included depreciation and amortization of 66 million, 65 million related to the aforementioned settlement agreement, 9 million related to underutilization and production start-up expense and share-based compensation of $5 million. We recorded tax expense of 20 million in the second quarter compared to 46 million in Q1.

The decrease in tax expense for Q2 is largely attributable to lower pre-tax income. The combination of the aforementioned items led to second quarter earnings per share of $0.77 and $2.73 for the first two quarters of 2021 on a diluted basis. Next turning to slide nine, I’ll discuss fixed balance sheet items and summary cash flow information. Our cash, cash equivalents, marketable securities and restricted cash balance ended the quarter at 2.1 billion, an increase of 255 million compared to the prior quarter with several factors impacting our quarter-end cash balance.

Firstly, in Q1, we sold certain restricted marketable securities associated with our module collection and recycling program for total proceeds of 259 million. We intend to reinvest these proceeds, at which point they will be considered restricted marketable securities, which are not included in our measure of total cash. Secondly, in early April, we received proceeds from the sale of our US project development business. And finally, our operating cash flows during the quarter were partially offset by capital expenditures.

Total debt at the end of the second quarter was 279 million, an increase of 22 million from the end of Q1. This increase is due to a loan drawdown on the credit facility for a Japanese systems project. As a reminder, all of our outstanding debt continues to be project-related and will come off the balance sheet when the corresponding project is sold. Our net cash position, which includes cash, cash equivalents, restricted cash and marketable securities less debt, increased by 233 million to 1.8 billion as a result of the aforementioned factors.

Net working capital in Q2, which includes noncurrent project assets and excludes cash and marketable securities, decreased by 176 million compared to the prior quarter. And this decrease was primarily driven by the collection of proceeds from the sale of our US project development business and an increase in current liabilities due to an increase in down payments from module customers. Net cash generated by operating activities was 177 million in the second quarter. Finally, capital expenditures were 91 million in the second quarter compared to 90 million in the prior quarter.

Continuing on slide 10, I’ll next discuss 2021 guidance. Firstly, starting with our systems business. We recognized a 65 million benefit in Q2 related to the previously mentioned settlement agreement and have incorporated this in our systems revenue and gross margin guidance. Secondly, we’re evaluating whether to continue holding our Luz del Norte asset in Chile or pursue a sale of this project.

Pursuit of such a sale will require coordination of the project lenders and could result in an impairment charge in the future if we are unable to recover our net carrying value in the project. No impact from any possible sale of this project is included in our guidance for the year. As it relates to our module business, there are several key updates. As highlighted on the previous two earnings calls, we continue to anticipate elevated shipping costs for the remainder of 2021.

Despite near and long-term strategies to mitigate the impact, the cost of shipping has continued to rise since the April earnings call. As a result of elevated rates, port congestion, limited container availability and schedule reliability issues, sales rate is expected to adversely impact our 2021 results by an incremental 60 million relative to our previous expectations. For the full-year 2021, we anticipate sales rate and warranty will reduce our module segment gross margin by 10 to 11 percentage points, 250-basis-point increase from the previous earnings call. Whilst we continue to manage our core manufacturing costs, we also anticipate a shipping-related variable cost headwind of approximately 20 million, primarily due to elevated inbound freight costs for raw materials.

Additionally, Q2 shipments were lower than expected due to vessel delays, constrained customer container availability and accommodating certain customer requests. We’re currently tracking to achieve full-year 2021 shipments of 7.6 to 8 gigawatts which represents a 0.2-gigawatt decrease to the low end of the guidance range. We also acknowledge that the current logistics environment presents risk to our 2021 shipment plan. As it relates to capacity expansion, our recently announced factories in Ohio and India are anticipated to commence production in 2023 and increase 2021 capital expenditures by approximately 400 million.

Related to this expansion, we anticipate incurring an additional 700 million of capital expenditures in 2022 with the remainder in 2023. With these factors in mind, we’re updating our 2021 guidance as follows. Our module segment revenue guidance of 2.4 to 2.55 billion represents a 50 million decrease to the low-end of guidance range to account for our current expectations on shipment timing. Our updated net sales guidance of 2.875 to 3.1 billion, which reflects an increase in systems revenue on both the high and low end of the guidance range due to the aforementioned settlement agreement.

Additionally, we’ve increased the low end of our guidance — systems guidance range to account for clarity on project sale accountants. Our module segment gross margin guidance is 485 to 535 million. Whilst our previous guidance, this represents an 80 million reduction to the high end of the guidance range due to a 60 million increase in expected sales rate and 20 million increase in expected inbound rate. Revised low-end also represents an 80 million decrease relative to our previous guidance due to a 0.2-gigawatt reduction in the low end of our shipments guidance and an increase in expected sales and inbound freight costs which are partially offset by risk accounted for in our previous guidance range.

As a result of these factors, we anticipate our module seven gross margin will be approximately 20% to 21% for the full year. For the full-year 2021, we anticipate sales rate and warranty will reduce our module segment gross margin by 10 to 11 percentage points. And in addition, we expect the impact of ramp underutilization and reduced throughput to total 41 million. Our updated systems segment gross margin guidance is 210 to 225 million, which reflects a 65 million increase due to the aforementioned settlement agreement and a 15 million increase to the low end of the guidance range due to the clarity on project sale economics.

We anticipate that the majority of our remaining year — remaining full-year systems segment revenue and gross margin, we recognized in the fourth quarter of the year. Our revised total gross margin guidance is 695 to 760 million, which reflects a 15 million decrease to the high-end of the range. SG&A and R&D expenses of 265 to 275 million, production start-up expense of 20 to 25 million, and operating expenses of 285 to 300 million combined are unchanged. We revised operating income guidance range of 545 to 625 million and includes anticipated depreciation and amortization of 262 million, share-based compensation of 20 million; 61 to 66 million related to ramp underutilization, reduced throughput and production start-up expense.

And a gain on the sale of our US project development and North American O&M businesses of 149 million. Turning to nonoperating items. We expect interest income, interest expense and other income to net negative 15 million, an increase of 5 million compared to our previous guidance due to higher net interest expense, foreign exchange losses. Our tax guidance of 100 to 120 million is unchanged.

Our revised earnings per share guidance is $4 to $4.60 per share. As a reminder, there are a number of items impacting our EPS guidance for 2021. Firstly, ramp on utilization, reduced throughput and production start-up expense driven by factory upgrades are expected to contribute to a $0.50 EPS headwind in 2021. Secondly, these upgrades will require approximately three weeks of planned downtime across the fleet, which is expected to contribute to lower production.

And finally, sales rate and inbound freight both remained significantly elevated in comparison to historic levels. Our capital expenditure guidance has increased by 400 million, driven by our recently announced expansion plan to a revised range of 825 to 875 million. As a result of additional capex in 2021 and high logistics costs, we decreased our year-end 2021 net cash guidance to a revised range of 1.35 to 1.45 billion. And lastly, our shipment guidance is 7.6 to 8 gigawatts which represents a 0.2-gigawatt reduction to the low end of the guidance range.

Turning to slide 11, I’ll summarize the key messages from the call today. From a financial perspective, net cash position of 1.8 billion remained strong, delivered year-to-date EPS of $2.73, and we revised our 2021 EPS guidance range to account for the current freight market. Operationally, we started flight preparation for our recently announced factory in Ohio and announced our manufacturing expansion into India. As a result of this expansion and optimization of our existing fleet, we anticipate our nameplate manufacturing capacity will reach 16 gigawatts in 2024.

And finally, Series 6 demand is at a record-high level with nine gigawatts of year-to-date net bookings, which includes 4.1 gigawatts since the previous earnings call. And with that, we will conclude our prepared remarks and open the call for questions. Operator?

Questions & Answers:

Operator

[Operator instructions] Our first question comes from the line of Philip Shen from ROTH Capital Partners. Your line is open.

Philip ShenROTH Capital Partners — Analyst

Hi, everyone. Thanks for taking my question. The first one is on Vietnam and Malaysia. With the COVID situation there, I think, Mark, you mentioned that people are working hard and maybe even living at the facility to maintain utilization.

Can you talk about how you expect utilization to trend ahead? Is there a risk for a shutdown of production at any point in time in the future? And how is this impacting your ability to roll out new updates and so forth? And then secondarily, in terms of bookings, you guys have had some nice bookings here. There’s still a bunch available for 2023. I think you mentioned maybe three gigawatts. When do you expect that to possibly get booked? I mean, could we see that booked later this year? Or do you think that might carry into 2022?

Mark WidmarChief Executive Officer

Yeah, Phil. So I guess, on — so, obviously, we’ve got to comply with all the requirements of what’s going on in both those countries. And in some cases, there’s — and there has been over periods of time in Malaysia around movement control orders and, fortunately, we’ve been — and Malaysia has been deemed to be essential. So that continues to allow us to operate, and we continue to try to make sure we comply with all the local requirements.

We’ve also, in both of our facilities, started the process already to get our associates vaccinated. So most of our associates in both of the facilities have received the first shot and we expect here in the near term, we’d be able to provide the second shot. So that’s helping as well. Vietnam is the one that I would say that’s trending more significantly, right? On a relative basis, you could look at the Vietnam’s historical number of cases and fatalities are being relatively low by most standards.

But we’ve seen a pretty significant increase here over the last six weeks or so. So the government has made — imposed other requirements, including to the extent that you are going to continue to run your factory, there’s a requirement to quarantine on site. So we have made for accommodations for our associates there to quarantine. And we’ve got a schedule which would be in place where we’d be able to rotate associates through over periods of times where the current staff would be quarantine for a period of time, then the new number of assets would come in over time.

So we have been able to manage, and the team has done a phenomenal job. And I alluded to that in my prepared remarks, they continue to hit their operational metrics. So as I sit here today, as we look across our supply chain that’s both in Malaysia and Vietnam and our own facilities, we’re able to manage the current situation. However, if things continue to trend worse, then we’ll have to assess and evaluate our ability to continue to run and operate.

So it’s clearly a challenging environment at which the team have been able to do an outstanding job to continue to operate and to hit our performance metrics. As it relates to technology rollout, it’s a little bit different situation because — and we highlighted it in terms of Vietnam as it relates to our rollout of CuRe. Our sequencing around CuRe would have been Ohio first then Malaysia and then Vietnam. We’ve already done some of the upgrades that would enable CuRe product to be released in Malaysia when we started KMT2.

We have some of the upgrades already positioned to enable CuRe when we start the rollout. And we’ve just recently completed the rollouts in both Perrysburg 1 and Perrysburg 2 to enable CuRe. We have yet, though, to roll out the upgrades that are needed in Vietnam. And there are restrictions and quarantine requirements and reduced travel and the like.

So as we alluded to, we’re working through and to try to find a path to keep it on schedule, but there is a significant risk that the rollout of CuRe in Vietnam, given the current situation would be delayed. But that’s the most significant one that we’re still working through at this point in time. As it relates to bookings, yeah, we’ve got about 3.4 gigawatts of 13 books. We now, with the two new factories, will be adding close to three gigawatts of incremental volume in 2013 — excuse me, get the right year 2023, sorry about that.

And there’s a lot of volume still to be booked. So we probably got in the range of 10 gigawatts or something like that. The engagement with our customers, we’ve got a number of very large deals right now here in the US, as well as in the pipeline for India. As we highlighted, we’ve got about seven gigawatts right now of a pipeline in India that we’re working to execute now that we’ve made the announcement around the factory.

Subject to final permitting and the incentive programs from the government finalizing that, we’ll start contracting that volume as well. So there’s no lack of opportunity. The engagement is good. I would not expect at least over the next few quarters, I don’t see a significant slowdown in bookings momentum.

I think we’re going to have a very strong second half of this year to help start booking out 2023 and 2024.

Operator

Our next question comes from the line of Eric Lee from BofA.

Eric LeeBank of America — Analyst

Hi. Thanks for taking the question, and congrats on the bookings. For the bookings specifically, could you comment on the average ASPs as you look into ’23? Is that still $0.20 — high $0.20 per watt range? And can you talk about where you’re booking into that ’23-plus time frame?

Mark WidmarChief Executive Officer

Yeah. So what we said on the call was that if you look at our current bookings that we have for 2023, they’re essentially flat. I think we said they’re down about 1%. And so, they’re essentially flat as we go from ’22 into ’23.

And pricing, if you actually look at the profile of what we have booked and what we’re currently in negotiations with right now is pricing has trended up for both ’22 — if you look at deliveries in ’22 and then even what we’re seeing in ’23. So there’s a lot of momentum. I think what’s happening is we continue to book out. Again, we are still somewhat capacity constrained even with the two new factories.

That volume doesn’t start to come out in ’23. But even if you look at that volume relative to the global market, we are capacity constrained from that standpoint. And as our book builds up and firms up and it starts to constrain our available capacity to support new customers, it starts to firm up pricing in the marketplace. So we’re happy to see that.

As we said that in our prepared remarks, we do look at this as a very balanced perspective to get an ASP that is attracted to both parties, right? The project economics have to work, and our return requirements have to be met as well. So you have to balance those two in consideration. And the other thing I’ll just say around the bookings is that we are — and we’ve alluded to this in the last earnings call. And if you look at effectively everything that we booked this quarter, we have started to implement the modifier around shipping costs.

So we have benefited in terms of the contract structured in a way that if there’s incremental sales freight costs that there would be a mechanism which that would be variable pricing to the customer to accommodate for that. So that’s also an item that we’re trying to make sure it gets properly reflected in our bookings going forward.

Operator

Our next question comes from the line of Ben Kallo from Baird. You may ask your question now.

Ben KalloRobert W. Baird & Co. — Analyst

Thanks for taking the question. Thanks guys. Could you talk about, a little bit about, what went into your guidance assumptions to bring down the low-end just a little bit like that seems very small? So I just want to understand what went into there as far as assumptions around shipping costs, especially. And then, the timing of any other plant shutdowns or costs like that? And then my second question is just on the ASPs.

What I heard you just say was that ASPs are up where you last talked to us about in your negotiations. Can you talk about if that has anything to do what that has to do with if it’s poly silicon supply chain? And then you also mentioned a kicker on ASPs with the new technology. Could you maybe add more into that?

Alex BradleyChief Financial Officer

Yeah, Ben. So starting with the guidance. On a combined basis, you’re not seeing the low end of the guidance range change. But what you are seeing is the impact of the settlement agreement that we had on the previous project come through.

So the 65 million that was in the revenue line and flow straight through the gross margin, so that’s a benefit to gross margin. If you look at the module side of gross margin, we’re basically down about, call it, 15 million or so on volume as we lowered the lower end of the range on shipment volume and then about 65 million on freight. So it impacted in the quarter about 80 million on freight, 60 million outbound sales rate, 20 inbound. We had about 15 million or so in the range as a risk.

So we’re having a net impact down of about 65. But again, don’t forget that you had the impact coming off of this settlement agreement of 65 million. That’s why the consolidated based on the range, you’re not seeing it come down significantly.

Mark WidmarChief Executive Officer

And on the ASPs, yes, we are starting to see the ASPs for — and I’ll separate — we’ll talk next-gen product before our secondly, but first is in terms of our Series 6 and Series 6 Plus in CuRe product that we are currently negotiating with customers at this point in time. Yes, we’re seeing ASPs starting to firm up. And there’s — what First Solar is able to do, not only with the differentiation we have around capabilities and our technology, but there’s an element of certainty. And given there’s so much uncertainty right now that’s going on with the crystalline silicon supply chain.

Whether it’s here in the US or even you’re starting to see some emerging issues start to come up in the EU and UK, and in places like that, it’s creating anxiety to a customer and the customer wants to make sure they can have certainty and there’s no disruption to their commitment around their module supply chain. First Solar is decoupled from the Chinese crystalline silicon supply chain, right? So it enables a different opportunity and engagement with customers and including that that is playing into some of the opportunities. Again, though, you still have to deliver great technology and the evolution of CuRe in particular, and it’s improving around its long term. It’s degradation rate, I think, is further enhancing our relative competitive position in the marketplace.

So it’s the product, it’s kind of the overall market, it’s the certainty of contracting with First Solar is a key driver in the bookings momentum and the firmness of the ASPs. The — what we alluded to on our new product, which will come out of both of our Perrysburg 3 factory and in our India factory, both of them will be higher efficiency than our current fleet. They also will be optimized. One will be optimized here in the US for a tracker install in the India 1, which is largely — India is largely a fixed tilt market.

It will be optimized to a fixed tilt structure. Both of them will inherently create incremental value relative to the Series 6 and 6 Plus product that we have today. And I think what Alex alluded to and also couple that with both of them will be the lowest cost products in our fleet. I think there’s an entitlement of $0.01 to $0.03, at least what our initial indications are about $0.01 to $0.03 of incremental gross margin realization with the next-gen product relative to where we sit today on a comparable basis with Series 6 Plus CuRe.

Operator

Our next question comes from the line of Brian Lee from Goldman Sachs. You may ask your question

Brian LeeGoldman Sachs — Analyst

Hey, guys. Thanks for taking the questions. I had two more modeling specific ones. I guess, first off, on the cash flow trajectory here for the next few years.

Can you give us a sense of what net cash balance you’re comfortable with? And sort of when you get back to positive free cash flow? Is that in 2024? Because there’s about a $1.4 billion of capex between Ohio and India here, so just wondering kind of what the right free cash flow trajectory to be assuming is? And second question, just — I know, Alex, you mentioned a lot of the opex is fixed, we’ve seen that over the years. But we typically have also seen start-up and production ramp costs on new fabs. So how should we be thinking about those costs in ’22 and ’23 for Ohio and India, respectively?

Alex BradleyChief Financial Officer

Yeah. So on the cash side, so we were guiding previously to 1.8 to 1.9 billion year-end number. That’s now down to 1 35 to 1 45. So 1.4 midpoint.

And the delta there is the 400-or-so million of capex that’s going to happen this year associated with that spend. So that still leaves another about 900 to 1 billion-or-so that’s going to happen in the next couple of years. We haven’t given a minimum number that we’re comfortable with. I think the business is going to be significantly cash generative over the next couple of years with the six factories that are already in place.

I can’t give you a guided number. But I’d say that we’re going to generate enough cash organically that would be comfortable. We could finance the construction of the two new factories on balance sheet should we wish and not drop to levels that I wouldn’t be comfortable with maintaining in terms of the base net cash balance. That said, for a few reasons, we may look to leverage the factory in India, especially.

I think there’s some optimization of capital structure here we might do. There’s less equity going into a country where it can be more challenging to bring money in and out. I think there’s some benefit to matching some of the revenue and expense stream with the capital structure. I think there’s also some beneficial rates we could get using ECA financing, especially for some of the equipment that’s going to come out of Europe and essentially the US as well.

So I’m comfortable we could, with organic cash flow over the next couple of years, finance the factories on balance sheet without debt and leave ourselves at levels that be comfortable with, but I think there may be optimization around the balance sheet that we’ll look to do as well. And then, on the opex side, we’re still working through numbers, but these factories are going to be significantly larger than the previous factories. You think about historically to put in place a factory that was 1.2 billion, now up to about 1.5, 1.6 of nameplate. Somewhere in the region of 30 to 40 million, depending on the location, depending whether it’s the first or second factory came down a little bit more.

For instance, our second Malaysia — our second Vietnam factory was significantly cheaper than our first. So it can be a little higher in the US than it is internationally given labor costs. But in indicative terms, you could take that and double it for scale. And so, you could look at start-up in the range of probably 60 to 70 million per factory.

In terms of timing, you’re going to see a significant portion of the US factory start-up hit in 2022, call it three quarters, something like that, the remainder in 2023. The India factory is going to be a little behind that. You may see more like 25% to 50% hit in 2022 and the other 50% to 75% hit in 2023. And the other thing I’d say about opex is we did mention that we have about an 80% and 90% fixed operating cost structure.

So as we do scale these factories, there will be potentially some slight incremental SG&A. But as a whole, as you add that 6.6 gigawatts of capacity and keep the opex down, you do get a pretty significant contribution margin and operating margin expansion that we can benefit from.

Operator

[Operator signoff]

Duration: 60 minutes

Call participants:

Mitch EnnisInvestor Relations

Mark WidmarChief Executive Officer

Alex BradleyChief Financial Officer

Philip ShenROTH Capital Partners — Analyst

Eric LeeBank of America — Analyst

Ben KalloRobert W. Baird & Co. — Analyst

Brian LeeGoldman Sachs — Analyst

More FSLR analysis

All earnings call transcripts

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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3 same day loans that aren’t payday loans https://after-hours.org/3-same-day-loans-that-arent-payday-loans/ Sat, 07 Aug 2021 15:32:12 +0000 https://after-hours.org/3-same-day-loans-that-arent-payday-loans/ When you run out of money for an unforeseen emergency or a bill that needs to be paid right away, a quick loan can set you back. Unfortunately, people in this situation often take out risky and expensive payday loans. These loans are popular because many of them do not require a credit check and […]]]>


When you run out of money for an unforeseen emergency or a bill that needs to be paid right away, a quick loan can set you back.

Unfortunately, people in this situation often take out risky and expensive payday loans. These loans are popular because many of them do not require a credit check and you can get the money on the same day. They also typically have extremely high interest rates – they can exceed 400% per year – and terms of only two weeks.

The combination of high interest rates and short terms makes it difficult to get out of payday loan debt. Borrowers find themselves stuck in a cycle of paying only interest and taking new loans every two weeks.

If you are wondering how long it takes to get a loan without such predatory terms, the good news is that there are quick options with much lower interest rates. You don’t get the money the same day, but the following lenders can fund loans as quickly as a business day after approval.

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1. Discover the personal loan

Find out the personal loan is a low cost option for borrowers with the credit to qualify. You need a FICO® score of 660 or higher to meet this lender’s minimum requirements.

Loan amounts start at $ 2,500 and go up to $ 35,000. This lender offers some of the longest personal loans – you can get a loan from 36 to 84 months.

The good thing about a Discover personal loan is its affordability. Its low interest rates are competitive with the best personal loans and it does not charge prepayment fees or origination fees.

2. Arrived

Upstart has some of the most flexible credit score requirements of any lender. The minimum FICO® score to qualify for a personal loan with Upstart is 580. It also offers loans to consumers who do not yet have a credit score. In this case, Upstart bases its decision on your education and employment.

There can be high interest rates with Upstart, especially for borrowers with low credit scores or no credit history. Loans can also have high origination costs.

This lender offers loans of $ 1,000 to $ 50,000, and you can choose a term of three or five years. There is no prepayment penalty, so if you don’t need a loan for a long time, you can prepay it at no additional cost.

3. Before

Avant specializes in loans for borrowers with low credit scores. The minimum FICO® score to get approved for a personal loan with Avant is 580.

Loan amounts vary from $ 2,000 to $ 35,000 and terms range from 24 to 60 months. Avant does not charge a penalty for prepayment.

The main downside to Avant is its fees. Interest rates are high and there may be administration costs.

How to speed up the loan process

To complete the loan process as quickly as possible, prepare the documentation and watch out for errors on your application.

Most lenders ask for the following documents when you apply for a loan:

  • Identification: You may be required to provide one or two pieces of identification, such as a valid driver’s license, passport, social security card, or other type of government-issued identification.
  • Proof of income: Bank statements, pay stubs or tax returns
  • Proof of address: A mortgage contract, rental contract, utility bills in your name or a voter card

As you complete the application, verify the information. Any errors, such as an incorrect number in your bank account, can cause delays.

Payday loans can be quick, but there are other lenders who provide funds almost as quickly. With any of these three lenders, you can get approved for a loan on the day you apply, and then receive the funds the next business day. It’s only a little longer to wait for a much better deal on a personal loan.



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3 same day loans that aren’t payday loans https://after-hours.org/3-same-day-loans-that-arent-payday-loans-2/ Sat, 07 Aug 2021 15:32:12 +0000 https://after-hours.org/3-same-day-loans-that-arent-payday-loans-2/ When you run out of money for an unforeseen emergency or a bill that needs to be paid right away, a quick loan can set you back. Unfortunately, people in this situation often take out risky and expensive payday loans. These loans are popular because many of them do not require a credit check and […]]]>


When you run out of money for an unforeseen emergency or a bill that needs to be paid right away, a quick loan can set you back.

Unfortunately, people in this situation often take out risky and expensive payday loans. These loans are popular because many of them do not require a credit check and you can get the money on the same day. They also typically have extremely high interest rates – they can exceed 400% per year – and terms of only two weeks.

The combination of high interest rates and short-term conditions makes it difficult get out of payday loan debt. Borrowers find themselves stuck in a cycle of paying only interest and taking new loans every two weeks.

If you are wondering how long does it take to get a loan without these predatory conditions, the good news is that there are quick options with much lower interest rates. You don’t get the money the same day, but the following lenders can fund loans as quickly as a business day after approval.

1. Discover the personal loan

Discover the personal loan is a low cost option for borrowers with the credit to qualify. You need a FICO® score of 660 or more to meet the minimum requirements of that lender.

Loan amounts start at $ 2,500 and go up to $ 35,000. This lender offers some of the longest personal loans – you can get a loan from 36 to 84 months.

The good thing about a Discover personal loan is its affordability. Its low interest rates are competitive with best personal loans, and it does not charge prepayment fees or origination fees.

2. Arrived

Reached has some of the most flexible credit score requirements of any lender. The minimum FICO® score to qualify for a personal loan with Upstart is 580. It also offers loans to consumers who do not yet have a credit score. In this case, Upstart bases its decision on your education and employment.

There can be high interest rates with Upstart, especially for borrowers with low credit scores or no credit history. Loans can also have high origination costs.

This lender offers loans of $ 1,000 to $ 50,000, and you can choose a term of three or five years. There is no prepayment penalty, so if you don’t need a loan for a long time, you can prepay it at no additional cost.

3. Before

Before specializes in loans for borrowers with low credit scores. The minimum FICO® score to get approved for a personal loan with Avant is 580.

Loan amounts vary from $ 2,000 to $ 35,000 and terms range from 24 to 60 months. Avant does not charge a penalty for prepayment.

The main downside to Avant is its fees. Interest rates are high and there may be administration costs.

How to speed up the loan process

To complete the loan process as quickly as possible, prepare the documentation and watch out for errors on your application.

Most lenders ask for the following documents when you apply for a loan:

  • Identification: You may be asked to provide one or two pieces of identification, such as a valid driver’s license, passport, social security card, or other type of government-issued identification.
  • Proof of income: bank statements, pay stubs or tax returns
  • Proof of address: A mortgage contract, a rental contract, utility bills in your name or a voter card

As you complete the application, verify the information. Any errors, such as an incorrect number in your bank account, can cause delays.

Payday loans can be quick, but there are other lenders who provide funds almost as quickly. With any of these three lenders, you can get approved for a loan on the day you apply, and then receive the funds the next business day. It’s only a little longer to wait for a much better deal on a personal loan.

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Read our full review for free and apply in just two minutes. We strongly believe in the Golden Rule, which is why the editorial opinions are our own and have not been previously reviewed, endorsed or endorsed by the advertisers included. The Ascent does not cover all the offers on the market. Editorial content for The Ascent is separate from editorial content for The Motley Fool and is created by a different team of analysts. Ally is an advertising partner of The Ascent, a Motley Fool company. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Lyle daly has no position in any of the stocks mentioned. The Motley Fool owns stock and recommends Upstart Holdings, Inc. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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Consumer Reports Alternatives to Payday Loans Surveys https://after-hours.org/consumer-reports-alternatives-to-payday-loans-surveys/ Fri, 06 Aug 2021 22:00:00 +0000 https://after-hours.org/consumer-reports-alternatives-to-payday-loans-surveys/ If you are having trouble paying your bills, you might want to consider a payday loan. But be careful! Even with some recent reforms, many of these loans still come with high fees and very high interest rates. The good news is that there are alternatives, and as Consumer Reports explains, you just need to […]]]>


If you are having trouble paying your bills, you might want to consider a payday loan. But be careful! Even with some recent reforms, many of these loans still come with high fees and very high interest rates. The good news is that there are alternatives, and as Consumer Reports explains, you just need to know where to look.

The pandemic has really exacerbated the problems with payday lenders, especially for low-income people and black communities. So there has been a push to provide them with better and fairer banking services.

What can you do now if you need emergency cash quickly? First, find a community development financial institution near you. They are financial service providers, like a bank or a credit union, whose mission is to bring financial services to low-income communities, places that many traditional banks have largely excluded.

And joining a CDFI can be affordable. They offer free or low cost banking services with an initial deposit as small as $ 25.

Another avenue that you can take is to find a nonprofit organization with a payment relief program. For example, Exodus Lending is a non-profit organization dedicated to helping people get out of payday loan debt. These groups consolidate your loans without fees and interest.

If you end up going to a payday lender, CR says it’s important that you know the laws in your state. USA.gov has a directory of state consumer protection offices, where you can get help if you have a problem with a lender.

Here is a list of CDFIs in Georgia.

Copyright 2021 WGCL-TV (Meredith Corporation). All rights reserved.



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Alternatives to Payday Loans https://after-hours.org/alternatives-to-payday-loans/ Wed, 04 Aug 2021 15:21:00 +0000 https://after-hours.org/alternatives-to-payday-loans/ BATON ROUGE, Louisiana (WAFB) – Payday loans are short term, high cost cash loans, typically $ 500 or less. It’s usually due on your next payday, but when you pay it off, you’ll likely have to pay fees ranging from $ 10 to $ 30 for every $ 100 you borrow. A typical two week […]]]>


BATON ROUGE, Louisiana (WAFB) – Payday loans are short term, high cost cash loans, typically $ 500 or less.

It’s usually due on your next payday, but when you pay it off, you’ll likely have to pay fees ranging from $ 10 to $ 30 for every $ 100 you borrow.

A typical two week payday loan with a fee of $ 15 per $ 100 equates to an annual percentage rate, or APR, of almost 400%.

But the convenience of getting cash quickly is needed, especially for struggling families.

“The pandemic has really exacerbated the problems with payday lenders, especially in low-income and black communities,” said Brian Vines, investigative reporter at Consumer Reports. “So what we’ve seen is this push to bring better and fairer banking services to these communities. “

He shared some alternatives to using payday loans like finding a Community Development Financial Institution (CDFI) near you.

“CDFIs are financial service providers, like a bank or a credit union, whose mission is to bring financial services to low-income communities, places that many traditional banks have largely excluded,” he said. -he explains.

Joining a CDFI can be an affordable option. They can offer free or low cost banking services with an initial deposit as small as $ 25.

Another avenue to try is to find a nonprofit organization that offers a payment relief program.

Vines said there are charities across the country that offer everything from food aid to paying for utilities.

Modest needs awards free “self-sufficiency grants” by matching applicants with donors.

Groups like Catholic charities and Lutheran Services in America provide a variety of resources regardless of religious affiliation.

It’s worth taking the time to do your research to see which grants or programs may meet your needs.

Click here to report a typo.

Copyright 2021 WAFB. All rights reserved.



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Create new revenue streams with connected devices and IoT https://after-hours.org/create-new-revenue-streams-with-connected-devices-and-iot/ Tue, 03 Aug 2021 13:42:27 +0000 https://after-hours.org/create-new-revenue-streams-with-connected-devices-and-iot/ Cellular IoT connections, which reached 1.7 billion in 2020, are expected to reach 5.9 billion in 2026. This amazing growth is due to various means of wirelessly connecting devices to collect valuable data. Massive IoT technologies are developing rapidly and are expected to account for 46% of all cellular IoT connections by 2026. They are […]]]>


Cellular IoT connections, which reached 1.7 billion in 2020, are expected to reach 5.9 billion in 2026. This amazing growth is due to various means of wirelessly connecting devices to collect valuable data. Massive IoT technologies are developing rapidly and are expected to account for 46% of all cellular IoT connections by 2026. They are primarily used to connect low-cost, low-cost devices that consume little power and return small amounts of data, like connected distributors. machines and apparatus.

With this in mind, Ericsson worked with WMF Group, a leading manufacturer of commercial coffee machines, and Swisscom, a leading communications services provider, to create a business case for connected coffee makers. This article will discuss how cellular connectivity enables companies like WMF Group to create digital sales solutions that reduce downtime, monitor their own conditions, such as supply levels and maintenance needs, and ultimately generate new sources of income, as indicated in our report “[insert finalized report name]. “

Something is brewing

WMF Group produces commercial coffee machines that are used daily by several hundred million people. The company is at the forefront of the development, manufacture and distribution of connected coffee machines of all types, such as those found in restaurants, hotels and high-end vending machines. Connected devices and services allow vendors like WMF to monitor the health status and supply levels of their machines, remotely control them, and receive customized analytical reports for customers. All of this is made possible by transferring data to and from machines over a 5G cellular network, enabling three main categories of use cases.

  • Digital Solutions: The manufacturer provides an easy-to-access portal where an operator can monitor sales figures, supply levels, and machine health. It enables revenue management, consumption analysis, reduction of supply shortages, and advanced screen usage for multimedia packages such as advertisements.
  • Health Monitoring and Predictive Maintenance: This use case uses cellular connectivity to send machine health updates and maintenance alerts. The goal is to reduce costs by minimizing downtime through proactive just-in-time maintenance and to reduce over-maintenance.
  • Remote self-service and digital payment: Cellular connectivity not only enables contactless ordering through web applications, but also a variety of remote and digital payment options to streamline processes.

There are opportunities in the IoT, mainly because the insight provided by the data helps vendors improve customer satisfaction through personalization, ensure supply levels, and reduce downtime, resulting in downtime. increased income.

Add smart data photo

Knowing how to access, interpret and act on smart data can unlock huge potential for coffee machine owners to generate their income in a wide variety of businesses. Connected machines can unlock data, turn it into powerful information, and correct faults automatically, enabling owners to improve efficiency and drive operations forward.

For example, nearly one in five cafe owners have never increased their prices, indicating that they do not know the optimal price that they can charge to increase their profits. Maybe if they increased their prices, the demand would stay the same. On the other hand, by charging a lower price, the volume could increase. Because their prices remain static, they have no way of knowing. Accessing clear and tangible data via connected machines would allow them to price their coffee accurately and maximize their profit.

Another problem is the shortage of supplies and inadequate maintenance, resulting in downtime and lost sales. On average, coffee machines are not operational about 2% of the time, which might sound like a small number, but can add to the difference between profit and loss. At gas stations, for example, 20% of all lost coffee sales are due to machines out of service. Worse, supply shortages explain 39% downtime. Connected machines can help drive operations forward by using intelligent data to correct faults before they even occur, dramatically reducing downtime.

A final challenge is to figure out which beans and which recipes will appeal to you the most. According to Arthur D. Little, about 8% of the US market is created from specialty coffees that sell for higher prices. But knowing which varieties to buy can be difficult, unless you have access to the direct consumer information that the IoT can provide.

What are the advantages ?

In the hotel industry (restaurants and hotels), coffee is sold to customers or as part of a hospitality package. With a baseline of € 300,000 in annual coffee sales, a gas station operator can leverage connected coffee machines to increase revenue by 3.4% for an additional € 10,200 per year. This comes from better revenue management, reduced supply shortages, and advanced screens that allow gas stations to sell other products.

In the workplace, machines are sold to companies that offer free coffee as a benefit to employees. While revenue generation is not a goal, smart coffee makers offer significant benefits through advanced use of the display that allows businesses to communicate without further signage. Advertising can be sold to neighboring businesses to recover costs. This could create an annual net worth of $ 2,900 for an office with 200 employees.

In facility management, coffee machines and other services are often part of a bundled package for corporate clients. The annual net worth is around 300,000 EUR for a company with a turnover of 3.5 million EUR from the rental of coffee machines. Advanced use of the screen includes the ability to display content or advertisements. And, if the facility provides replenishment services, they will benefit from less downtime and increased consumption.

For resellers, coffee machines are sold through sales channels to customer businesses such as gas stations and convenience stores. This can present new business models. For example, dealers may offer machines along with additional services such as the provision of grain. This is analogous to smartphone models, where devices are sold at a subsidized price in exchange for a long-term contract. Another possibility is revenue sharing, where the reseller and the customer share the product, verified through the data of the connected coffee maker.

Take a cup and open

“[insert report name]”Illustrates the additional gains WMF achieves through its technological approach, including greater competitive advantage. It also discusses the perspectives of original equipment manufacturers and cloud solution providers. It even looks at connected coffee vending machines. However, their learnings are applicable to the entire industry, to any organization that wants to pull data from their machines that they can turn into a greater opportunity.

So grab a cup and open up to connected devices and IoT. Download the report now and find out why coffee makers, like so many other device makers, can see their cups overflowing with connected devices and IoTs, powered by 5G cellular connectivity.

Read more

Click here and download your free copy of [insert final report name and hyperlink]



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Payday Loans Dropped During Pandemic, But Californians ‘Not Out Of The Woods’ https://after-hours.org/payday-loans-dropped-during-pandemic-but-californians-not-out-of-the-woods/ Sun, 01 Aug 2021 18:52:00 +0000 https://after-hours.org/payday-loans-dropped-during-pandemic-but-californians-not-out-of-the-woods/ Updated August 3, 2021 Erika Paz | CalMatters Lea este artículo fr Spanish. Government pandemic aid may have helped some Californians avoid resorting to expensive payday loans last year, but some experts say it may be too early to celebrate. A new report has found that in 2020, California saw a 40% drop in underwritten […]]]>


Updated August 3, 2021

Erika Paz | CalMatters

Lea este artículo fr Spanish.

Government pandemic aid may have helped some Californians avoid resorting to expensive payday loans last year, but some experts say it may be too early to celebrate.

A new report has found that in 2020, California saw a 40% drop in underwritten payday loans from 2019, a drop equivalent to $ 1.1 billion. Almost half a million fewer people have not used payday loans, down 30% from 2019.

Despite the unprecedented job loss triggered by the pandemic last year, the government-funded financial aid has been enough to have a huge impact on the payday lending industry, according to the California Department of Financial Protection and of innovation. The new State Department released the report last week as part of its continued efforts to regulate and supervise consumer financial products.

the report comes on the heels of California’s new $ 262.6 billion budget, with multiple programs aimed at reducing economic inequalities within the state. An unprecedented $ 11.9 billion will be spent for Golden State Stimulus Payments, a unique advantage that is unlikely to continue in the years to come.

“With the disappearance of these benefits, we expect that there will potentially be an increase (in payday loans),” said department spokeswoman Maria Luisa Cesar.

Only temporary relief

Industry Representatives, State Regulators, and Consumer Advocates Agree: Government Aid Has Helped Californians Avoid Dependence On Payday Loans, High-Interest Short-Term Loans That Need To Be Paid in full when borrowers receive their next paycheck. Additional reports have revealed that the California trend reflects trends in other states.

Thomas Léonard, executive director of the California Association of Financial Services Providers, said 2020 was a difficult year for the industry as the pandemic changed the way consumers managed their finances. His association represents providers of small dollar consumer loans, payday loans, check cashing and other financial services to consumers.

“The demand for small loans fell in 2020 as many consumers stayed at home, paid off debts, managed fewer expenses and received direct payments from the government,” Leonard said in a statement.

On the flip side, Cesar said the decline in the use of payday loans is not necessarily a sign of a better financial situation for Californians.

“It’s just too simplistic of a picture,” she said. “The cash aid efforts may have helped consumers make ends meet, but people have not come out of the woods.”

Marisabel Torres, California Policy Director for the Center for Responsible Lending, said that despite the impact of pandemic relief on Californians, some of these programs already have an end date. California moratorium on evictions, for example, is scheduled to end on September 30. The deployment of rental aid has been slow. Tenants with unpaid rent face potential eviction for those who cannot afford rent.

Once those programs are gone, Torres said, people will continue to need financial help.

“There’s still this large population that will continue to turn to these products,” Torres said.

With the exception of last year, the report showed that payday loan usage has remained stable over the past 10 years. But the use of payday loans doubled in the years following the Great Recession.

The state report does not provide any context on how consumers used payday loan money in 2020, but a to study by the Pew Charitable Trust in 2012 found that 69% of clients use the funds for recurring expenses, including rent, groceries and bills.

Almost half of all payday loan clients in 2020 had an average annual income of less than $ 30,000 per year, and 30% of clients were making $ 20,000 or less per year. Annual reports also consistently show higher usage among clients earning more than $ 90,000 per year, although the financial monitoring department has not been able to explain why.

“Basic necessities, like groceries, rent… To live you have to pay for these things,” Torres said. “Anything that eases this economic pressure is good for people. ”

Lawmakers across California began to establish pilot programs that would ease some of this economic pressure. Stockton was the first town to experience a guaranteed income for its residents. Compton, Long Beach and Oakland have followed suit across the national Mayors of Guaranteed Income effort. California has approved its first guaranteed income program earlier this month.

Little regulation, high fees

Payday loans are considered to be some of the most expensive and financially dangerous loans that consumers can use. Experts say last year’s drop in usage is good for Californians, but the industry still lacks the regulations needed to reduce loan risk for low-income consumers.

California lawmakers have a long story to try to regulate predatory loan in the state, but have failed to implement meaningful consumer protection against payday loans. The most notable legislation was passed in 2002, when California began requiring licenses from lenders. It also capped payday loans at $ 300.

Unlike other forms of borrowing, a payday loan is a short term loan where the borrower agrees to repay the money with their next paycheck. While lenders charge a fee instead of an interest rate, state regulators require an interest rate disclosure to indicate how expensive this form of borrowing is for consumers. When annualized, these loans average 361% in 2020.

In addition to sky-high interest rates, one of the industry’s main sources of income are fees, especially those of people who are serial reliant on payday loans.

A total of $ 164.7 million in transaction fees – 66% of industry commission revenue – came from clients who took out seven or more loans in 2020. About 55% of clients opened a new loan on the same day. of the end of their previous loan.

After several unsuccessful efforts in past years To regulate the industry, California lawmakers are not pursuing major reforms this session to combat the industry. Torres called for continued legislative efforts that would cap interest rates to ease what she calls the debt trap.

“It’s crazy to think that a decision maker would see this and say, ‘It’s okay. It is normal for my constituents to live in these circumstances, ”Torres said. “When it is in fact in the power of California policymakers to change that.”

Alternatives to a payday loan

There is evidence that the decrease in payroll activity correlates with COVID-19 relief efforts. While there are a number of factors in the decline, they likely include the distribution of stimulus checks, loan abstentions, and the growth of alternative funding options. More commonly referred to as “early access to pay,” the new industry claims it is a safer alternative.

Businesses lend a portion of a client’s salary through phone apps and do not charge interest charges. The product is not yet regulated, but the state’s financial monitoring agency has announced that it start surveying five companies currently providing the service.

The problem with this model, according to Torres, is that there is no direct pricing structure. To make a profit, apps require customers to tip for the service.

“Unfortunately, that tip often obscures the ultimate cost of the loan,” Torres said, adding that some companies go so far as to use psychological tactics to encourage customers to leave a big tip.

“Customers have expressed relief that our industry is always there for them under the most difficult circumstances and we are proud to be there during this time of need,” said Leonard.

Despite last year’s decline, 1.1 million customers borrowed a total of $ 1.7 billion in payday loans last year, with 75% of them coming back for at least one loan additional in the same year.

Torres said the Center for Responsible Lending continues to work with lawmakers to draft bills that would cap interest rates to make payday loans more affordable. Requiring lenders to assess the client’s ability to repay the loan would also prevent clients from falling into the debt trap, she said.

“They act like they’re offering this lifeline to someone,” Torres said. “It’s not a lifeline. They tie (the clients) with an anchor.

For the record: a previous version had the bad year for which California capped payday lending. That was in 2002. The story has also been updated to clarify how payday loans work and how borrowing costs are disclosed to consumers.

This article is part of California Division, a collaboration between newsrooms examining income inequality and economic survival in California.


CapRadio provides a trusted source of information through you. As a non-profit organization, donations from people like you support journalism that allows us to uncover stories that are important to our audiences. If you believe in what we do and support our mission, please donate today.

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Payday loans plummeted during pandemic, but Californians ‘not out of the woods’ – Santa Cruz Sentinel https://after-hours.org/payday-loans-plummeted-during-pandemic-but-californians-not-out-of-the-woods-santa-cruz-sentinel/ Thu, 29 Jul 2021 07:00:00 +0000 https://after-hours.org/payday-loans-plummeted-during-pandemic-but-californians-not-out-of-the-woods-santa-cruz-sentinel/ Government pandemic aid may have helped some Californians avoid resorting to expensive payday loans last year, but some experts say it may be too early to celebrate. A new report has found that in 2020, California saw a 40% drop in underwritten payday loans from 2019, a drop equivalent to $ 1.1 billion. Almost half […]]]>


Government pandemic aid may have helped some Californians avoid resorting to expensive payday loans last year, but some experts say it may be too early to celebrate.

A new report has found that in 2020, California saw a 40% drop in underwritten payday loans from 2019, a drop equivalent to $ 1.1 billion. Almost half a million fewer people have not used payday loans, down 30% from 2019.

Despite the unprecedented job loss triggered by the pandemic last year, the government-funded financial aid has been enough to have a huge impact on the payday lending industry, according to the California Department of Financial Protection and of innovation. The new State Department released the report last week as part of its continued efforts to regulate and supervise consumer financial products.

the report comes on the heels of California’s new $ 262.6 billion budget, with multiple programs aimed at reducing economic inequalities within the state. An unprecedented $ 11.9 billion will be spent for Golden State Stimulus Payments, a unique advantage that is unlikely to continue in the years to come.

“With the disappearance of these benefits, we expect that there will potentially be an increase (in payday loans),” said department spokeswoman Maria Luisa Cesar.

Only temporary relief

Industry Representatives, State Regulators, and Consumer Advocates Agree: Government Aid Has Helped Californians Avoid Dependence On Payday Loans, High-Interest Short-Term Loans That Need To Be Paid in full when borrowers receive their next paycheck. Additional reports have revealed that the California trend reflects trends in other states.

Thomas Léonard, executive director of the California Association of Financial Services Providers, said 2020 was a difficult year for the industry as the pandemic changed the way consumers managed their finances. His association represents providers of small dollar consumer loans, payday loans, check cashing and other financial services to consumers.

“The demand for small loans fell in 2020 as many consumers stayed at home, paid off debts, managed fewer expenses and received direct payments from the government,” Leonard said in a statement.

On the flip side, Cesar said the decline in the use of payday loans is not necessarily a sign of a better financial situation for Californians.

“It’s just too simplistic of a picture,” she said. “The cash aid efforts may have helped consumers make ends meet, but people have not come out of the woods.”

Marisabel Torres, California Policy Director for the Center for Responsible Lending, said that despite the impact of pandemic relief on Californians, some of these programs already have an end date. California moratorium on evictions, for example, is scheduled to end on September 30. The deployment of rental aid has been slow. Tenants with unpaid rent face potential eviction for those who cannot afford rent.

Once those programs are gone, Torres said, people will continue to need financial help.

“There’s still this large population that will continue to turn to these products,” Torres said.

With the exception of last year, the report showed that payday loan usage has remained stable over the past 10 years. But the use of payday loans doubled in the years following the Great Recession.

The state report does not provide any context on how consumers used payday loan money in 2020, but a to study by the Pew Charitable Trust in 2012 found that 69% of clients use the funds for recurring expenses, including rent, groceries and bills.

Almost half of all payday loan clients in 2020 had an average annual income of less than $ 30,000 per year, and 30% of clients were making $ 20,000 or less per year. Annual reports also consistently show higher usage among clients earning more than $ 90,000 per year, although the financial monitoring department has not been able to explain why.

“Basic necessities, like groceries, rent… To live you have to pay for these things,” Torres said. “Anything that eases this economic pressure is good for people. “

Lawmakers across California began to establish pilot programs that would ease some of this economic pressure. Stockton was the first town to experience a guaranteed income for its residents. Compton, Long Beach and Oakland have followed suit across the national Mayors of Guaranteed Income effort. California has approved its first guaranteed income program earlier this month.

Little regulation, high fees

Payday loans are considered to be some of the most expensive and financially dangerous loans that consumers can use. Experts say last year’s drop in usage is good for Californians, but the industry still lacks the regulations needed to reduce loan risk for low-income consumers.

California lawmakers have a long story to try to regulate predatory loan in the state, but have failed to implement meaningful consumer protection against payday loans. The most notable legislation was passed in 2002, when California began requiring licenses from lenders. It also capped payday loans at $ 300.

In addition to sky-high interest rates, one of the industry’s main sources of income are fees, especially those of people who are serial reliant on payday loans.

A total of $ 164.7 million in transaction fees – 66% of industry commission revenue – came from clients who took out seven or more loans in 2020. About 55% of clients opened a new loan on the same day. of the end of their previous loan.

After several unsuccessful efforts in past years To regulate the industry, California lawmakers are not pursuing major reforms this session to combat the industry. Torres called for continued legislative efforts that would cap interest rates to ease what she calls the debt trap.

“It’s crazy to think that a decision maker would see this and say, ‘It’s okay. It is normal for my constituents to live in these circumstances, ”Torres said. “When it is in fact in the power of California policymakers to change that.”

Alternatives to a payday loan

There is evidence that the decrease in payroll activity correlates with COVID-19 relief efforts. While there are a number of factors in the decline, they likely include the distribution of stimulus checks, loan abstentions, and the growth of alternative funding options. More commonly referred to as “early access to pay,” the new industry claims it is a safer alternative.

Businesses lend a portion of a client’s salary through phone apps and do not charge interest charges. The product is not yet regulated, but the state’s financial monitoring agency has announced that it start surveying five companies currently providing the service.

The problem with this model, according to Torres, is that there is no direct pricing structure. To make a profit, apps require customers to tip for the service.

“Unfortunately, that tip often obscures the ultimate cost of the loan,” Torres said, adding that some companies go so far as to use psychological tactics to encourage customers to leave a big tip.

“Customers have expressed relief that our industry is always there for them under the most difficult circumstances and we are proud to be there during this time of need,” said Leonard.

Despite last year’s decline, 1.1 million customers borrowed a total of $ 1.7 billion in payday loans last year, with 75% of them coming back for at least one loan additional in the same year.

Torres said the Center for Responsible Lending continues to work with lawmakers to draft bills that would cap interest rates to make payday loans more affordable. Requiring lenders to assess the client’s ability to repay the loan would also prevent clients from falling into the debt trap, she said.

“They act like they’re offering this lifeline to someone,” Torres said. “It’s not a lifeline. They tie (the clients) with an anchor.

This article is part of California Division, a collaboration between newsrooms examining income inequality and economic survival in California.



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Beware of high fees, high interest rates on payday loans https://after-hours.org/beware-of-high-fees-high-interest-rates-on-payday-loans/ Thu, 29 Jul 2021 07:00:00 +0000 https://after-hours.org/beware-of-high-fees-high-interest-rates-on-payday-loans/ If you are having trouble paying your bills, you might want to consider a payday loan. Corn Consumer Reports warns you that you need to be careful! Even with some recent reforms, many of these loans still come with high fees and very high interest rates. The good news is that there are alternatives – […]]]>


If you are having trouble paying your bills, you might want to consider a payday loan. Corn Consumer Reports warns you that you need to be careful! Even with some recent reforms, many of these loans still come with high fees and very high interest rates. The good news is that there are alternatives – if you know where to look.

The pandemic has really exacerbated the problems with payday lenders, especially for low-income people and black communities. So there has been a push to provide them with better and fairer banking services.

What can you do now if you need emergency cash quickly? First, find a Community Development Financial Institution (CDFI) near you. They are financial service providers, like a bank or a credit union, whose mission is to bring financial services to low-income communities, places that many traditional banks have largely excluded.

A d

And joining a CDFI can be affordable. They offer free or low cost banking services with an initial deposit as small as $ 25.

Another avenue that you can take is to find a nonprofit organization with a payment relief program. For example, Exodus loan is a non-profit organization dedicated to helping people get out of payday loan debt. These groups consolidate your loans without fees and interest.

If you are still considering a payday loan, state laws differ in Georgia and Florida. It is generally illegal in Georgia, unless the lender has a special state license. Here are the rules: https://dbf.georgia.gov/payday-lending

It’s legal in Florida but state regulated with consumer protections. Here are the rules: https://flofr.gov/sitePages/PaydayLenders.htm.

All Consumer Reports materials are copyright 2021 Consumer Reports, Inc. ALL RIGHTS RESERVED. Consumer Reports is a non-profit organization that does not accept any advertising. He has no commercial relationship with any advertiser or sponsor on this site. For more information, visit consumer.org.



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Consumer Reports: Alternatives to Payday Loans | WWTI https://after-hours.org/consumer-reports-alternatives-to-payday-loans-wwti/ Tue, 27 Jul 2021 19:18:49 +0000 https://after-hours.org/consumer-reports-alternatives-to-payday-loans-wwti/ Posted: Jul 27, 2021 / 3:18 PM EDT / Updated: Jul 27, 2021 / 5:31 PM EDT If you are having trouble paying your bills, you might want to consider a payday loan. But beware: even with some recent reforms, many of these loans still come with high fees and very high interest rates. The […]]]>


Posted:
Updated:

If you are having trouble paying your bills, you might want to consider a payday loan. But beware: even with some recent reforms, many of these loans still come with high fees and very high interest rates. The good news: There are alternatives – and as Consumer Reports explains, you just need to know where to look.


Missy Juliette was struggling to pay her rent and overdue utility bills. As a last resort, she turned to payday lenders.

As Missy says “I had run out of credit cards and had already asked my family for help with
passed, so I couldn’t go see them anymore… I was embarrassed.

Missy borrowed $ 730 in two separate loans. One of those loans had a whopping 266 percent interest rate, and she struggled to repay them.

And sadly, for millions of people like Missy who need emergency cash fast, payday lenders are truly one of the few options available. – But that may soon change.

Brian Vines, Consumer Reports investigative reporter, said, “The pandemic has really exacerbated the problems with payday lenders, especially in low-income and black communities. So what we have seen is this push to provide better and fairer banking services to these communities. “

What can you do now if you need emergency cash quickly? First, try to find a community development financial institution near you.

“CDFIs are financial service providers, like a bank or a credit union, whose mission is to bring financial services to low-income communities, places that many traditional banks have largely excluded. – Brian Vines, Consumer Reports investigative reporter.

Joining a CDFI can be affordable – offering free or low cost banking services with
an initial deposit as small as $ 25.

Another avenue that you can take is to find a nonprofit organization with a payment relief program. That’s what Missy ultimately did, seeking help from Exodus Lending, a nonprofit dedicated to helping people get out of payday loan debt. They consolidated his loans with no fees and no interest.

Missy is in better financial shape. “So instead of $ 50 to $ 200 in fees per month, I’m making an interest payment of $ 80 per month per year, and that has helped me a lot.”



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