Elevate Credit, a US-based provider of online credit solutions including credit cards, has announced plans to retreat from the UK market.
From 29 June 2020, the firm’s wholly-owned UK unit Elevate Credit International (ECIL) will end business in the UK.
The unit has been placed under administration, with KPMG serving as the administrator with direct control of the business.
The UK unit will be presented as discontinued operations from the second quarter of this year.
ECIL offers consumer loans under the brand ‘Sunny’ in the UK.
The decision to put the UK unit under administration was triggered by the lack of regulatory clarity in the UK, which is said to have hampered the operations of the ‘Sunny’ brand.
The situation worsened as a result of the Covid-19 pandemic, noted the firm.
Elevate president and CEO Jason Harvison said: “Regulators in the UK were unable to provide clarity that would allow Sunny to continue and sadly, the consumers’ choice for the most safe and reliable short-term credit option in the UK has ceased operations.
“I would like to give my sincere thanks to all of our UK employees and the thousands of Sunny customers who trusted us over the years.”
Elevate announced an estimated net impairment loss of around $10m on its ECIL investment upon the deconsolidation.
Elevate’s only remaining material exposure to the UK unit is its guarantee of ECIL’s repayment of its outstanding debt worth around £10.2m.
ECIL is expected to repay its outstanding debt obligation completely by 2020-end.
In addition to Sunny, Elevate’s offerings include RISE, Elastic, and Today Card.