Canadian subprime lender goeasy tightens standards

Canadian subprime lender goeasy has tightened standards and launched a six-point path to profitability following the announcement of hundreds of millions in net charge-offs in the fourth quarter. The Mississauga, Ontario-based financier’s net charge-offs increased to 23.8% in Q4 2025, up from 9.2% in Q4 2024, according to its earnings presentation published April 1. The rise in net charge-offs mainly came from LendCare , a subsidiary offering auto and powersports loans to subprime consumers. LendCare’s net charge-offs rose to around 40% in Q4 2025 and included CA$178 million ($128.1 million) of incremental charge-offs, according to the presentation. Goeasy announced about $241 million in net charge-offs on March 10 after weaker-than-expected recovery efforts on vehicles. The rise in net charge-offs follow accusations by short seller Victor Bonilla at Jehoshaphat Research , published in September 2025, that the company delayed the recognition of delinquencies and loan losses. Goeasy has historically operated as a short-term lender and may have lacked the experience to stay competitive and profitable in the subprime auto lending market, Bonilla told Auto Finance News . “They clearly do not know auto finance the way other companies know auto finance,” he said. Lendcare has “significantly tightened credit standards and reduced exposure in auto lending, powersports and other merchant channels,” Chief Executive Patrick Ens said during goeasy’s April 1 earnings call. “We are fundamentally reassessing our approach in this area.”— Patrick Ens, goeasy CEO Lendcare will have maintain some presence, he confirmed. Six-point plan Reducing Lendcare originations is one item in a six-point plan to carve a path to profitability, which includes, according to the presentation: Focusing growth on easyfinancial , Goeasy’s direct-to-consumer lending arm; Unifying easyfinancial and LendCare’s loan processing teams; Cutting 9% of employees on March 12; Appointing Farhan Ali Khan as head of LendCare; and Suspending dividends and renegotiating covenant agreements for liquidity. The plan “stabilizes the business in the near-term, and it sets out some of the core elements of a strategy to establish a stronger foundation for future profitable growth,” Ens said during the call. The lender’s willingness to scale back its auto and powersports lending, as well as appoint new leadership, indicates it is taking the right steps, Jehoshaphat’s Bonilla said. The charge-off controversy appears to be an isolated event rather than a sign of a broader subprime auto crisis, he said. “Goeasy is not indicative of a problem. … The story is this company did some things wrong, and they are cleaning up their act,” he said. Goeasy suspended its full 2026 guidance, but provided some expectations for the year, according to the presentation: Gross consumer loans receivable will total $3.8 billion to $3.9 billion in Q1 2026; Net charge-offs will reach 17.5% to 18.5% in Q1before falling to “mid-teens” in full-year 2026; and Total yield on consumer loans is expected to reach between 27% and 28% in Q1 and will improve over the course of the year. Shares of goeasy Ltd. fell 2.3% in Canadian markets to $26.92 by market close. The lender has a market cap of $407.8 million. Editor’s note: all figures have been converted from CAD to USD. Auto Finance News will present multiple invaluable events for industry professionals in 2026, starting with Auto Finance Summit East and Auto Finance Capital Summit in May. To see event agendas and register, visit autofinance.live .

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Canadian subprime lender goeasy tightens standards

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