Description of Our Business

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Our Business

Description of Our Business

Our accompanying consolidated financial statements include the accounts of Atlanticus Holdings Corporation (the “Company”) and those entities we control. We are primarily focused on providing financial services. Through our subsidiaries, we offer an array of financial products and services to a market largely represented by credit risks that regulators classify as “sub-prime.” As discussed further below, we reflect our business lines within two reportable segments:  Credit and Other Investments; and Auto Finance. See also Note 3, “Segment Reporting,” for further details.

Within our Credit and Other Investments segment, we offer point-of-sale financing whereby we partner with retailers and service providers to provide credit to their customers for the purchase of goods and services or rental of merchandise to their customers under rent-to-own arrangements.

These services are often extended to customers who may have been declined under traditional financing options. We specialize in providing this "second look" credit service in various industries across the United States (“U.S.”). Using our infrastructure and technology platform, we also provide loan servicing activities, including underwriting, marketing, customer service and collections operations for third parties.

Also within this segment, we continue to collect on portfolios of credit card receivables. These receivables include both receivables we originated through third-party financial institutions and portfolios of receivables we purchased from third-party financial institutions. One of our portfolios of credit card receivables is encumbered by non-recourse structured financing, and for this portfolio our principal remaining economic interest is the servicing compensation we receive as an offset against our servicing costs given that the likely future collections on the portfolio are insufficient to allow for full repayment of the financing. We also report within our Credit and Other Investments segment the income earned from investments in two equity-method investees—one that holds credit card receivables for which we are the servicer and another that holds structured financing notes underlying credit card receivables for which we are the servicer. In December 2014, we consolidated the entity that held structured financing notes underlying credit card receivables for which we are the servicer. This was a result of our distribution of certain assets to an unrelated third-party partner in that entity for their interest. As such, as of December 31, 2014 only one equity-method investee remained.

Lastly, through our Credit and Other Investments segment, we engage in testing and limited investment activities in consumer finance technology platforms as we seek to capitalize on our expertise and infrastructure. 

Within our Auto Finance segment, our CAR subsidiary operations principally purchase and/or service loans secured by automobiles from or for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, used car business. We purchase auto loans at a discount and with dealer retentions or holdbacks that provide risk protection. Also within our Auto Finance segment, we manage portfolios of auto finance receivables that we previously originated through franchised and independent auto dealers in connection with prior business activities, as well as provide additional lending products, such as floor plan financing and additional installment lending products to certain dealers.