Negative ProfitabilityPersisting net losses and negative EBIT margins indicate the business is not yet generating sustainable profits. Continued unprofitability erodes capital, limits internal capital accumulation, and increases reliance on external funding or equity raises, constraining long-term scalability and investor confidence.
High LeverageA high debt-to-equity ratio raises refinancing and interest-rate sensitivity risks, particularly for a credit services firm. Elevated leverage heightens vulnerability to funding market tightening, increases cost of capital, and can force deleveraging actions that slow growth or require asset sales.
Cash Flow VolatilityLarge swings in operating cash flow and a high ratio to net income point to inconsistent collections or timing mismatches. This volatility undermines planning, may require standby liquidity, and could impair the company’s ability to service debt or fund loan originations reliably over several quarters.