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What does it take to open a payday loan business?
Posted on 12/11/13 at 4:28 pm
Posted on 12/11/13 at 4:28 pm
How hard is it to open and run a pay day loan place? They pop up and I always think to myself that it seems like a bad idea when there's 5 others within a mile.
Yet these places stay in business even after they're robbed or even shot, so obviously they are making money.
Anyone here been involved with one?
Yet these places stay in business even after they're robbed or even shot, so obviously they are making money.
Anyone here been involved with one?
6
Posted on 12/11/13 at 4:55 pm to Asgard Device
quote:
What does it take to open a payday loan business?
No soul
Posted on 12/11/13 at 5:54 pm to Asgard Device
(no message)
This post was edited on 1/19/14 at 6:07 pm
Posted on 12/11/13 at 6:57 pm to Asgard Device
Lots of capital
Posted on 12/11/13 at 7:15 pm to Asgard Device
Someone just asked this same thing a few weeks ago.
I think the industry has heavy federal regulations now.
I think the industry has heavy federal regulations now.
Posted on 12/11/13 at 7:38 pm to wizziko
quote:
No soul
This.
Posted on 12/11/13 at 7:57 pm to nolanola
With the CFPB just starting to get going, I would be worried with this industry being heavily scrutinized in the years to come. But who knows how long that will take.
Posted on 12/11/13 at 9:44 pm to yellowfin
quote:
Lots of capital
Eh, not as much as people would think.
But a good manager who is experienced would be key.
And the CFPB is a going concern...ESPECIALLY for the pay day industry. If you were serious about starting a loan company, a regular subprime loan company might be a safer move. Still, you'd have to be seriously willing to call customers and work delinquent accounts hard to keep from charging off loans. This is where an experienced manager can be worth every penny.
Posted on 12/11/13 at 10:07 pm to Asgard Device
quote:
Yet these places stay in business even after they're robbed or even shot, so obviously they are making money.
I'm sure there are plenty of businesses that operate without making a profit. Because they are covering for illicit profits.
Posted on 12/12/13 at 6:50 am to GeauxColonels
quote:
Eh, not as much as people would think.
Family owns a chain with just under 20 locations. It's pretty significant.
Posted on 12/12/13 at 7:55 am to Asgard Device
From what I understand the biggest thing is getting money out on the streets. I know a guy that does small loans in a similar fashion. You have some capital and borrow some. You charge a larger rate and shorter period than you borrow. Get as much out as possible and expect for some not to pay. Get a good repo guy with a big sack and start writing loans. The more money you loan out the more you make. So the chains with the most capital and write the most loans make the most money. Problem is if you can't secure enough capital to loan out it raises your risk because you can't write enough loans to cover yourself for the % that don't pay. My buddy only loans like a grand unsecured. But mostly 3-500.
Posted on 12/12/13 at 9:25 am to yellowfin
For payday loans?
I am spitballing here, but you can't need more than 75k per store. If you have 50k out at 500% annualized, you would be grossing a quarter mill per store.
ETA: geauxcolonels knows a lot about this subject as well.
I am spitballing here, but you can't need more than 75k per store. If you have 50k out at 500% annualized, you would be grossing a quarter mill per store.
ETA: geauxcolonels knows a lot about this subject as well.
This post was edited on 12/12/13 at 9:27 am
Posted on 12/12/13 at 10:09 am to yellowfin
quote:
Family owns a chain with just under 20 locations. It's pretty significant.
Well, sure for 20 locations you need a lot. But to start a loan office the amount isn't that significant, in my opiion. Of course, "a lot" is all relative to the person.
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