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Registered
Join Date: Aug 1999
Location: port st lucie/stuart florida
Posts: 366
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Cash Advance Business- Any one here own one or operate one?
A buddy and I have been looking into starting some type of cash advance business. From what we've researched they appear to to very well. Any one here own one or operate one? or have any other good info.
TIA |
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09-20-2011, 12:32 PM
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The Unsettler
Join Date: Dec 2002
Location: Lantanna TX
Posts: 23,885
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No advice other than your clients will likely be pillars of the community.
You're gonna need a thick skin.
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"I want my two dollars" "Goodbye and thanks for the fish" "Proud Member and Supporter of the YWL" "Brandon Won" |
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09-20-2011, 12:46 PM
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Make Bruins Great Again
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That is a business that is becoming more highly regulated. Rent to own was the first big business until regulation and many went away. Now, car title loans seems to be the latest.
One of the huge Check cashing companies in the area has shifted focus to title loans recently.
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-------------------------------------- Joe See Porsche run. Run, Porsche, Run: `87 911 Carrera |
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09-20-2011, 12:50 PM
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Registered
Join Date: Jul 2010
Location: Houston
Posts: 824
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Is it worth it to deal with bull**** on a daily basis just to make a buck?
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DD summer/winter: 2000 Boxster S DD spring/fall: 914-6 w/ 3.0L SC Dual Webers (For Sale) http://imgur.com/a/k0Wtl - My 914-6 Build/Project Story |
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09-20-2011, 02:21 PM
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Registered
Join Date: Oct 2003
Location: Michigan
Posts: 14,093
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Will you be making annoying commercials that run constantly on the local tv?
 There's a fella here in Flint that must be doing pretty well. He's opened several new sites in the past couple of years.
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1981 911SC ROW SOLD - JULY 2015 Pacific Blue Wayne |
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09-20-2011, 02:25 PM
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Team California
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Isn't there something in the bible about these businesses?
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Denis Trump uses an autopen and votes by mail, in case anyone wonders.
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09-20-2011, 02:28 PM
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Cogito Ergo Sum
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Yup...
The guys that own them are LOADED! Open a liquor store and a pawn shop while you are at it... |
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09-20-2011, 02:33 PM
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Registered
Join Date: Aug 1999
Location: port st lucie/stuart florida
Posts: 366
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I understand the downsides of the business, you'd be suprised how many people use them.
I'm looking at this from a purely financial standpoint. Ie Do they make money? I figured someone on here would own one, or knew someone that does. |
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09-20-2011, 08:39 PM
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Burn the fire.
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One of my co-workers owns one and so far is doing pretty well (3 months in). Apparently the real money is in franchising out.
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[x] Working | [_] Broken: 2017 Victory Octane [x] Working | [_] Broken: 2005 Ram 1500 SLT w/5.7L Hemi "Drive it like you stole it." |
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09-20-2011, 08:53 PM
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Team California
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I'm guessing that usory laws do not apply to these somehow(?) What collateral do they take from the borrower?
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Denis Trump uses an autopen and votes by mail, in case anyone wonders.
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09-20-2011, 08:58 PM
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Checked out
Join Date: Jun 2009
Location: On a beach
Posts: 10,127
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Most businesses that service the poor do well.
Pawn shops, payday loans, auto title loans, liquor stores in poor areas, etc. And, businesses who service the poor are one of the few growth businesses, as their customer base just keeps getting larger and larger, and will continue to for some time, probably a long time. |
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09-20-2011, 08:58 PM
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Checked out
Join Date: Jun 2009
Location: On a beach
Posts: 10,127
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Quote:
There is no collateral, these are very short term unsecured loans. The loan period is usually until the borrower's next paycheck is received, so usually less than 2 weeks. Although there is no collateral, you do usually have to prove you have a job (usually by showing your prior paychecks) to convince them you have a paycheck coming. And, the borrower usually has to write out and give a post-dated check that the lender can cash after the date on the check. Because the term is so short, and the loan amount so small, the % rate can be extremely high, but not painful. For ex., if you borrow $200, and pay back $220, the loan only cost you a few packs of smokes, but the Annual Percentage Rate is huge. (I'm not good at math, but that would be an APR of what, 200%+?). If you go into one of these shops, they will usually have signs disclosing the APR (signs required by many states). The APRs are in the hundreds. Because these are small unsecured loans, the default rate is very high. |
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09-20-2011, 09:11 PM
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Registered
Join Date: Oct 2006
Location: So-Cal
Posts: 429
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460% APR in California
Almost worth the BS
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1987 Carrera |
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09-20-2011, 09:13 PM
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Checked out
Join Date: Jun 2009
Location: On a beach
Posts: 10,127
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There you go.
At 400% APR, and spreading the risk among thousands of small, short term loans given to people that have a job and checking account (that indicates at least some level of responsibility), and having very low overhead (usually a very small shop in a strip mall in a not-so-high-rent place in town), you can have a high default rate and still do quite well. |
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09-20-2011, 09:18 PM
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Cogito Ergo Sum
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I'd think the hardest part about it would be having the cash to get going, and getting the procedure set up to be quick and seamless.
That and a kickass location |
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09-20-2011, 09:54 PM
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Dog-faced pony soldier
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"Kickass location" for these sorts of businesses would be:
1. Any location adjacent to a Popeye's 2. Any location adjacent to an El Pollo Loco 3. Any location adjacent to (or better still, co-located with) a Greyhound terminal 4. Any location adjacent to a welfare office Good luck.
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A car, a 911, a motorbike and a few surfboards Black Cars Matter |
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09-21-2011, 05:03 AM
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Max
1986 Porsche 944 2.5l
2017 Victory Octane
2005 Dodge Ram 1500 SLT
