Payday Loan Industry-Opportunities, Challenges and Respect

Jer here. My rant today targets the multitude of opportunities in the payday loan space.

Capital is simply a commodity! Ask what your financier brings to the table in addition to dollars.

This isn’t a short analysis. You want superficial B.S? Click away now . Pay the price, invest 5 minutes of your time and THINK.

There are serious disturbances occurring today. Worldwide consumer demand, technology, regulatory oversight, extraordinary availability of capital, disclosure and cycle-of-debt issues…

What does all this really mean? There has never been more opportunity in our space than today. Sure, there are challenges.


Customers all over the world – by the millions – want our product.

What’s this mean to you? How do you want to get involved?

Do you want to partner? Are you an Investor? A Lender? Have capital? Need capital? Got an idea? Are you a vendor? A seller? Want to sell your stores? Your Internet operation? Sell your portfolio?

LET ME KNOW! I’M BOMBARDED DAILY by Lenders, Operators, Investors, Buyers, VC’s, Hedge Funds and Entrepreneurs! Let’s explore together…

Here are a few in no particular order:

  • Serious $$ ($2M-$10M+) needs placement. Very smart, experienced operators are in demand! The financiers need YOU! ROI? Depends on the “deal,” the structure, the Team, the terms,the exit strategy…
  • Capital looking for opportunities. Know anyone with a SOLID team in place, not a start-up, already have substantial “skin in the game ($$) who needs capital $2M+ for funding PDL’s (no infrastructure build-out, no operations expenses to be paid with a new capital infusion), probably earn 2% – 5%/month or more depending on the deal/structure/equity?
  •  Brick-n-mortar buyers with cash! Want to sell? Fast?
  •  Internet biz buyers. Want to sell your Internet Biz/Portfolio?
  • Investors: 3rd Party Lenders in Texas! Huge demand due to disclosure requirement of Third Party Lender on new CAB License as of January 1st, 2012. Fully collateralized, 15-20% annual ROI is typical. Secondary challenge is the $25k net asset requirement per location – operators need help with this kind of operating capital too. There are over 3,500 Texas CSO’s and Texas is blowing up with business
  • Operator with 10 years+ experience, started Brick-n-mortar, now have $150K on the street via Internet. Looking for $100K – $500K in tranches strictly for funding PDL’s via the Internet. Strong Team!. Couple of state licenses currently..Ready to rock-n-roll!
  • So. California stores for sale.
  • Mississippi stores for sale
  •  Missouri stores for sale
  • Several other states with stores for sale
  • We have a “ton” of small, very experienced Lenders in PDL or car title all over the USA looking for expansion capital. For example, very small car title Lender in TX, 15 years exp. looking for $50K for funding. These are not start-ups. They just can’t meet demand nor can they access the banks. Boatloads of this scenario! Beautiful, tightly run store winning system and making money.
  • Tribes need access to capital to launch PDL operations, casinos, check cashing stores, infrastructure, training and more.
  •  Exploring the tribal/sovereign nation model? Need help?
  • Are you a compliance pro? An “in-the-trenches collaborator” capable of working with “crazy” payday loan entrepreneurs?
  • Need help navigating the Texas CSO>CAB transition?
  • Are you a seasoned payday loan professional looking for new opportunities? Are you a Lender in need of experienced talent? Our industry in cranking! Complete privacy assured.
  • Analytic savants needed. Everyone is working on their “secret sauce.”
  • Plenty more all over the map but I gotta go row! Newport Beach is BEAUTIFUL today!

Look, my phone rings off the hook all day! Some days I’m on it non-stop. (Actually I have 2 cells, a notebook, a laptop, a desk top, and iPad and an iPod!).I’m buried with the daily dynamics and opportunities in Lending. Call me 702-208-6736. Send an email with your ideas/needs.

And do your research! Get up to speed. Figure out what you want to do in this PDL game. It’s INTERNATIONAL! Visit the DFC Global web site and listen to their last 10K! Look-up Zest Cash, Wonga, DebtResolve… They’re all discussed on my Blog.


Finally: A RESPECTFUL, short comment about our industry by a Banker:



Just getting started?


Bankers Can Learn from Payday Loan Lenders

Payday loan lenders get a little respect! Michael Moebs, CEO of Moebs Services, was quoted in American Banker as follows:

“Banks can learn from payday lenders’ streamlined lending approach, says Moebs. “The thing that I’ve admired about that industry is it’s extremely efficient. They would make a banker’s head spin with how fast they can make a loan and how good they are at it,” he says. Payday lenders “take ten minutes to make a payday loan and the banker takes an hour,” he adds.

Personally, I think “an hour” is overly optimistic but the point is noted!

Of course, most of us know banks have been providing capital to the big guns in the payday loan industry since the 80’s. And several, including Chase and Wells Fargo, are offering payday loan styled products to their customers having basic bank accounts coupled with direct deposit. APR’s for their model can exceed 400%.

Read the Article here: American Banker – Banks Can Learn from Payday Lenders.

What do you think? Leave a Comment! New to the industry? Go here: Start a Payday Loan Biz


CFPB Payday Loan Short Term Small Dollar Lending Examination Report

This from the CFPB website January 19, 2012:

Today, the Consumer Financial Protection Bureau traveled to
Birmingham, Ala., for our first field hearing. We gathered to
discuss and collect information on payday lending. The payday
lending market is a multi-billion dollar industry in the United
States, and Alabama has one of the largest concentrations of payday
lenders in the country.

Payday loans can arrive the same day and are usually due to be paid
back within two weeks. Many consumers turn to payday loans because
they find themselves in a financial pinch. However, these
small-dollar loans can come at a hefty price, sometimes with an APR
of more than 400 percent. When consumers can’t pay on time, they
find themselves taking on more debt to cover the previous loan that
has now come due. This can quickly lead consumers down a road of
risk that often spirals into an ongoing cycle of debt.

We understand that there is demand for small-value loans from many
consumers. Even some traditional banks now offer a similar product
called a deposit “advance.” But we want to make sure that consumers
understand the consequences of their decisions and are protected
from risks that may be inherent in these products. Today, we
released our procedures for examining bank and nonbank institutions
offering short-term, small-dollar loans.

The goal of our field hearing is to listen, learn, and gather
information to help us better understand the payday lending market
so that we can choose the appropriate tools to balance the needs of
consumers with the risks they face. Please use the comment box
below to tell us about your experiences with payday loans. (You can
also tell us your story privately.)


A Tribal Perspective on the Payday Loan Industry offers some compelling commentary regarding why the payday loan tribal (Sovereign Nation ) model is under attack.  Here’s a portion of the Post at their Blog:

“There are over 22,000 payday loan stores in the United States. Regardless of protests from consumer advocates this is clearly a product with high demand. The majority of those stores are operated by a handful of large publicly-traded companies. Those companies are facing competition from online lenders and they are trying to use the political system to protect them. The short-term consumer lending industry is highly regulated. Each state has its own regulations and they vary widely. Loan amounts, terms and rates are different in almost every state. Anyone who can make loans throughout the country following a single set of loan terms can be a very efficient and effective competitor. Tribal lending corporations are that competitor and the Community Financial Services Association of America (CFSA) wants the federal and state governments to ban them from the business.”

Read the entire Article here:

Thoughts? Comment! Tweet! Like! Get involved!



PDL Convention-CFSA Community Financial Services of America

I’ll be at the March CFSA 2012 so call/text if you want to meet up and buy me a glass of vino :o) If you’re currently in the payday loan space, or you plan to be, you must attend CFSA 2012. Here’s a link to check it out: CFSA Event For the password to enter the site, please contact CFSA’s Annual Meeting Planning Team at Hurry if you want to save $200 on the registration fee (for both members and non-members)! Offer ends January 13th.