Tag: payday loan company


DFC Global (Payday Loans, Pawn) Borrowing $200 million at 3.25% senior convertible notes due 2017.

DFC Global -DLLR- is getting their hands on $200 million dollars at 3.25%! Yeah, the notes have a convertible feature with a 21% premium but geez Louise! My clients and I have to pay 2% – 3% A MONTH for capital to put on the street.

From the Press Release:

The notes will be unsecured, senior obligations of the Company and will pay interest semi-annually at a rate of 3.25%. Prior to October 15, 2016, the notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day preceding the maturity date. Upon conversion, holders will receive cash up to the principal amount and shares of the Company’s common stock in respect of any excess conversion amount. The initial conversion rate for the notes is 46.8962 shares of common stock per $1,000 principal amount of the notes, which is equal to a conversion price of approximately $21.32 per share, representing a 29.0% conversion premium based on the closing price of the Company’s common stock of $16.53 per share on April 10, 2012. The notes mature on April 15, 2017.


Tales from the Payday Loan Trenches

A guy I know, we’ll call him Bob, opened a payday loan store roughly 3 years ago in a state having decent payday loan legislation in place. Now at the time, Bob knew doodly-squat about a payday loan business! His brother in-law had mentioned the fact that he had to go down to the local payday loan store and make a payment on his loan.

Bob decided to tag along with his brother-in-law. Needless to say, my friend Bob was blown away by what he saw! A 450 square foot office with 6 customers waitng to either get a loan or make a payment.

Bob did his research and opened his first location. Roughly a year and a half later, he opened a second in the same town.

So… today, Bob calls me. He wants to “run some numbers by me.” I say, “Sure Bob, go ahead. I’ll give you my 2 cents worth.”

Bob’s two stores are “netting $50,000 a month before taxes.” He’s got a default rate of less than 3%. (Bob’s a little maniacal. He visits his late payers at their home! 3 years on the job are required to qualify for a loan from him.)

Bob asks me, “Are my numbers good?”

“Are they good?”, I say! “Damn%^&* they’re good!”

Bob’s so deep in the trenches running his biz he’s got no idea! He wants to know how he compares with his payday loan brethren! When he called me he admitted he was behind the counter in his store!

Bob’s not going to the CFSA Convention. Bob’s never been to a FISCA Convention. He’s never heard of OLA. Bob’s running his payday loan biz and making good money doing it. $50,000 a month net before taxes! With 2 stores and a 3rd on the way!! In 3 years!!!

Sometimes I get so wrapped up in MY DEALS (Sovereign Nation Model, Offshore Model, smart phone aps, call centers, lead providers, consulting… ) I forget what it’s like to actually run a store. It’s been a while!

My point with this is that it’s still doable. There are guys like my friend Bob who are doing their research, entering the biz and making great money!

Bob just needed a little positive feedback! He’s so damn busy running and building his business he’s not able to sniff the air. He doesn’t have time to network or find out what’s the latest and greatest new widget/strategy/solution.

Bob’s just patiently plugging away making MONEY! Bob’s like hundreds of other payday loan, car title lenders and check cashers. They’re staying under the radar and building wealth! AND working HARD!

Bob, all I can say is, “You’re doing great! Now back to work!”

And Bob, keep up with the industry by reading my ramblings :o)

PS: Yeah, I know. The consumer protectionists and the legislators are gonna jump all over this! They’re going to say Bob is making too much $$ or charging too high a fee to his customers. Like Bob told me, “Tell them it’s guys like me whose taxes and licensing fees pay their salaries.” Tell them, “My customers are just glad I’m here for them when they need me.” And finally ask them, “How many actual payday loan customers complained about me or the industry?”

And yes, I did make up the “brother-in-law” part of this story. But the numbers are reported EXACTLY!

Comments? Thoughts? Attacks? Ideas?



Positive Payday Loan News-Wall Street Journal and CNBC

The payday loan industry received some very positive attention from wall street today! Get a copy of today’s Wall Street Journal and view CNBC’s Maria Baritromo program!

The Wall Street Journal has a piece entitled, “Dodd-Frank and the Return of the Loan Shark.” Yeah, hate the title but love the overall tone of the piece.

We’ll cover this in depth over the next couple of days. We simply want to alert you that wall street has identified the payday loan industry as a great area to make some money.

A few of more highlights to come:

AEA and DLLR are up 50%.

Same store sales and revenues are improving.

Consumers are moving from former credit systems into payday loans.

International payday loan lenders are growing.

“Buying a basket of payday lending stocks not a bad call!”

There are of course, still regulation questions on the state and national level to be considered.

Banks are driving consumers to payday loans and other AFS products.

Resurging growth of payday loan lenders is being seen in the U.S.

As I said, we’ll do more on this in the coming days.

And remember, “The future is ours.”



Payday Loan Collection Scam – Vultures on the Prowl

Payday Loan Collection Scams

If you’re one of the millions of payday loan consumers out there, BEWARE!

Collection company agents are scamming payday loan users out of their hard earned cash.

The Kansas Attorney General, Steve Six, reports that Kansas residents are complaining about collectors calling with claims that the consumer took out an Internet based payday loan and never repaid it.

There are unsubstantiated claims by residents of other states as well.

Some of these payday loan collection agents are posing as law enforcement officers! It’s not uncommon for these collectors to threaten consumers with jail.

Payday loan consumers should be aware that their is no debtor’s prison in America.

These scam artists often identify themselves as ACS, National Affidavit Processing Department and United Financial Crime Division. The calls may be originating offshore.

It’s not unusual for the payday loan collection agents to have the ability to provide their victims with personal data including social security numbers and bank account information; even computer IP numbers.

Western Union appears to be the preferred method of payment requested of the consumers.

If contacted, consumers should demand a written notice specifying the amount of the debt, the name of the payday loan company, contact information of the payday loan company, and validation of the debt.

We advise the consumer to immediately determine if the payday loan company is licensed in the consumer’s state! If not, do not pay!

One last point; our readers should not conclude that these collection scams are singularly focused on the payday loan industry. These vultures ply their wares in virtually every financial product offered in the marketplace today.


Advance America Suffers 4 Percent Profit Loss & Loses Chairman

Advance America announced their chairman and co-founder, George Johnson, stepped down for personal reasons.

Advance America was founded in 1997 and currently is operating approximately 2800 loan centers in not only the USA but additionally in Canada and England.

William (Billy) Webster who is also a co-founder will replace Johnson.

The scuttlebutt is that Johnson resigned after the company posted a 4% profit loss in the first six months of the year. Others in the industry discount this assessment.

There is little doubt the payday loan industry is under attack as is the mortgage industry, the credit card industry, the banking industry, the oil industry, and others. It’s been noted elsewhere that when the US economy experiences a slowdown the regulators and
competitors, under the guise of consumer protection, attack our industry more vociferously than ever.

Ultimately the payday loan industry is driven by consumer demand; consumers have a huge demand for small loans that are easily obtained with a minimum of hassle. That describes the payday loan product!

Bottom line, when the car requires repair, or the lights are about to be turned off, or you need cash to pay for a presciption, or, or, or… The payday loan product fills the need. And it has certainly been proven that a $15 fee per $100 loaned is still a better deal than bounced check charges or overdraft fees.Why Banks Hate Payday Loans

It should be noted that even in states/provinces not having payday loan physical locations, consumers by the tens of thousands apply for and receive funds via the Internet or call centers! Many of these businesses are offshore. Regulators, legislators and competitors (so-called consumer protectionists) are forcing payday loan consumers into the hands of the offshore companies. Domestic payday loan companies welcome regulation as long as they are allowed to continue to operate at a reasonable profit under any proposed legislation.