If you can juggle it, run the tobacco store, dollar+ store, scary Chinese restaurant, hair place and shipping store at the same time and get a discount on the strip mall space!
In all seriousness .. . almost like asking . . What do you think about me becoming a Slum lord? No disrespect the Op but . .this business is about one of the most immoral out there. Rocket River
Add me to the list of people who see the whole industry as a blight upon our society. I'd like to just ban them. As for owning it, I imagine you'll end up having to associate with a lot of shady people. If it were me, that'd wear on me too much.
I honestly don't understand why is this considering immoral? It is a business, the goal of a business is to make money, and no one is forcing these people to take it. Banks won't give these people money, and if they need money that badly they have to pay interest on it, just like how most people have to pay interest on Student Loans, House Mortgage, or anything else. Based on this being immoral these things are too. Anyways.... These businesses worry me because they have to be located in shady areas. Some good things about them you can get real estate at a great price for places that are great for these. Small required buildout cost/rent would be my guess, so you can probably buy this off of someone for a decent price.
The real issues are the high rate: between 10% and 25% for a two-week loan. The types of people who need cash that quickly one week will probably need it that quickly for the next few weeks: and then the fees add up. That having been said, alot of these people can't get credit anywhere else, so they'll keep coming back. I say if you want to make some decent cash, do it. Probably branch out to pawn-broking, money orders and cell-phones/pagers to diversify your income, hedge against your insanely high default rate and possibly allow yourself to keep your rates around 10 - 15%.
I'm needing some help from my fellow C. Fans. I'm considering purchasing an existing kiddie p*rn/meth lab/dog fighting business and would like to hear from your personal experiences about using such services? Would you continue to use such a place? What are some new services or features you would like? What did you hate about it? Thanks guys...
Someone that does not have $200 one day is not likely to have $225 in two weeks. Instead, they are likely to only have enough to "refinance" the loan every two weeks because of lies that they will be arrested if they don't pay it. This means that after several months, they will have paid the immoral piece of trash that is running the payday lender hundreds if not thousands of dollars due to false threats without repaying any principal. They are now illegal in many states and the only reason they are not illegal here is because we have a state attorney general that is in their pocket. They keep poor people poor and prey on the uneducated, especially members of the military. There is a circle of hell reserved for the bottom feeders that provide this "service" that banks do not.
I have an in-law who's the CEO of a nationwide corporation that, under his direction, got into the payday loan business because it is very profitable. While I otherwise have the greatest respect for him and really like the guy a great deal, I can't help but view this as a character flaw. He's intelligent enough to know he's taking advantage of those most easily taken advantage of. In fact, he's a brilliant fellow. The rest of his corporation is very, very successful, so it isn't like he had to get into this business. He just couldn't ignore the profit potential of exploiting the poor, the struggling, the illegal immigrants, etc., that typically use these services. Or, as he would put it, he couldn't ignore the profit potential. While I don't know how profitable this particular payday loan business is, odds are that it is a money maker. Just be aware that a lot of folks have a big problem with the morality of that kind of business and I think it is with good reason.
Ok I am still baffled by this. This WITHOUT A DOUBT is taking advantage of people, but would you give them a loan if they really needed it? You already stated a bank won't. What do these people do if they need money? The worse credit you have the more they charge you for interest with Banks/Cars also. These people have likely bad credit or no credit (if they are illegal). There is also fees for home ownership when someone can't pay enough down, and it is a 10% monthly fee, which is nonsensically high, but no one is claiming that is "immoral." Fact is the more risk that someone is taking, the more interest that will be charged. I can never see myself doing this business simply because I think it is a huge cash business and I'd be scared of that aspect. Honestly though these people are taking advantage of poor people, but are also the only people willing to give these people a chance, so they are doing a service for these people too, who may need cash now for any reason and have no way to get it otherwise.
If you look at the annual percentage rate, it is nowhere near 10%. Ten percent would be great. Payday and title loans have APRs that are in the 500 to 1,000% range. No one needs loans like that.
Clearly it is higher than 10%, but I have great credit, good income, enough money in bank to fall back on rent for a few months. These people are needing cash NOW, meaning they have NOTHING to back themselves up besides their next paycheck, if they lose their job tomorrow, these payday loan places are out of luck. Which is the reason for the nonsensically high interest rate.
If no one needed loans like that, then these places would go out of business. Open and free capital market sets the APR and APY of these loans. If people are willing to pay a certain rate on a loan, it will be made available to them. If no one was willing to accept loans at such terms, lenders would have no choice but to lower rates or go out of business.
Because they are unsophisticated and being taken advantage of. Because they do not understand how high the interest really is. Because they think that they will be allowed to pay it off over time, even though that is not allowed. The terms of the contract require that the consumer either repay the entire loan or pay to refinance the loan each time the loan comes due. The refinance charge, which is often close to the amount that was borrowed, does not actually count towards any principal on the loan. The poor people that the immoral, dirty, rotten piece of crap payday lenders are trying to "help" by giving them 1,000% interest loans that they can never repay do not repay them. Instead, they default on other bills and fall deeper into a debt trap while refinancing the payday loans out of fear of prison until they finally give up. Giving up and not repaying or refinancing the loan is usually the first sophisticated and educated financial decision the consumer makes after taking out the payday loan. They stop paying once they realize that the loan shark was lying when they told them they would be arrested for not repaying the loan. It really does not get any more immoral than tricking people into a 1,000 percent loan.
The ONLY thing keeping the business going is the lie that people will be arrested if they do not repay or refinance the loan.
This assumes that consumers actually repay the loan when they get paid. That almost never happens. It is not because the consumer loses his or her job. It is because the consumer already lives paycheck to paycheck and if they could not afford an extra 100 dollars this week they will not be able to afford an extra 100 dollars next week.
I think the fact that people are willing to pay the premium to get a short term loan is more of a thing keeping them in business than your example. I am not saying these businesses are a shining beacon of light, but they obviously serve a purpose. Again, why do people use them if they are so horrible? What is the compelling reason?
The compelling reason is lack of education and fear. What is the compelling reason that people smoke crack or shoot heroin? It is because they do not understand the risk until it is too late. If it were legal to sell crack and heroin and if Montel Williams was in commercials telling people about the benefits of crack and heroin, they would also be very profitable businesses.
Just because something is legal . . does not make it ethical and moral. Tricking a Mentally Challenged girl into having sex is immoral . . . yea she may have wanted it .. but that don't make it right Rocket River
