Payday loans firms - who funds them & how?

Apples2

booktownman wrote: »

where do they get the money to lend to clients?

They chop the tops of lamp posts off and sell them to scrap iron merchants for the cash.

[Deleted User]

Clive_Woody wrote: »

I believe that mostly the money comes from Colombian drug lords, Somali pirates and of course Tony and Cheri Blair.

Colombian drug lords and Somali pirates I can live with, but Tony and Cheri Blair is a different matter altogether. :eek:

Clive_Woody

DCFC79 wrote: »

Anyway, have any of you checked out the OP's first thread from 2011, he really didnt like the replies given so I imagine we will get the same response.

Just had a look.

Do you think he/she got a PDL to pay for their car repairs?

gb12345

Apples2 wrote: »

They chop the tops of lamp posts off and sell them to scrap iron merchants for the cash.

That's a really dangerous thing to do - some idiot in a car could end up driving straight into the remaining stump.

Loughton_Monkey

booktownman wrote: »

Are they any financial experts out there who can explain to me who funds Payday loans companies & how - where do they get the money to lend to clients?

Deep in the heart of Wonga, the capital of Bongo-Bongo land, there lived a Church of England vicar called Welby. He wasn't paid much, because he ran an extremely small parish of ex-pats, the locals preferring to worship Prince Phillip. Welby supplemented his income by building 3-foot posts in the car park, and demanding repayment from parishioners every time they drove into one. He would lend them money at 5,000% interest.

Eventually he bribed his way up the tree to become Archbishop of Canterbury, at which point, he set up a PDL company called Wonga under loads of assumed names. Knowing that his cover was about to be blown, he pretended to dislike Wonga and threatened to drive them out of business by setting up a clone operation within all the substantial number of UK churches.

This plan is currently on hold while the heat dies down, but will be resurrected once everyone has forgotten about it. Hopefully this will coincide with a time when BOE doubles the bank rate to 1%, at which time Welby will reveal his new organisation "Church Organisation for Financing Unsecured Payments", otherwise known as COFF-UP, charging 10,000% interest and "inviting" defaulters to special "prayer meetings" with the local "Priest" who will offer "counselling" aimed at finding way of paying their debts.

Apart from that, I know very little else. I'd only be making it up....

kabayiri

Technically, this market is known as "subprime" not payday loans.

There are some new entrants to this market, some of which are effectively white label. If you dig a little you will see the usual established companies such as Provident behind the names.

To work out company financial associations is possible. There are companies which specialise in providing data linking companies together. Their usual customer is a risk department, not an individual though.

Running_Horse

A workmate was talking about someone he knew who was in finance and apparently they borrow a chunk of money from the City and re-lend it in various guises at higher interest rates. Although his acquaintance has apparently gone to prison for some kind of fraud.

grizzly1911

gb12345 wrote: »

That's a really dangerous thing to do - some idiot in a car could end up driving straight into the remaining stump.

By us they remove kerbside drain grids. Some idiots in cars and on bicycles could end up down the drain.

purch

kabayiri wrote: »

Technically, this market is known as "subprime" not payday loans.

There are some new entrants to this market, some of which are effectively white label. If you dig a little you will see the usual established companies such as Provident behind the names.

And of course a company such as Provident raises funding by perfectly legitimate means, such as issuing retails Bonds at 7% which are usually heavily oversubscribed.

It's a relatively successful business model, and over time as the newer lenders become more established they too will be able to fund themselves through the wholesale markets.