Starting a payday loan business at this time will prove to be a very profitable decision. The owner is not only in the business to make a handsome profit, but he is also in the position to help those who find themselves in a financial bind. The reason for this is that every person all over the world will find himself, at one time or another, in some kind of a financial crunch. Be it a medical emergency or some bills that have to be paid, the payday loan business is there to help fill that need.
For someone who makes just enough money to pay his daily expenses, a sudden need such as a new tire that has to be bought, or some repairs that have to be done immediately around the house, will definitely cause him some financial problems. The amount may not be big enough for him to require a major loan, but small enough for an advance from his paycheck.
This is where payday loans online come into the picture. A payday loan business provides small loans from $100 to $1,500 to its borrowers. The loan is short-term as its maturity is the next payday. Average payback day is 8 days. A payday loan business is seen to be the fastest growing financial business in the industry today.
Consider these numbers:
• About 70% of the population in the USA alone is living from paycheck to paycheck. This makes them vulnerable to any financial crunch and will find the need for a paycheck cash advance at one point in their lives.
• Though laws vary from state to state, borrowers pay from $10 to $35 for every $100 borrowed at an average payback time of 8 days.
• 12 – 14 million households were served in the last year alone.
• There were 100 million payday loan transactions done last year.
• Payday loan lead generating companies sell at least 20,000 leads per month to payday loan agents at an average of $25 – $35 each.
Payday loans were created to help a person in need of some cash before their next payday. Its interest rates and fees may be a bit high but it is lower than the interest rates of credit cards. Some people consider payday loans to be a better option to accruing interest to their credit cards due to late payments. Others will also take advantage of payday loans instead of paying the bank penalties for check overdrafts.
Certainly, putting up a payday loan business will yield the business owner very good profits. What is necessary is to study the business very well. If you already have an existing business but have an extra 5ft x 5ft space, putting up a payday loan business will not incur a lot of expenses. Some payday loan business entrepreneurs are able to start their business with just $1000 in capital. If you are starting from scratch, you’ll need a higher capital. The internet has also proved to be a great source of growth for the payday loan industry by making the process easier for the borrower.