Credit Policy for businesses and how to extend credit and manage credit risk

When I owned my collection agency I did collection work for many payday loan companies.  I had always thought they were similar to a rent to own type of business. 

Payday loan companies have a bad rap.  This may be because people are not really sure what a payday loan company is.  Payday Loans ABC is trying to change that.

Payday loans are short term loans that allow borrowers to obtain funds by promising to repay the loan when they receive their next paycheck.  Typical loans are about 2 weeks, and the fees for a short term cash advance such as this range from $10 to $20 per $100 borrowed.

Pretty steep you might say, but this is like any other credit risk, and the borrower knows the terms up front.  Payday loans are not the type of loans people go out to get to make a major purchase, they are for emergency situations or for someone who has no credit or bad credit and can’t get a better deal anywhere else. 

Payday Loans ABC has a website that can answer any questions someone would have about payday loans, they also have a very up to date page of the news about the payday loan industry and what is going on. 

When you choose the apply online option you choose from 3 approved lenders that they have chosen.  I noticed the second one on the list is based out of the UK and does offer a ‘contact us” option that I did not find on the first lenders site.  The other two seemed secure as well.  When you do anything you should always check references, contact the Better Business Bureau or visit the store before doing business with anyone, especially if it is a company you have not dealt with before.  If you have any questions, make sure you ask them before you sign on the dotted line, and read what you sign! 

Payday loans might be good for a quick fix, but don’t rely on them for working capital.