With an economy that is negatively affected by a heavy recession and new payday regulations each year, payday loan companies are trying out new strategies. Because of the new restrictions, one very well established payday loan company is going to turn some of it’s South Carolina lending stores into small loaning businesses, with longer-term loans and infinite amounts of cash, before the end of 2009. There is a chance that other payday loaning companies follow suit and switch to supervised lending licenses, yet there is no clear sign that they will choose this path.
Jabo Covert, vice president of government affairs for Check Into Cash, declared that it is almost impossible for them to keep the current strategies on those stores, blaming the current economy and the ever-changing laws regarding payday loans. He also said that the new supervised stores will be able to loan sums of $500 to $700 or more for longer periods of time, that will be repaid in identical sums at unspecified interest rates.
Check Into Cash employs around 300 workers in South Carolina alone, and has setup it’s business in 32 states, yet it has had to shut down around 200 of it’s stores in the past years.
There will be new laws coming into effect in 2010, which will allow payday companies to lend a maximum of $550 dollars, the current loan limit being $300 dollars, with a maximum of $15 dollars interest per $100 dollars loaned.
In light of numerous restrictions imposed on physical payday loan locations, many lenders are turning to the internet for payday leads. Business can be set up without monstrous overhead, and restrictions are more flexible.
