Investing in a Pay Day Loan Business?

Would you put your money in a PayDay loan business as an investor ( passive one). There are companies I have seen and they advertise 5%-15% ROR a month for blokes who send them 20K.

What is the deal with these? They seem to be legit and have offices and storefronts and all.

Would you put your money in there? Outside of moral/ethical considerations and all, is this a good investment financially

speaking?

Investing in a Pay Day Loan Business?

When you invest, it's not the industry as much as the people you're giving money to. Are the people of this company reputable? Do they have a good track record? Anyone can show you large numbers, do they have character?

As far as the payday industry, my company provides payday loan software: http://introxl.com/. This is a $15b/year industry.

Just some insight, the reason why payday loan companies search out private equity is because it's hard for banks to lend money to companies that lend money to people they would never lend money to. I also have a background in commercial banking.

If you want to learn more about the industry, you can check out a few of the publicly held payday companies. Their 10ks give a lot of good information. I like using Yahoo Finance:

EZCORP Inc. (EZPW), Advance America (NYSE: AEA), Dollar Financial (Nasdaq: DLLR), Cash America's (NYSE: CSH).

Investing in a Pay Day Loan Business?

Anything that says you will get 5%-15% return per month is a scam

Avoid it at all costs.