How the Business of Money Lending and Pawning Works and How to Obtain an International License
Offshore Money Lending and Pawning License A potentially very lucrative offshore business is money lending and pawning. It is possible to obtain a offshore license of money lending and pawning to do business in the country where licensed. Potential annual revenue can be over 50% of invested capital. A well thought out business plan with sufficient support in all business operations can make this an ideal offshore business for the interested investor. Although those setting up such an offshore business are more accustomed to obtaining loans at a bank this is not the case with large segments of society throughout the world. Many people typically make end meet between paydays by pawning valuable items such as gold jewelry. This is a multibillion dollar business worldwide. Setting up this sort of business will typically cost around $27,000 with annual costs of around $12,500. All directors, officers, and shareholders of the business will need to provide specific personal and financial information. However, it is possible to use qualified nominee services. In setting up an offshore money lending and pawning business it is possible and often advisable to outsource back office functions, web site setup and maintenance, and other business functions with which the owners may be unfamiliar. How the Business of Money Lending and Pawning Works A business with a money lending and pawning license will accept personal and household goods of known value in exchange for providing otherwise unsecured loans. Loans are typically in the $100 to $5,000 range. Interest is commonly paid monthly at rates up to 4% a month (48% a year) or more. Because interest monies received can be loaned out again the potential compounded rate is above 48% a year on 4% loans. Other fees related to the loan have the capacity to further increase the potential return on investment. Although typical interest rates can run from 4 to 6 % it is perfectly legal in some jurisdictions to charge as much as 25% on a short term loan. A common type of collateral, for otherwise unsecured loans, is gold. A money lending and pawning operation will typically hold gold, or other assets, worth twice the value of the loan. In a rising gold market the value of held collateral will often exceed the value of the loan. If the business chooses to hold other items it must have the expertise in house to appraise on the spot, the facilities to store various items and the staff to sell items left for forfeit if loans are not paid. Given that much of what is left for collateral will be gold and the business must have a fair amount of cash on hand, a secure safe will be necessary. Common loans to employed people are payday loans. The individual will often be a repeat customer. He or she will have provided proof of employment and proof that he or she had not written back checks. Use of a check as collateral can be combined with physical collateral as well in a pawning business. Very short term loans are typically still charged a month’s worth of interest. Thus interest for just a few days may run as high as 15 to 25 % of the value of the loan. Because many borrowers will pay monthly interest payments some loans, a money lending and pawing operation will earn as much as a three fold turn on investment. An offshore formations and banking specialist working for several companies regarding offshore structures, formation of companies, foundations, banks and financial institutions in several jurisdictions, including provision of government issued financial licenses. Working for User Bancorp Ltd, which is providing private and corporate accounts, merchant accounts, offshore companies such as Belize IBC’s (International Business Company), Panama corporations and foundations, wire transfer services, managed funds/forex, credit- debit- and prepaid card issuing. We also offer co-ownership and shares in different investment programs such as real estate investment in profitable jurizdictions like Panama, Belize and Spain. Certificate of Deposit/Term Deposit accounts available up to 9 % p.a. Contact me on e-mail: geir.holstad@userbancorp.com |
|
|