Daniel O’Sullivan

Posted by on May 26, 2008 in Quotes

Daniel O’Sullivan

“Fifteen is the magic number… Once it gets below $15, the attractiveness of the product goes away exponentially, given the fact that loan losses can be quite significant.”

Equity analyst Daniel O’Sullivan believes that a payday loan shop must charge a minimum of $15 per $100 borrowed to remain profitable…

Calculated using the Payday Loan Calculator (External Link), this works out to an interest rate of 391.07% APR on a 14 day loan.

According to an article by Craig Harris, O’Sullivan said that six publicly held companies:

  • dominate the payday loan industry in the United States
  • generated $3 billion in revenues last year
  • generated $189 million in profits last year
  • control about 25,000 payday loan shops (twice the number of Starbucks Coffee shops in the USA!)

Daniel O’Sullivan is a senior equity analyst for New York-based Utendahl Capital Partners. He covers consumer-finance companies.

Source: Facing Ban, Payday Lenders Look to Voters by Craig Harris (The Arizona Republic)

Does the quote “$15 per $100 borrowed to remain profitable” only apply to the larger cash advance corporations? A payday lender in Canada recently told the Manitoba Public Utilities Board that their rate cap of $17 per $100 borrowed would probably drive all but the biggest payday lender out of the province.

Recently, we reported on an online payday loan site that seems to have gone out of business. They were charging $15 per $100. Details can be found in our Update entitled GoFastCash Goes Under?

It makes me wonder: How does GetYourCashToday get by? They seem to be doing just fine charging only $10 per $100 borrowed!

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