Cash America 2006 Annual Report Download - page 9

Cash access.
Cash America International, Inc.
7
In today’s fast-paced environment, it is
not unusual for ordinary hardworking
Americans to be faced with an
unexpected urgent need for cash.
Frequently the ability to access this cash
is not available at traditional banks, and
Cash America is there in that time of need,
providing access and alternatives to our
customers. Offering small, short-term loans
gives customers a lower-cost option to high
penalties or late fees associated with the
inability to receive cash when they need
it. Our loans range from a few weeks to
a few months, giving customers the ability
to choose a financial solution that is right
for them.
One of the fastest-growing financial
tools available in America today is our
cash advance product, often referred
to as a payday loan. Cash advances
are preferred by our customers over
increasingly high bank fees, NSF charges,
late fees on credit cards and, of course,
penalty charges and fees on delinquent
accounts from utility companies or
mortgage services.
How Americans gain access when traditional services fail them.
A customer brings in paperwork such
as a current pay stub, bank statements
and utility bills and applies for a short-term
loan. The customer signs a promissory
note and related documents and, in many
cases, leaves a personal check for the
loan amount plus fees. The customer has
the option of paying off the loan in cash
or allowing Cash America to deposit or
electronically process the check at the end
of the loan term, which is usually about
two weeks. Unlike pawn loans, cash
advances are based on the customer’s
personal credit, with no collateral.
Cash advances are typically larger than
average pawn loans. Customers with
a job, an active checking account and a
qualifying credit score from our internally
developed scoring model have access to
the cash advance option as a means of
getting the funds they need quickly.
Friendly and knowledgeable
customer service representatives are
prepared to assist customers in all
782 lending locations.
Composition
of net
revenue
31%
Pawn
service
charges
2%
Check
cashing/
other
27%
Profit on sale of
merchandise
40%
Short-term
cash advance
fees
Twelve months ended
December 31, 2006