Cash America 2002 Annual Report Download - page 9

Cash America International, Inc.
First and foremost is the
pawn loan.
It’s reported that over 30
million members of the population
in the U.S. are underbanked.
Typically, pawn customers do not
have checking accounts and choose
not to utilize traditional financial
institutions. The pawn loan is a
secured non-recourse loan, which
means customers bring in an item
of value to a Cash America
location where it will be held safe
and secure in the customer’s name
as collateral.
Cash America holds the
collateral item on the
borrower’s behalf until it is
redeemed through the payment
of the loan principal and fees
owed under the terms of the loan
contract. The customer has the
choice of paying off the loan at
any time during the loan term and
having the merchandise returned,
but has no obligation to do so.
While there is no
obligation to redeem the
pawn loan, the vast
majority of customers do
pay off the loan and pick
up their merchandise.
In the U.S., the
average loan amount is $75 with a
90-day term. In the event the loan
is not redeemed, the collateral
becomes the property of Cash
America. Unredeemed collateral
then goes on sale in our inviting,
customer-friendly locations
throughout the country. Seven out
of ten customers in the U.S. and
nine out of ten customers in Europe
choose to redeem their item by
repaying the loan plus the fees.
Because our locations are
connected by a state-of-the-art
computer network and are
geographically diverse, Cash
America can efficiently dispose of
unredeemed loan collateral. More
and more, people are turning to
Cash America for great deals on
quality pre-owned merchandise. A
large part of what they’ll find is
jewelry, but we also offer a wide
assortment of items including
televisions, stereos, tools and
musical instruments.
Customers choose.
Customers of Cash America
have another borrowing alternative
as well. Short-term cash advances
offer people a financial bridge to
the next payday. It’s a way for a
student to pay rent, or a
schoolteacher to fix the
car before payday. This
option is becoming more
and more popular, and Cash
America has made a
considerable effort to address
the customer demand for this
alternative by continuing to refine
this product offering during the
past year.
Here’s how it works: A customer
comes into Cash America, bringing
verification of employment (two
most recent pay stubs), recent bank
statements and utility bills. An
application for credit is completed
and input into a proprietary
centralized underwriting network to
determine if a loan can be approved
and for what amount. The decision
is quick, usually less than five
minutes. The customer will then
sign a promissory note, related
documents and leave a personal
The long and short of Cash America’s lending business.
7
Television and electronics display in
San Antonio, Texas.
Customer service counter for
cash advance product.