Cash America 2003 Annual Report Download - page 11

CASH AM ERICA IN TERN ATIO N AL, IN C.
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The customer has the option to come into any
lending location and pay off the loan in cash, or allow
the lender to deposit the check at the end of the loan
term. In general, the cash advance is a
shorter-term and more convenient option
for the customer compared to the typical
pawn loan, which is 90 days in length and
requires collateral.
Cash advances are another important
way Cash America helps people get where
they’re going. Demand for this alternative
form of credit is growing rapidly as more
people learn of this recent innovation as a short-term
financial solution.
Cash America offers the cash advance product
directly in many locations and makes it available
through a third-party financial institution at
other locations.
As of year end, Cash America operated 19
locations that offer only cash advance loans. This
concept allows the
Company to broaden its
reach and penetrate
markets that are not
well-suited for a full-scale
pawn lending business.
These stores provide
Cash America with a new platform for growth,
to complement and enhance the growth and unit
expansion of our traditional pawnshop business.
With a customer-centric orientation, Cash
America, the first public chain of pawnshops and the
largest operator of pawnshops in the world, continues
to bring about positive change and innovation within
the industry.
One product innovation that customers
embraced, and Cash America has adopted, is the
cash advance transaction to meet a financial need. A
cash advance is a small loan that is not based on
collateral. The process for the customer is simple.
Customers bring specific required documents – which
may include recent pay stubs, recent bank statements
and utility bills – into a lending location. They
complete an application for credit, which a
Cash America customer-service representative inputs
into a proprietary centralized underwriting network
to determine if a loan can be approved, and for how
much. The average cash advance is about $300,
compared to the average U.S. pawn loan, which is
about $90. On approval, the customer signs a
promissory note and related documents and leaves a
personal check for the loan amount plus fees. The
length of the cash advance loan averages about two
weeks, but can be as long as 45 days.