by Wiseguy » Sun Mar 24, 2019 5:51 pm
Adam wrote: ↑Sat Mar 23, 2019 5:41 pm
TommyNoto wrote: ↑Sat Mar 23, 2019 11:26 am
Adam wrote: ↑Sat Mar 23, 2019 5:22 am
Something about usurious loans never seemed worth the risk to me. So in this case the guy was getting a little over 1 percent a week. But the initial investment is really high. You need almost two years of interest just to make sure it will cover the initial investment. And its illegal. So if it falls apart you lose all the money and you go to jail. Just never made sense.
Actually it’s one of their most lucrative rackets and will be a core racket until it’s last day.
They use it like an annuity , Even a relatively smaller $250K book at 1% ( usually the wholesale level) gets you $2,500 a week. This is basically what many of the guys ( especially blue collar) live off week to week .
Plus you are likely to end up w a business or 2 from one of your customers. Your average blue collar wise guy does some gambling , some book and some scores on the side to get his nut.
And this is where I get intrigued and try to understand it more. So say a small book has 250,000(and is that accurate? I honestly thought guys had lower ls banks in general). But its never 250 to one guy obviously(although that would be ideal) Isn't it a bunch of big and small and long term and short term loans that require a lot of work to get, and collect. And you have to make sure that money is out to make money. Just seems like a bad way to make money. A lot of work and GIGANTIC risk.
Keep in mind that many (probably most) loanshark customers are gamblers. Case in point, a bettor gets in debt to the mob bookie for, say, $10,000. The bets were on credit and he doesn't have the money to pay up. The debt gets turned into a "loan," even though no actual money has changed hands yet. The mob bookie allows the bettor to simply pay the interest on the loan. The interest may be 2% ($200). It may be 5% ($500). That's each week. The mob bookie/loanshark can "juice" the guy forever since that weekly interest never has to come off the principal. Even at 2% the debt has been recovered in a year and the gambler still owes the full $10,000. Of course, if the gambler can't even pay the weekly interest, it may be a case of trying to profit from him some other way, i.e a piece of a business or whatever. Yes, there are risks. Hence the extremely high interest rates. And the mob obviously has collecting methods that legit lenders don't have. In short, gambling is how they hook you. Loansharking is how they keep you.
CabriniGreen wrote: ↑Sun Mar 24, 2019 12:53 amAlso, IveyLeague posted a FANTASTIC article on MCAs, merchant cash advances,
To quote Darth Vader, that name no longer has any meaning to me.
[quote=Adam post_id=105201 time=1553388083 user_id=5231]
[quote=TommyNoto post_id=105157 time=1553365573 user_id=5187]
[quote=Adam post_id=105133 time=1553343722 user_id=5231]
Something about usurious loans never seemed worth the risk to me. So in this case the guy was getting a little over 1 percent a week. But the initial investment is really high. You need almost two years of interest just to make sure it will cover the initial investment. And its illegal. So if it falls apart you lose all the money and you go to jail. Just never made sense.
[/quote]
Actually it’s one of their most lucrative rackets and will be a core racket until it’s last day.
They use it like an annuity , Even a relatively smaller $250K book at 1% ( usually the wholesale level) gets you $2,500 a week. This is basically what many of the guys ( especially blue collar) live off week to week .
Plus you are likely to end up w a business or 2 from one of your customers. Your average blue collar wise guy does some gambling , some book and some scores on the side to get his nut.
[/quote]
And this is where I get intrigued and try to understand it more. So say a small book has 250,000(and is that accurate? I honestly thought guys had lower ls banks in general). But its never 250 to one guy obviously(although that would be ideal) Isn't it a bunch of big and small and long term and short term loans that require a lot of work to get, and collect. And you have to make sure that money is out to make money. Just seems like a bad way to make money. A lot of work and GIGANTIC risk.
[/quote]
Keep in mind that many (probably most) loanshark customers are gamblers. Case in point, a bettor gets in debt to the mob bookie for, say, $10,000. The bets were on credit and he doesn't have the money to pay up. The debt gets turned into a "loan," even though no actual money has changed hands yet. The mob bookie allows the bettor to simply pay the interest on the loan. The interest may be 2% ($200). It may be 5% ($500). That's each week. The mob bookie/loanshark can "juice" the guy forever since that weekly interest never has to come off the principal. Even at 2% the debt has been recovered in a year and the gambler still owes the full $10,000. Of course, if the gambler can't even pay the weekly interest, it may be a case of trying to profit from him some other way, i.e a piece of a business or whatever. Yes, there are risks. Hence the extremely high interest rates. And the mob obviously has collecting methods that legit lenders don't have. In short, gambling is how they hook you. Loansharking is how they keep you.
[quote=CabriniGreen post_id=105228 time=1553414030 user_id=5378]Also, IveyLeague posted a FANTASTIC article on MCAs, merchant cash advances,
[/quote]
To quote Darth Vader, that name no longer has any meaning to me.