Our Services

1) Third Party Lending for Credit Services Organizations

A) For portfolios of $1 million or more, PDL Capital will strongly consider becoming a Third Party Lender for CSO's.

Requirements:

1. You must be able to guarantee 100% of loaned principal in the form of a bank letter of credit, pledged liquid assets, or a first lien on real estate.
2. If you do not have enough collateral coverage, see below.
3. For each customer payment that comes back NSF, your CSO must reimburse us for principal, interest at the statutory rate of 10% APR, a $30 NSF charge, and a late fee equal to 5% of principal.
4. Large privately-held companies or publicly-traded corporations will receive more favorable terms.

B) For portfolios under $1 million, our subsidiary company PDL Broker, Inc. can arrange for one of our many affiliate lenders to handle your lending needs.

Requirements:

1. You must be able to guarantee 100% of loaned principal in the form of a bank letter of credit, pledged liquid assets, or a first lien on real estate.
2. If you do not have enough collateral coverage, see below
3. Lender default reimbursements range from just interest at 10% APR plus a 1% fee above that for both NSF and late charges, to full reimbursement per section 1A.
4. A Finder's Fee, payable to PDL Broker, ranging from $0.25 to $1.00 per hundred borrowed for 1 - 3 years. Generally speaking, the more experience you have as a CSO and the larger your portfolio, the smaller the fee.

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2) Consulting for Credit Services Organizations

Running a CSO is a complex and daunting undertaking. We are thoroughly versed in all aspects of the model, with a particular expertise in compliance. We can assist anyone from the start-up operation to the experienced operator.

A) Full Consulting Package - $5,000
We guide you every step of the way through the process of forming and maintaining a Texas CSO, including: formation of corporate entity, Texas CSO formation, getting a bond, providing Lender-Customer and CSO-Lender Agreements; CSO Customer Disclosures; Privacy Policies; Marketing; Lead Generation; analysis of underwriting criteria; how to choose a software provider; how to guarantee principal for your third party lender; operational structure; how to manage cash flow among the parties; collections; and state compliance.

We also provide vendor referrals.

Payment schedule: $2,000 to retain; $2,000 upon delivery of Texas CSO Customer Disclosure; $500 for first two months after you begin making loans.

B) Ad-Hoc Consulting - $250/hr.
You may retain us on an-hoc basis to assist with any aspect of implementing the Texas CSO model. We bill in quarter-hour increments.


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3) Hard Money Lending

Payday lenders, check cashers, CUSO's, and auto title lenders may be eligible to receive financing to expand working capital or to lend to customers. We generally can either make or arrange financing for 50 - 70% of the value of your business.

A) First-Tier Loans
PDL Broker may be able to arrange term loans or lines of credit at rates ranging from Prime + 1 to Prime + 4, as well as refinance existing ones.

Requirements:

1. Annualized EBITDA must exceed annualized debt service by 2x.
2. Asset-to-Liability ratio must be at least 1:1
3. Liabilities cannot exceed capital by more than 2.5x. Shareholder debt is not included in the numerator (liabilities) but is included as part of capital.
4. Security will be a 1st position lien on company assets
5. Owners must provide Personal Guaranty
6. Max loan amount: 50% of annual gross revenues

B) Second-Tier Loans
PDL Broker may be able to arrange term loans or lines of credit at rates ranging from 16% - 24% APR. This option may be suitable for businesses that are unable to meet First-Tier requirements, but still have modest cash flow and are not over-leveraged.

C) Third-Tier Loans
We may be able to offer, or arrange financing for, all other businesses who have specialized circumstances which prohibit them from obtaining other financing. Interest rates range from 24% and up, most between 30% and 36% APR.


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4) Equity Financing

Depending on your business experience, PDL Capital may offer to make an equity investment and become background partners in your operation.

Requirements:

1. A comprehensive business plan
2. Must include monthly projected P&L, Cash Flow & Balance Sheet
3. Must have experience in proposed operation, or something similar to it
4. Must include detailed explanations of risk
5. Minimum projected returns must be 20% annualized (it's fine to have a loss at first if the returns come over time)

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For CSO operations that do not have 100% collateral coverage

Although we all know that typical default rates are far below 10%, a Third Party Lender will not lend for a Texas Credit Services Organization under any circumstances without 100% coverage.

For those without such coverage, you can still do business by utilizing Texas CSO Insurance Products, offered by a Vendor that we can refer you to. These products will cover all principal and interest payments due to the third party lender for defaults. It is expensive, but once you build up a sizable portfolio and have enough cash to set aside for 100% Lender coverage, you can cancel the Insurance Product.

Texas CSO Default Insurance begins at a rate of 7% of Principal + CSO fee. (i.e. For a $100 loan and $20 CSO fee, the cost is 7% of $120, or $8.40)

This rate is adjusted upwards or downwards based on your default rate, with a floor of 3%. So if you are careful with your underwriting, your insurance will cost less.

You will also need to purchase a standard theft and liability insurance product, with an Employee Fidelity rider, from another insurance company we can refer you to. This is not terribly expensive and is a good idea anyway.

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