You may not be accustomed to this part of America since many here don't speak English or not well. Nevertheless, the people in this area are Hispanic but they're Americans and they work so damn hard to succeed.
Some don't make it but a larger reason for the success of these types of places is more likely to be the expense of banks. Overdraft charges from a bank can easily murder someone with not much money so many here don't use banks at all.
Unknown if a bank was involved in financing this restaurant but it's similar to many in the area.
Hispanic people know very well about parties.
This one is wild.
The people in the house next door throw parties all the time and the volume goes up a little but there are no out of control drunkies running around making a stupid ruckus. They have many parties but they're always very cool.
Taqueria restaurants are more common than McDonald's, much more common.
Perhaps you have heard of Pollo Loco (Spanish for 'crazy chicken') and this is a Pollo Loco trailer for a truck.
If the only way to launch the business is to do it from your house then it will happen that way.
All of these places are on Hemphill Avenue in Fort Worth, Texas.
Some don't make it but a larger reason for the success of these types of places is more likely to be the expense of banks. Overdraft charges from a bank can easily murder someone with not much money so many here don't use banks at all.
Unknown if a bank was involved in financing this restaurant but it's similar to many in the area.
Hispanic people know very well about parties.
This one is wild.
The people in the house next door throw parties all the time and the volume goes up a little but there are no out of control drunkies running around making a stupid ruckus. They have many parties but they're always very cool.
Taqueria restaurants are more common than McDonald's, much more common.
Perhaps you have heard of Pollo Loco (Spanish for 'crazy chicken') and this is a Pollo Loco trailer for a truck.
If the only way to launch the business is to do it from your house then it will happen that way.
All of these places are on Hemphill Avenue in Fort Worth, Texas.
9 comments:
Most of these businesses are self-financing, in that banks won't lend them money. The check cashers exist because about 30 years ago banks moved out of lower income areas. Many banks today don't even desire to serve the middle class as witnessed by the high maintenance fees they charge (i.e. bounce one check and be charged fees like $110). Suddenly the fees for money orders, payday loan advances, etc don't seem so onerous. So many people today aren't even living paycheck to paycheck. The check cashers do actually serve these communities. They have become the bank of the lower middle class and poor. Most banks tend to reject these consumers as undesirable and unprofitable.. Since financing is difficult to obtain, especially for Hispanics, they start small and through support of the Hispanic community they grow. It is difficult because government regulations discourage small businesses and favor the large ones with lobbyists.
I saw many businesses in my career that were failing brought back to life by hard working Hispanic business people. The reason that some of the businesses have apartments above are this is where the family lives. When you open at 6am and close at 10pm family life is difficult unless everyone lives close. Family is an extremely important part of Hispanic society. Family also provides a ready cheap source of labor. Many of these buildings are from the early 20th century when shopkeepers typically lived above the business serving an ethnic immigrant community. So, today these neighborhoods have begun to thrive again in the 21st century using the same principles of hard work, family and community support.
At first I was totally opposed to the check cashers but talking with you made it clear there's a valid service they provide and it's an important one.
I've admired several times on Ithaka how hard they work. They did a really superlative job on the rehab of the house next door and the one across the street is nearly ready after years of work have gone into it. They keep coming back, maybe not even every day, but they don't give up.
Lotho has said the same thing and his knowledge is better after working with Hispanic people for much of the time he has been in TN.
I suggest the two of you review your opinion of check cashing and title loan companies. They came in to existence when Congress deregulated and removed the caps on allowable interest rates charged.
If used as just a check cashing business they are still exorbitantly over priced as Walmart etc will cash for 1/3 the charge.
When they are allowed to charge 500% interest rates, they are not a service but an extension of the old mob loans hark.
Example I go get a $200 loan paybacknow $203 at payday but that is only the first week to extend that loan I must pay an application fee usually $70-90. Now I owe $293, each period I can roll the loan over by just paying the interest of the loan.
Title loans are very similar but lower rates as they have some collateral.
Most of these customers have multiple loans at multiple companies.
This is the hardest aspect of the people that I help and counsel. As they have absolutely no way out themselves.
As for the business financing most of the Hispanic business owners thato I know use the Asian model. Where a group of familits Pool their money and buy a business as it becomes profitable they spin the profit to buy another business until all members have a profit Center.
You see the same model used with Pakistanis in hotels and Indians in Convenience store. Most immigrants can't use the banking system aso it is inherentlying racist run by fat white men helping fat white men. I know I am stereotyping. I believe most cultures begin with what they know. So while they begin in a single niche they quickly expand their reaching influence.
So no one uses these check cashing or title loan businesses because they want to but because they see no other option.
By the time they realize what they have gotten into it is impossible to to get out other than default or bankruptcy
I know there are tremendous problems with them and legislation to regulate them was killed within the last three months or so. I don't know where people get loans for their small businesses but hopefully not with a check cashing outfit. Even so, the expense of banks makes these kind of places attractive and part of what they do fills a valid need (i.e. the check cashing part).
My opinion of check cashing and title loan companies is based on 30 years of experience working directly with these businesses and many others marketing wire transfer and money order services starting in 1985, I retired in 2015, There was a symbiotic relationship only as we offered no check cashing or loan services.
I worked primarily on the outside. So, I visited the stores on a daily basis. The work involved personal interaction with the end user customers, as well as the businesses that serve them. Walmart, CVS and many other large chains were businesses served. In addition, we also served many small independent businesses (i.e.: Bob's Check Casher/Payday Loan, Bob's Supermarket, Bob's Convenience and Drug Store).
Since most large chains are in suburban areas the small independents are who serve the inner city neighborhoods. The inner city neighborhoods in big cities like Chicago, Detroit, New York, Washington DC, as well as smaller markets like Columbus, Cleveland, Pittsburgh, Indianapolis are tough places. Many areas like Gary, South Chicago, East Cleveland and Detroit even the police don't go into by themselves. My job required that I did.
In review, I agree with Anonymous. Check cashing and payday loan/auto title businesses exist because customers have no better option other than loan sharks (they still exist for those that even payday lender/auto title businesses won't serve). Walmart is a much better deal charging $3 to cash up to a $1000 check. The problem is they are primarily in areas not within walking distance and are restrictive as banks in what checks they cash. For example, an owner of a Hispanic check casher/payday loan location got started when he worked in a factory where he was the only one who spoke English. He began assisting his fellow Peruvian workers on payday by helping them get their checks cashed (translation services are not typically provided by Walmart), His first location was an empty store front that he paid $100 a month rent. As of 2015 he had 3 locations and was looking to open more.
The reality is people choose the best options available to them. Unfortunately, there is little help or financial assistance in this country for the people who need it the most. The work that Anonymous does is outstanding as so few do so. The solution is to provide better options and more Anonymous' for people in need.
However, let's not take away the bad options until we can provide better ones. Government can do a lot if it wishes to provide incentives (i.e: require banks to provide affordable service that don't gouge the poorest of us with exhorbitant fees) Unfortunately, in my career I never saw this happen.
They fill only a need of the owners to make obscene profits. The get around the usery laws by limiting the amount of the loans. Or by limiting the term of the loan.
Most immigrants are a cash only economy. All of my immigrant tenants pay cash and work on handshake deals.
I dont know of the $110 bounced check fees. The highest I can find in any of the banks that I deal with is $35 which I find outrageous.
Check cashing can be done at almost every supermarket for far less than the check cashing outfits.
The big bucks on bounce fees were about a month ago when BoA bounced me maybe three times for the same thing.
As to the general expertise on these outfits, I'll leave it to you two. I was flaming after hearing of the used car / title loan outfits but those aren't so much the same thing. When you're getting a title loan on your car, you're already in more trouble than you know and the chicanery of those outfits only makes it worse.
The $110 was multiple charges. The highest allowed check charge is $40 per item. The banks will pay the highest item presented in order to bounce e most number of items.
The title loan companies are the next step in the legal loan shark ladder. The Usery laws cap per annum interest rates but 24% on a two week loan turns in 600+% but still legal as the loan is really issued every two weeks. There is no defense for these companies.
Definitely multiple charges but it snowballed and I didn't realize it was even happening. That's my own fault for failing to check email but it can easily happen.
Usury is a squishy business and some say the church never permitted it and my understanding is moneylending is some kind of sin in Islam. Whatever the philosophy, 24% easily qualifies usurial, particularly when they justify it due to costs from giving out so many shabby cards which was their own crime.
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