Suppose you wanted to loan people small amounts of money (~$100-$150) over a...

Methshot
Methshot

Suppose you wanted to loan people small amounts of money (~$100-$150) over a relatively short period of time (say, 2-3 months).

You don't have legal leverage of any sort.

What would you take from the borrower as collateral?

Snarelure
Snarelure

This is called a pawn shop.

SniperWish
SniperWish

@Methshot
Their prosthetic limb. I only lend to paraplegics.

TurtleCat
TurtleCat

@Methshot
@Snarelure

Note that these are relatively poor people who can't afford to hand over their valuables in case they default. If I took tons of their physical assets, it would be a hassle to get my money back (I also can't trust that I'll get fair valuations from pawn shops). Also, these borrowers would probably try to give me trash assets that depreciate in value, like clothes.

5 dollars in BTC to whoever has the most intelligent collateral scheme.

I've already considered:
amassing tons of physical assets (but this would be hard to liquidate)
social leverage (but this is useless when it comes to people with no shame)
nudes (but many people wouldn't mind having their nudes distributed in exchange for a 100 bucks)

New_Cliche
New_Cliche

@TurtleCat
Money

Stupidasole
Stupidasole

@New_Cliche
haha you're so funny

cum2soon
cum2soon

@Sir_Gallonhead
this is something

kizzmybutt
kizzmybutt

@Sir_Gallonhead
Top isn't collateral.

Gigastrength
Gigastrength

@TurtleCat
5 dollars in BTC to whoever has the most intelligent collateral scheme.
Make it $5 in paypal and you have a deal. I dont want bitcoin.

PackManBrainlure
PackManBrainlure

Anything that can be liquidated. Example, lend 80% value the NET proceeds after an ebay auction.

Flameblow
Flameblow

Time = money so I'd have them work a defined amount for me until I would offer a loan.
You thinking in the wrong direction nigga. Get dat collateral up front.

WebTool
WebTool

@TurtleCat

Stop trying to reinvent the wheel!

Pawn shops are already a thing. Follow that model but add value somehow, even if all that means is better rates.

Note that these are relatively poor people who can't afford to hand over their valuables in case they default

are you out of your fucking mind? You are supposed to take the items BEFORE you hand over the money and they have opportunity to default.

it would be a hassle to get my money back
Don't worry about getting your money back. There is a reason you only lend partial value of collateral.

(I also can't trust that I'll get fair valuations from pawn shops)

fair? valuation is set by the market

amassing tons of physical assets (but this would be hard to liquidate)

Not if you value them based on liquidation price.

The business model needs to be "Heads I win tails you lose".

Also, keep your $5. but post the nudes to Veeky Forums after all your "customers" default

Lord_Tryzalot
Lord_Tryzalot

@WebTool
Thanks senpai.

Quick question: how do I ensure that value doesn't depreciate by the time someone defaults? For example, a borrower gives me an XYZ brand watch. In 3 months, the borrower defaults, but XYZ products are now a fashion no-go and the pawn shop gives me 70% of what I originally wanted. If I lent 80% of the collateral's liquidation value, I would lose money in this situation.

girlDog
girlDog

@Lord_Tryzalot
You do not accept such trades. Simple as that. You need some insight, if you believe you are going to lose value then you either ask for more to be on the safe side, on not have a deal.

Illusionz
Illusionz

@Lord_Tryzalot
be there to make money, not help other people. this is business, not some sort of socialism

Dreamworx
Dreamworx

@SniperWish
"Costed an arm and a leg, it did."

CodeBuns
CodeBuns

I want to loan money to people so poor that they don't have collateral!

This is what loan sharks are for, you fucking twit.

Methnerd
Methnerd

@Methshot
@TurtleCat

Help! What do I take as collateral?!
What is a pawn shop?
No! I can't take collateral, the borrowers are too poor!

Then why the fuck do you think its a good idea to give them money in the first place.

Evilember
Evilember

@TurtleCat
Please stop trying to start a business. You may be retarded. Just stick to your labor job

whereismyname
whereismyname

@TurtleCat
note that these are relatively poor people who can't afford to hand over their valuables in case they default.
Then they can't afford to borrow money.

@TurtleCat
it would be a hassle to get my money back
No, because you also buy their shit at knock-down prices and sell it back to them later. And buy cheap shit to sell to them.

You're looking for a guide on how to be a loan shark, right?
Well, why don't you do it like loan sharks, and secure their debt on a baseball bat in your possession. They pay, or you use it on their kids.
Then the Mafia come and shoot you.

Raving_Cute
Raving_Cute

Not taking their children or parents as collateral.

Crazy_Nice
Crazy_Nice

His kneecaps usually.

RavySnake
RavySnake

@Lord_Tryzalot
OP what the hell is wrong with you, of course you shouldn't go to fucking pawn shops to liquidate stuff that someone pawned to you, jesus christ. Just open your own pawn shop or sell online. lmao

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