The majority of business owners in America, no matter what the market or industry, face at very least a small percentage of “uncertainty” in their future.  Of course, the most desirable business scenario would be that of minimal “risk” or uncertainty, but also that of the soonest return on investment and largest profit potential.  It’s simple business 101.  But some industries come upon sudden changes due to unforeseen circumstances and make best efforts to cope with an uncertain future, such as the payday lending industry and the subsequent legislative developments that oversee payday lending operations, which is why so many online lenders of payday loans are keeping a close eye on developing payday loan information and news.

The payday lending industry, which represents thousands of lenders across dozens of States, has been a thriving industry in America since the early 1990’s and has generally enjoyed an increase in total loans and total profits since then.   But these increasing figures alone could be quite deceiving, if used to determine the current climate of the payday lending industry.  In fact, despite these climbing figures in total loans and profits, the payday lending industry faces a rather unforeseen future due to ever changing State regulations.

Traditionally, the laws that govern “payday loans” are controlled at the State level and can set limits on APR’s, maximum finance charges, allowable “rollovers/extensions” of the loan and much more.  Over the past decade, many States have either banned the option of payday loans outright, or have set such meager limits to the finance charges allowed, that no lender could operate at a level that would allow a profit.  This means that even though the payday lending industry seems to have more and more customers, the “playing field” is quickly being eliminated and therefore leaving many lenders scrambling to secure the future of their business.

These changes to legislation affect small lenders differently than larger lending operations that are left with more money and expertise to deal successfully with changes to legislation or the complete elimination of lending in an entire State.  For example, a one-store operation that loses the ability to offer loans in their State will most likely close their doors.  But a lender that operates 50 stores and from a few online sites that offer loans to several States, will have more options available when new legislation takes effect.

In fact, it seems that many payday lenders are looking to future legislative changes and trends in order to positively and pro-actively shape the future of their lending business.   For example, direct and responsible online lender Cash USA has recently announced that they are considering making a change towards “affiliate” marketing, which provides less income that direct lending, but much less risk and absolutely no licensing.  Other lenders are looking at the possibility of offering “installment” loans, which are similar to a payday loan, but usually for a higher amount and a longer term (6 months average).

No one is sure where the future of payday lending is headed.  But as of now, no legislation has considered the existence of this consumer demand for these loans, nor has anyone attempted to offer a solution or offer a substitution for these short term payday loans.  Until then, businesses will surely keep their eyes to the news to ensure a successful future for their business.