By C.J. SULLIVAN and DOUGLAS MONTERO
Last updated: 8:00 am
October 13, 2008
Posted: 4:09 am
October 13, 2008
Benny the Loan Shark has something in common with banks - he's made loans to subprime borrowers in danger of defaulting.
But he's not likely to get taxpayer money to buy his nonperforming assets, so the low-level street lender is thinking of a radical change in the way he does business.
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"I'm not really worried about people borrowing money from me, what I worry a lot about is whether they'll pay it back," said the 40-year-old whose "office" is the streets of the Belmont section of The Bronx.
"I'm going to have to start collecting collateral - you know, like jewelry, wedding bands, necklaces and family heirlooms."
Benny, who makes loans of $100 to $200 and charges about $50 a week interest, predicts the downturn won't affect his customers for a week or two.
Those who do business with him don't have to worry about goons coming at them with baseball bats.
That's only for the big-time lenders, who make loans of $5,000 to $10,000, Benny said. They're currently dispatching gorillas to collect.
"They're getting hit hard," said Benny, who says he has spoken to "associates" who operate in Midtown and Wall Street.
"There are a lot of bankers and investment brokers who have gambling problems and cocaine addictions who lost their jobs."
Tanda, a 40-year-old mid-level loan shark who operates in upper Manhattan, said he lowered his interest rates by 50 percent during the spike in gas prices to drum up more customers. They're mostly small-store owners, cabdrivers and occasionally, drug dealers.
"They had hard times before, now they can't get anything from a bank. So I am it for them. Some people see an opportunity and kill them [charge more interest], so I decided to charge less. It gives me good word of mouth, and I get repeat business."
Tanda says he charges about $200 a week on a $500 loan and $400 a week on a $1,000 loan. His limit is $5,000.
"Wall Street should take a lesson from me, I never lend what I can't afford to lose - and I lose very little," he said.
The loan sharks can expect more and more customers, like Ramon, a middle-aged family man who runs a Washington Heights clothing store.
"I had no choice but to go to the street for money," he said.
"If I have a bad week, I still have to buy inventory and pay rent - and [the loan shark] is the one right now I can go to."
"It's easy, quick and safe, as long as you come up with the weekly charge," he said. "But I have no choice. To a bank, I don't exist."
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