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Texas CSO Services
Texas Credit Services Organization

Services We Offer:

Consumer Loans

We and our partners offer loans that finance consumer purchases of recreational vehicles, boats, motorcycles, and trailers, and to finance small scale home improvements. Home improvement loans generally require a FICO score above 730, while other consumer loans may have slightly lower FICO scores.

Commercial Loans

Asset-based loans: Small businesses which require working capital credit facilities ranging from $500,000 to $9 million, averaging $1 million.

Secured Mezzanine Loans: We and our partners originate both senior and subordinated loans nationwide to businesses in a variety of industries, including manufacturing and various service providers. These mezzanine loans are primarily secured by a second position on all assets of the businesses and generally range in amount from $1 million to $5 million, and average $2 million.

Retail Trade Loans: These loans are usually personally guaranteed and come with an assignment of leases. They range from $100,000 to $8 million but average $200,000.

Consulting for Credit Services Organizations and Credit Access Businesses

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

Until last year, the CSO model was essentially unregulated. A law creating the Credit Access Business license also created a host of regulations that you MUST follow. The Texas Office of the Consumer Credit Commissioner has been on an audit rampage. Many small operators, by failing to follow even the tiniest of regulations, have been slapped with five-figure fines.

It is essential that you get all your ducks in a row before you open your doors.

We will carry though the entire process. We cost less and stay with you even after you begin making loans.

A) Full Consulting Package - $5,000
We guide you every step of the way through the process of forming and maintaining a Texas CSO-CAB, including: formation of corporate entity, Texas CSO and CAB formation, getting a bond, providing Lender-Customer and CSO-Lender Agreements; 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; $1000 the day you begin making loans. You may cancel at any time during the process.

B) Ad-Hoc Consulting - $300/hr. You may retain us on an-hoc basis to assist with any aspect of implementing the Texas CSO-CAB model. We bill in quarter-hour increments.

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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.

  1. You must be able to guarantee 100% of loaned principal in the form of a bank letter of credit or pledged liquid assets.
  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.

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

  1. You must be able to guarantee 100% of loaned principal in the form of a bank letter of credit or pledged liquid assets.
  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. A Finder's Fee ranging from $0.50 to $1.00 per hundred borrowed for 1 - 3 years. Generally, the more experience you have as a CSO and the larger your portfolio, the smaller the fee.

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Payday Loan, Auto Title Lender, and Buy Here Pay Here Dealer Capital

We can arrange financing for your payday loan or auto title lending business, or BHPH dealership.

As you know, credit is hard enough to come by, but credit for subprime businesses is nearly impossible to obtain. We have been operating in the sector for many years and have a solid reputation with the few private-equity sources that provide financing in the sector.


  1. Annualized EBITDA must exceed annualized debt service by 1.5x.
  2. Asset-to-Liability ratio must be at least 1:1
  3. Security will likely be a 1st position lien on company assets
  4. Owners must provide Personal Guaranty
  5. Monthly and Annual P&L and Cash Flow Statements for at least the past 24 months. (Externally audited preferred)
  6. Current Company Balance Sheet
  7. Debt detail:Secured or not, maturity, interest rate, debt service
  8. Personal Balance Sheet
  9. 24-month cash flow projection, in detail
  10. For BHPH dealers, a static loss pool analysis is REQUIRED.

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Broker the Sale of BHPH Notes

Our reputation makes the purchase of your BHPH paper smoother, faster, and may yield higher rates.

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Online Payday Lending

We can provide capital for your online payday loan business. Debt is rarely offered at less than 24% annually, and we often require large pieces of equity as well.

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Alternative Finance Products and Underlying Technology

We will consider just about any kind of alternative product in the finance space. Payday loan, installment loan, rent-to-own, pawn, online lending, debit or prepaid or gift cards - we are eager to hear about any product you have, especially if it includes proprietary technology.

We are not venture or angel capital and consequently we don't generally fund start-ups. We need proof of concept. Beyond that, if we like the product, we are very flexible in how we arrange a deal.

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Distressed Assets

We are very active in this space. If an asset is capable of cash flowing, then we'll be interested. This includes B and C tier multifamily residential real estate, injury settlement medical receivables, bad debt of just about any variety, BHPH note receivables, etc.

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Specialty Finance and Structured Finance

Our partners are extremely creative when putting deals together. No matter what kind of asset you are seeking a loan against, our partners will find a way to make a deal if the collateral is solid enough.

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For CSO operations that do not have 100% collateral coverage

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.