Legal Question in Business Law in California

I currently run a business buying and selling used furniture in Orange County and would like to be able to offer financing to my customers. I order to do this, I have to use a 3rd party lender that requires 50% down on the loans with a 9 or 12 month financing on the remainder of the balance with a 19.9% interest. I would like to start a business that would fund the remainder of the loan and collect the payments and interest. Although the lender would be collecting the payments and interest, this money would be going to a business that essentially bought out the loan from the used furniture company. These loans would be purchased for 80% of the value to cover the risk. Is this legal? and if yes, do I need licensing?


Asked on 3/11/14, 7:10 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Who is going to be collecting the principal and interest? First you seem to say your proposed business would do the collecting, then you say "the lender would be collecting....." This is a bit confusing. Also, I wonder if you have read, or been told about, California law regarding lending institutions and usury.

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Answered on 3/11/14, 9:51 pm


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