Wells Fargo Facilitates Credit to National Payday Lender

Dollar Financial reports that it has secured a renewal on its current line of credit. In an announcement dated December 30th, Dollar (ticker: DLLR) said that the new line will afford it more flexibility and on favorable terms.

The $200 million line is offered by a syndicate and facilitated by Wells Fargo. The line can be used for Dollar’s worldwide program of short-term consumer loans (“payday loans”), gold-buying, check cashing, and pawn lending. There is also the possibility that Dollar will be able to tap an additional $50 million.

The extension renews a line originally opened in March 2011.

The term comes with an adjustable rate of interest at 400 basis points above one of two international short-term lending rates, or at 300 basis points above the prime rate set by the Federal Reserve.

The opportunity means that Wells will not be underdone in the payday space by Bank of America, who announced their own intent to continue to offer credit to Advance America (ticker: AEA) earlier in December.

Earlier this month, Dollar said that it would buy back a bit more than 10 percent of its outstanding shares. Those plans may hint at Dollar’s intent for the Wells money.