RISK FACTORS

         An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this prospectus, before deciding whether to invest in our common stock. Any of the risks described below could result in a significant or material adverse effect on our business, results of operations and financial condition and a corresponding decline in the market price of our common stock. You could lose all or part of your investment. The risks described below are not the only ones we face. Additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business, results of operations and financial condition.

Risks Related to Our Business and Industry

We lack product and business diversification; as a result, our future revenues and earnings may be disproportionately negatively impacted by external factors and may be more susceptible to fluctuations than more diversified companies.

        Our only business activity is offering payday cash advance services. If we are unable to maintain and grow our payday cash advance services business, our future revenues and earnings could decline. Our lack of product and business diversification could inhibit our opportunities for growth, reduce our revenues and profits and make us more susceptible to earnings fluctuations than many of our competitors who are more diversified and provide other services such as check cashing, pawn lending, title lending, wire transfer services or other similar services. External factors, such as changes in laws and regulations, new entrants and enhanced competition, could also make it more difficult for us to operate as profitably as a more diversified company could operate. As a result, any internal or external change in the payday cash advance services industry could have a material adverse effect on our business, results of operations and financial condition.

The payday cash advance services industry is highly regulated under state law. Changes in state laws and regulations could have a material adverse effect on our business, results of operations and financial condition.

        Our business is regulated under numerous state laws and regulations, which are subject to change and which may impose significant costs or limitations on the way we conduct or expand our business. As of June 30, 2004, 37 states and the District of Columbia had specific laws that permitted payday cash advances or allowed a form of payday cash advances under small loan laws. As of June 30, 2004, we operated in 29 of these 37 states under the standard business model and in one of these 37 states under the agency business model. We do not conduct business in the remaining seven of these 37 states or in the District of Columbia because we do not believe it is as economically attractive to operate in these jurisdictions due to specific legislative restrictions such as interest rate ceilings, an unattractive population density or unattractive location characteristics. The remaining 13 of the 50 states did not have laws specifically authorizing the payday cash advance business. As of June 30, 2004, we operated in four of these 13 states under the agency business model, serving as processing, marketing and servicing agent through our payday cash advance centers for four lending banks that make payday cash advances to their customers in those states.

        The states with specific payday cash advance laws have laws that generally govern the terms of the transaction and require certain consumer protections. Typically, the state laws limit the principal amount of a payday cash advance and set maximum fees and interest rates that customers may be charged. Some state regulations also limit a customer's ability to renew a payday cash advance and require various disclosures to consumers. State statutes often specify minimum and maximum maturity dates for payday cash advances and, in some cases, specify mandatory cooling-off periods between transactions. Our collection activities regarding past due payday cash advances are subject to consumer protection laws and state regulations relating to debt collection practices. In addition, some states restrict payday cash advance advertising content.

        During the last few years, legislation has been adopted in some states that prohibits or severely restricts payday cash advance services. For example, in May 2004, a new law became effective in Georgia

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that prohibits payday cash advance services in the state and restricts our ability to act as processing, marketing and servicing agent for a lending bank in the state. As a result, we have suspended operations in Georgia except for collections of outstanding payday cash advances made prior to such suspension on behalf of BankWest, Inc., the lending bank for whom we acted as processing, marketing and servicing agent in that state. In addition, Maryland adopted a law in 2001 that purports to prohibit agency relationships between banks and processors, marketers and servicers of payday cash advances. Many bills to restrict or prohibit payday cash advances have also been introduced in state legislatures. In the first six months of 2004, such bills were introduced in Arizona, Georgia, Illinois, Iowa, Louisiana, Missouri, New Hampshire, Virginia, West Virginia and Wisconsin. In addition, Mississippi and Arizona have sunset provisions in their payday cash advance laws that require renewal of the laws by the state legislatures at periodic intervals. Future laws prohibiting payday cash advance services or making them unprofitable could be passed in any other state at any time or existing payday cash advance laws could expire or be amended, any of which would have a material adverse effect on our business, results of operations and financial condition.

        Statutes authorizing payday cash advance services typically provide state agencies that regulate banks and financial institutions with significant regulatory powers to administer and enforce the law. In most states, we are required to apply for a license, file periodic written reports regarding business operations, and undergo comprehensive state audits and examinations to ensure that we comply with applicable consumer protection and other laws. Under statutory authority, state regulators have broad discretionary power and may impose new licensing requirements, interpret or enforce existing regulatory requirements in different ways or issue new administrative rules, even if not contained in state statutes, that impact the way we do business. For example, in 2001, the Illinois Department of Financial Institutions promulgated a set of short-term lending rules that placed more severe restrictions on payday cash advance transactions than those contained in the Illinois statute under which the business was licensed and regulated. Although we were able to modify the terms of our payday cash advances and continue to operate in Illinois, we cannot assure you that similar actions in the future will not force us to terminate our operations in Illinois or in any other jurisdiction.

        In some cases, we may also rely on the interpretations of the staff of state regulatory bodies with respect to the laws and regulations of their respective jurisdictions. These staff interpretations generally cannot be relied upon as binding legal authority and may be subject to challenge in administrative or judicial proceedings. Additionally, as the staff of state regulatory bodies change, it is possible that their interpretations of applicable laws and regulations may also change and negatively affect our business.

        Additionally, state attorneys general, who monitor and protect the rights of consumers in the states, have begun to scrutinize the payday cash advance services industry. Some have taken legal action against providers as well as entities that act as processing, marketing and servicing agents for state chartered banks that make payday cash advances. It is possible that state attorneys general may take additional actions against the industry in the future, which could have a material adverse effect on our business, results of operations and financial condition.

        Legislative or regulatory action in the states in which we operate could cause us to cease or suspend our operations in a state. If we were to close our payday cash advance centers in a state, we would incur closing costs such as severance payments and lease termination payments and we would have to write off assets that we could no longer use. If we were to suspend rather than permanently cease our operations in a state, we may also have continuing costs associated with maintaining our payday cash advance centers and our employees in that state, with little or no offsetting revenues. For example, we have decided to continue to maintain our 89 payday cash advance centers in Georgia for the foreseeable future until certain litigation currently pending in Georgia is resolved. See "—Current and future litigation and regulatory actions regarding our business could have a material adverse effect on our business, results of operations and financial condition." From time to time, we may also choose to operate in a state even if legislation or regulations cause us to lose money on our operations in that state. The passage of a 2002 Indiana statute, for example, established a prohibitive rate structure for making payday cash advances in

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the state. Beginning on May 1, 2002, we provided payday cash advances in the state while experiencing a consistent loss in revenue until a new, less restrictive, law was passed in March 2004. Any of these actions or events could have a material adverse effect on our business, results of operations and financial condition.

The payday cash advance services industry is also regulated under federal law. Changes in federal laws and regulations could have a material adverse effect on our business, results of operations and financial condition.

        Although states provide the primary regulatory framework under which we offer payday cash advance services, certain federal laws also impact our business. For example, because our payday cash advances are viewed as extensions of credit, we must comply with the consumer disclosure requirements of the federal Truth-in-Lending Act and Regulation Z adopted under that Act. Additionally, the Equal Credit Opportunity Act prohibits discrimination on certain prohibited bases in connection with credit transactions. We use the Fair Debt Collection Practices Act as a model for collecting delinquent accounts. The Gramm-Leach-Bliley Act and its implementing federal regulations generally require us to protect the confidentiality of our customers' nonpublic personal information and to disclose to our customers our privacy policy and practices. Any failure to comply with any of these federal laws and regulations could have a material adverse effect on our business, results of operations and financial condition.

        We are also subject to supervision by other federal agencies, including the Federal Trade Commission, or the FTC. In December 2002, the FTC requested that certain payday cash advance providers, including us, respond to a series of questions and document requests concerning their operations. This review may result in recommendations regarding the payday cash advance services industry or specific conclusions about us, either of which may have a material adverse effect on our business, results of operations and financial condition. Future reviews by other federal agencies could also have a material adverse effect on our business, results of operations and financial condition.

        Additionally, since 1999, various anti-payday cash advance legislation has been introduced in the U.S. Congress, with recent legislation specifically targeting the agency relationships between banks and payday cash advance companies. Congressional members continue to receive pressure from consumer advocates and other industry opposition groups to adopt such legislation. Any federal legislative or regulatory action that restricts or prohibits payday cash advance services or our activities as processing, marketing and servicing agent for the lending banks could have a material adverse impact on our business, results of operations and financial condition.

The payday cash advance services industry is subject to various local rules and regulations. Changes in these local regulations could have a material adverse effect on our business, results of operations and financial condition.

        In addition to state and federal laws and regulations, our business is subject to various local rules and regulations such as local zoning regulations. These local rules and regulations are subject to change and vary widely from state to state and city to city. In 2004, for example, Columbia, South Carolina amended its Code of Ordinances to require that payday cash advance businesses obtain special use permits in order to conduct business in the city. Any actions taken in the future by local zoning boards or other governing bodies could have a material adverse effect on our business, results of operations and financial condition.

Our agency relationships with the lending banks are highly regulated and any changes in laws and regulations governing these relationships could have a material adverse effect on our business, results of operations and financial condition.

        As of June 30, 2004, we operated in five states under the agency business model, serving as processing, marketing and servicing agent through our payday cash advance centers for four lending banks that make payday cash advances to their customers in those states.

        Under federal banking law, a lending bank may "export" its lending interest rate on payday cash advances permitted by the state in which it is domiciled to consumers in other states and the state where the consumer is located cannot impose its usury law limitations on those payday cash advances. This

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"export" lending law allows the lending banks for whom we act as processing, marketing and servicing agent to export their domiciliary states' interest rates into the states in which we act as their agent. As of June 30, 2004, pursuant to our processing, marketing and servicing agreements with the lending banks, we are an agent for payday cash advances offered, made and funded by BankWest, a South Dakota bank, in Pennsylvania, First Fidelity Bank, a South Dakota bank, in Michigan, Republic Bank & Trust Company, a Kentucky bank, in North Carolina and Texas and Venture Bank, a Washington bank, in Arkansas. We also processed, marketed and serviced payday cash advances for BankWest in Georgia, but recently suspended operations in that state except for collections of outstanding payday cash advances made prior to such suspension. Currently, only state chartered banks can be lending banks for payday cash advances, because the federal regulators for national banks and federal savings associations have effectively prohibited such banks and associations from participating in the payday cash advance services industry with agents.

        The four lending banks for whom we currently act as processing, marketing and servicing agent are subject to federal and state banking regulations. As FDIC insured, state-chartered banks, the lending banks are subject to supervision by the FDIC. Additionally, the lending banks are subject to regular examination by other state and federal regulatory authorities. Because of our contractual relationships with the lending banks, our own activities regarding the lending banks' payday cash advances are also subject to examination by the FDIC and these other regulatory authorities. To the extent an examination involves a review of the lending banks' payday cash advances and related processes, a regulatory authority may require us to provide information, grant access to our payday cash advance centers, personnel and records and alter our business practices or prevent the lending banks from providing payday cash advances using agents such as us. Any of these actions could have a material adverse impact on our business, results of operations and financial condition.

        In July 2003, the FDIC issued guidelines governing permissible agency arrangements between state chartered banks and processing, marketing and servicing agents of the banks' payday cash advances, such as us. These guidelines address prudent risk-management practices regarding processing, marketing and servicing arrangements, capital requirements, allowances for loan losses and loan classifications, income recognition, collection recovery practices and compliance with consumer protection laws. If the FDIC's implementation of these guidelines or the promulgation of any additional guidelines were to ultimately restrict the ability of all or certain state chartered banks (including the lending banks for whom we act as processing, marketing and servicing agent) to maintain relationships with payday cash advance processors, marketers and servicers (such as us), it would have a material adverse impact on our business, results of operations and financial condition. In addition, if state banking regulators were to take action to restrict the ability of all or certain state chartered banks, including the lending banks for whom we act as processing, marketing and servicing agent, to provide payday cash advances, our distribution opportunities in those states where we operate as an agent for a lending bank would be limited. This could have a material adverse impact on our business, results of operations and financial condition.

        Federal regulators have increasingly scrutinized agency relationships between banks and payday cash advance companies. During 2002 and 2003, for example, the Office of the Comptroller of the Currency (OCC), which supervises national banks, took actions to effectively prohibit certain national banks from offering and making small-denomination, short-term consumer loans, including payday cash advances, through the use of agents such as ourselves. After a notice of charges was issued in 2002 against Peoples National Bank, one of the lending banks whose payday cash advances we processed, marketed and serviced, we entered into a consent agreement with the OCC to terminate our agency relationships with that bank. Future actions against the lending banks whose payday cash advances we process, market and service could result in a significant interruption or curtailment of our business. Any such business disruption or curtailment would have a material adverse effect on our business, results of operations and financial condition.

        Lending banks for whom we act as processing, marketing and servicing agent may also have agency relationships with other processors, marketers and servicers of payday cash advances. Actions taken by

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these other processors, marketers and servicers of payday cash advances, over which we have no control, could cause a lending bank to lose its ability to make payday cash advances through an agent such as us, or could cause a lending bank to choose to terminate its relationship with us. Any such event could also have a material adverse effect on our business, results of operations and financial condition.

Our relationships with the lending banks under the agency business model are based on commercial relationships, key personnel and internal bank policies. These relationships with the lending banks can be terminated at any time resulting in a material adverse effect on our business, results of operations and financial condition.

        As of June 30, 2004, we were party to agreements with four of the 11 FDIC insured, state-chartered banks that we believe were then offering payday cash advances in the United States. Our processing, marketing and servicing agreements with these four lending banks have largely been the result of the relationships that have developed between bank personnel and key members of our management team. If the key members of our management team, who negotiate and maintain these relationships, are no longer employed by us, these relationships could be adversely affected and the lending banks could terminate or choose not to renew our processing, marketing and servicing agreements. We cannot assure you that we would be able to enter into new bank agency relationships on terms as favorable as our current relationships if these agreements were terminated or not renewed. In addition, other factors, such as federal regulatory examinations and guidelines and changes in lending bank policies and strategies, could lead to the termination of these contractual relationships. The termination or non-renewal of our processing, marketing and servicing agreements with lending banks could have a material adverse effect on our business, results of operations and financial condition.

If we are no longer able to process, market and service payday cash advances made and funded by the lending banks, our business, results of operations and financial condition could be materially adversely affected.

        Revenues derived from processing, marketing and servicing payday cash advances made and funded by the lending banks under the agency business model accounted for 27.5% of our net revenues in the six months ended June 30, 2004 and 29.9% of our net revenues in the year ended December 31, 2003. If, as a result of changes in laws or regulations or otherwise, we could no longer process, market and service payday cash advances made and funded by the lending banks in one or more of our present or future markets, our business, results of operations and financial condition could be materially adversely affected.

Current and future litigation and regulatory proceedings against us could have a material adverse effect on our business, results of operations and financial condition.

        Our business is subject to lawsuits and regulatory proceedings that could generate adverse publicity and cause us to incur substantial expenditures. For example, processing, marketing and servicing payday cash advances as agent of a lending bank, such as what we do under the agency business model, has come under increasing legal and regulatory scrutiny at both the state and federal levels. The opposing parties in many of these lawsuits and proceedings maintain that payday cash advance companies, such as us, that process, market and service payday cash advances made by a lending bank should be regarded as the "true lenders" due to the agent services they provide and their participation and/or economic interests in the payday cash advances. Many of these opposing parties argue that payday cash advances made by banks using non-bank agents should be governed by the laws of the respective states in which the borrowers reside ( i.e. , they argue that there should be no "exporting" of interest rates). If payday cash advance companies, such as us, were held to be the lenders in any of these lawsuits, the fees and/or interest charged would violate most of the applicable states' usury laws, which impose maximum rates of interest or finance charges that a non-bank lender may charge. If any state or federal court were to conclude that the agency business model violated the applicable states' usury laws, the decision could have a material adverse effect on our business, results of operation and financial condition.

        We are involved in many active lawsuits, including lawsuits arising out of actions taken by state regulatory authorities. For example, in July 2002, the Industrial Loan Commissioner for Georgia issued an

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examination certificate to us seeking to investigate whether we had complied with the Georgia Industrial Loan Act. On August 2, 2002, we and BankWest, the lending bank for whom we acted as processing, marketing and servicing agent in Georgia, filed suit against the Commissioner in the Superior Court for Fulton County, Georgia seeking to enjoin him from enforcing the examination certificate. Later, the Commissioner served BankWest and us with administrative subpoenas seeking the production of loan documents, customer information and contractual and financial documentation relating to us regarding BankWest's payday advance program in Georgia. In our lawsuit against the Commissioner we are seeking a declaration that we, as BankWest's agent, BankWest and BankWest's payday cash advances in Georgia are exempt from the Georgia Industrial Loan Act and therefore, the Commissioner should be enjoined from enforcing the examination certificate and administrative subpoenas. The Superior Court issued an order granting a motion for summary judgment made by the Commissioner and denying our motion for summary judgment. This order has been appealed to and affirmed by the Georgia Court of Appeals. We have filed a Petition for Certiorari to the Georgia Supreme Court, which is pending. If the final ruling in this case is adverse to us it could have a material adverse effect on our business, results of operation and financial condition.

        In the Spring of 2004, Georgia adopted a statute that prohibits payday cash advance services in the state and restricts our ability to act as processing, marketing and servicing agent for a lending bank under the agency business model in the state, which statute became effective in May 2004. On April 9, 2004, we, along with BankWest and other banks and agents involved in providing payday cash advances in Georgia, filed an action in the U.S. District Court for the Northern District of Georgia against the Attorney General of Georgia and the Georgia Secretary of State seeking declaratory and injunctive relief. The relief sought is a declaration from the District Court that the recently passed Georgia anti-payday cash advance law is unconstitutional, is preempted by federal law and should not be enforceable against BankWest or us. After hearing oral arguments on our motion for injunctive relief, the District Court issued a temporary restraining order preventing the Georgia law from taking effect until May 15, 2004. Subsequently, on May 13, 2004, the District Court issued an order denying our motion for an injunction but extending the temporary restraining order until May 25, 2004. On May 25, 2004, upon expiration of the temporary restraining order, the Georgia law took effect. We have appealed the District Court's order to the U.S. Court of Appeals for the Eleventh Circuit and have submitted briefs to the Court of Appeals. On July 21, 2004, the Court of Appeals heard oral arguments on the appeal, and we are awaiting the decision of the Court of Appeals. We cannot predict when the Court of Appeals will issue a decision on our appeal. If we are unsuccessful in prosecuting this action, we may have to permanently cease all business operations in Georgia, which are currently suspended except for collections of outstanding payday cash advances made prior to such suspension on behalf of BankWest in that state. An adverse ruling could have a material adverse effect on our business, results of operations and financial condition.

        On March 10, 2003, Angela Glasscock, a customer of BankWest, the lending bank for whom we processed, marketed and serviced payday cash advances in Georgia, filed an adversary proceeding in the U.S. Bankruptcy Court for the Southern District of Georgia alleging that our subsidiary in Georgia was making payday cash advances in Georgia in violation of the Georgia Industrial Loan Act. The case is currently pending and awaiting a trial date. Although the amount in controversy in the case is only $350, the underlying claims of Ms. Glasscock, if agreed with by the Bankruptcy Court, could serve as a basis for future claims against us in Georgia, which could have a material adverse effect on our business, results of operations and financial condition.

        On August 6, 2004 Tahisha King and James E. Strong, who are customers of BankWest, the lending bank for whom we processed, marketed and serviced payday cash advances in Georgia, filed a putative class action lawsuit in the State Court of Cobb County, Georgia against us, our subsidiary in Georgia, William M. Webster, IV and several of our unnamed officers, directors, owners and "stakeholders", alleging many different causes of action, most notably that we have been making illegal payday loans in Georgia in violation of Georgia's usury law, the Georgia Industrial Loan Act and Georgia's Racketeer Influenced and Corrupt Organizations Act. The complaint states that BankWest is not the "true lender" on

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the loans. The complaint seeks compensatory damages, attorneys' fees, punitive damages and the trebling of any compensatory damages. An adverse ruling in this case could have a material adverse effect on our business, results of operations and financial condition.

        On July 27, 2004, John Kucan, Welsie Torrence and Terry Coates, who are all customers of Republic Bank & Trust Company, the lending bank for whom we process, market and service payday cash advances in North Carolina, filed a putative class action lawsuit in the General Court of the Superior Court Division for New Hanover County, North Carolina against us, our subsidiary that operates in North Carolina and William M. Webster, IV, our Chief Executive Officer, alleging that our subsidiary that operates in North Carolina was the "true lender" on the plaintiffs' payday cash advances and therefore the payday cash advances were made, administered and collected in violation of numerous North Carolina consumer protection laws. The lawsuit alleges that the relationship between our subsidiary that operates in North Carolina and Republic Bank & Trust Company is a "rent a charter" relationship and therefore the bank is not the "true lender" on the payday cash advances. The lawsuit seeks an injunction barring us from continuing to do business in North Carolina, the return of the principal amount of the payday cash advances made to the plaintiff class since August 2001, the return of any interest or fees associated with such advances, treble damages and other unspecified costs. If an adverse ruling is entered against us in this case it could have a material adverse effect on our business, results of operations and financial condition.

        On December 10, 2003, we received a letter from the Attorney General of West Virginia raising concerns that some of our collection practices may violate the West Virginia Consumer Credit and Protection Act. Although we do not currently have operations in West Virginia, some West Virginia residents visit our payday cash advance centers in states bordering West Virginia in order to obtain payday cash advances. Since receiving the Attorney General's letter we have discontinued collection visits in West Virginia and pursue our collections there through phone calls and letters to customers. If we cannot collect our payday cash advances from residents of states where we do not conduct operations, our business, results of operations and financial condition could be materially adversely affected.

        We are a defendant in a putative class-action lawsuit commenced by two of our former customers, Wendy Betts and Donna Reuter, in Florida. The action was filed in February 2001 in the Circuit Court of Palm Beach against our subsidiary, McKenzie Check Advance of Florida, LLC and certain other parties. The lawsuit alleges that we engaged in unfair and deceptive trade practices and violated the Florida criminal usury statute, the Florida Consumer Finance Act, and Florida's Racketeer Influenced and Corrupt Organizations Act. We successfully moved to have Ms. Reuter's case sent to arbitration and were awarded summary judgment as to Ms. Betts' claims. The order in Ms. Reuter's case is currently on appeal to the Florida Supreme Court and the order in Ms. Betts' case was reversed on August 11, 2004 by Florida's Fourth District Court of Appeals. While we plan to appeal the Fourth District Court of Appeals' ruling, we cannot assure you that we will prevail in this case. The suit seeks unspecified damages, and we could be required to refund fees and/or interest collected, refund the principal amount of payday cash advances, pay multiple damages and pay other monetary penalties. An adverse ruling in this case could have a material adverse effect on our business, results of operations and financial condition.

        We are a defendant in a lawsuit brought on behalf of a putative class of persons by a former customer, Lois Bennett, in Tennessee. Ms. Bennett on behalf of herself and others alleges that our subsidiary, McKenzie Check Advance LLC, violated the terms of a class action settlement order by wrongfully collecting fees and advances from the class members during a period of time when collections were allegedly prohibited. After a hearing, a trial judge ruled in our favor. However, on appeal, the Tennessee Court of Appeals reversed the findings of the trial judge and remanded the case for further findings of fact. The suit seeks unspecified damages, and we could be required to refund fees and advances collected and to pay other monetary penalties. An adverse ruling in this case could have a material adverse effect on our business, results of operations and financial condition.

        We are also involved in other litigation and administrative proceedings. This litigation includes employee claims for workers' compensation, wrongful termination, harassment, discrimination, payment of

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wages due and customer claims relating to collection practices and violations of state and/or federal consumer protection laws. We are likely to be subject to further litigation and proceedings in the future. The consequences of an adverse ruling in any current or future litigation or proceeding may include our obligation to refund fees and/or interest collected on payday cash advances, to refund the principal amount of payday cash advances, to pay treble or other multiple damages and to pay monetary penalties. We may also be subject to adverse publicity. Defense of any lawsuits or proceedings, even if successful, would require substantial time and attention of our senior officers and other management personnel that would otherwise be spent on other aspects of our business and would require the expenditure of significant amounts for legal fees and other related costs. Any of these events could have a material adverse effect on our business, results of operations and financial condition.

Competition in the retail financial services industry could cause us to lose market share, thereby materially adversely affecting our business, results of operations and financial condition.

        The industry in which we operate has low barriers to entry and is highly fragmented and very competitive. We believe that the market may become even more competitive as the industry grows and/or consolidates. We compete with services provided by traditional financial institutions, such as overdraft protection, and with other payday cash advance providers, small loan providers, short-term consumer lenders, and other financial service entities and other retail businesses that offer consumer loans or other products and services that are similar to ours. We also compete with companies offering payday cash advances and short-term loans over the internet as well as by phone. Some of these competitors have larger local or regional customer bases, more locations and substantially greater financial, marketing and other resources than we have. As a result of this increasing competition, we could lose market share, thereby materially adversely affecting our business, results of operations and financial condition.

        In Texas, Republic Bank & Trust Company, the lending bank for whom we act as processing, marketing and servicing agent, also has a payday cash advance processing, marketing and servicing agency relationship with one of our competitors, ACE Cash Express, Inc., who has operated in Texas longer than we have and has more payday cash advance centers in Texas than we do. Because FDIC guidelines provide that a lending bank may only have one outstanding payday cash advance with an individual at a time, even if different agents are involved, we often must turn away potential customers who already have an outstanding payday cash advance that is provided by Republic Bank & Trust Company and is processed, marketed and serviced by ACE Cash Express, Inc. Our inability to expand our business in Texas or to compete effectively there could have a material adverse effect on our business, results of operations and financial condition.

General economic conditions in the markets in which we operate could affect the demand for payday cash advance services and the collectibility of payday cash advances, and accordingly, our business, results of operations and financial condition could be materially adversely affected by changes in the economies of the markets in which we operate.

        Changes in economic factors in the markets in which we operate that reduce the level of demand for payday cash advance services could have a material adverse effect on our business, results of operations and financial condition. In addition, changes in economic factors in the markets in which we operate that decrease the collectibility of payday cash advances could have a material adverse effect on our business, results of operations and financial condition.

The concentration of our business in certain states could adversely affect us.

        In the six months ended June 30, 2004, our five largest states (measured by revenues) accounted for approximately 42% of our total revenues, with California, our largest state (measured by revenues), representing approximately 12% of our total revenues. Our business is and will likely continue to be highly concentrated within certain states. As a result, our business relies strongly upon the prevailing economic, demographic, regulatory, competitive and other conditions within each state in which our operations are

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concentrated, and changes in these conditions could have a material adverse impact on our business, results of operations and financial condition.

Media reports and public perception of payday cash advances as being predatory or abusive could materially adversely affect our business, results of operations and financial condition.

        Over the past few years, consumer advocacy groups and certain media reports have advocated governmental and regulatory action to prohibit or severely restrict payday cash advances. The consumer groups and media reports typically focus on the cost to a consumer for a payday cash advance. The consumer groups and media reports typically characterize these payday cash advances as predatory or abusive toward consumers. If this negative characterization of payday cash advances becomes widely accepted by consumers, demand for payday cash advance services could significantly decrease, which could materially adversely affect our business, results of operations and financial condition. Negative perception of payday cash advances or other activities could also result in increased regulatory scrutiny and increased litigation. Additionally, negative perception of payday cash advances could encourage restrictive local zoning rules and make it more difficult to obtain government approvals necessary to open new payday cash advance centers. These trends could materially adversely affect our business, results of operations and financial condition.

If the lending banks' payday cash advance approval processes are flawed and more payday cash advances go uncollected, our business, results of operations and financial condition could be materially adversely affected.

        Our agreements with lending banks provide for us to process, market and service the lending banks' payday cash advances. The banks are responsible for evaluating each of their customers' applications and determining whether the payday cash advance is approved. We are not involved in the lending banks' payday cash advance approval process, are not involved in determining the approval procedures or criteria of the lending banks and do not fund or acquire any payday cash advances from the lending banks. Consequently, the lending banks' payday cash advances are not included in our payday cash advance portfolio nor are they reflected on our balance sheet within our advances and fees receivable, net. Under our processing, marketing and servicing agreements with the lending banks, the lending banks are only contractually obligated for the losses on payday cash advances in an amount established as a percentage of the fees and/or interest charged by the banks to their customers on their payday cash advances. Depending upon the lending bank, this percentage ranges from 8.0% to 20.0%. As a result, if a lending bank's payday cash advances are not collected, we could be obligated to pay the lending bank the outstanding amount of the advances plus its fees and/or interest receivable on the advances, less its contractually obligated portion of the losses. As of June 30, 2004, this aggregate contingent liability amounted to $51.2 million and was not included on our balance sheet. See "—If our estimates of payday cash advance losses are not adequate to absorb losses, our business, results of operations and financial condition could be materially adversely affected." If the banks' payday cash advance approval processes are flawed and the number of uncollected payday cash advances increases, our business, results of operations and financial condition may be materially adversely affected.

Customers' personal checks are often returned unpaid due to non-sufficient funds in the customers' accounts or other reasons.

        In the year ended December 31, 2003, we deposited approximately 4.4% of all the customer checks we received and approximately 79% of these deposited customer checks were returned unpaid because of non-sufficient funds in the customers' bank accounts or because of closed accounts or stop-payment orders. If we are unable to collect amounts due to us and to the lending banks from customers, it could have a material adverse effect on our business, results of operations and financial condition.

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We are subject to credit risk as a result of our arrangements with lending banks. The lending banks' failure to honor their obligations to us could have a material adverse effect on our business, results of operations and financial conditions.

        Under the agency business model, all charges of fees and/or interest paid by a lending bank's customers are deposited directly to the lending bank's bank account. We invoice the lending bank for the processing, marketing and servicing fees payable to us by such bank. In addition, each lending bank is responsible for making payments to us if actual payday cash advances losses are less than the bank's contractually obligated portion of the losses. We are subject to the risk that the lending banks may fail to pay all or a portion of the amounts due to us or that they fail to pay us on a timely basis. Any such failure could have a material adverse effect on our business, results of operations and financial condition.

If our estimates of payday cash advance losses are not adequate to absorb losses, our business, results of operations and financial condition could be materially adversely affected.

        We maintain an allowance for doubtful accounts for estimated losses for payday cash advances we make directly to consumers under the standard business model and an accrual for excess bank losses for our share of losses on payday cash advances we process, market and service for lending banks under the agency business model. To estimate the appropriate allowance for doubtful accounts and accrual for excess bank losses, we consider the amount of outstanding payday cash advances owed to us, the amount of payday cash advances owed to the lending banks and serviced by us, historical payday cash advances we have charged off, our current collection patterns and the current economic trends in the markets we serve. As of June 30, 2004, our allowance for doubtful accounts was $24.9 million and our accrual for excess bank losses was $4.0 million. These amounts, however, are estimates, and if our actual payday cash advance losses are materially greater than our allowance for doubtful accounts or if the actual losses on the advances made by the lending banks are materially greater than our accrual for excess bank losses, our business, results of operations and financial condition could be materially adversely affected.

        With respect to the payday cash advances that we process, market and service for the lending banks, the lending banks are only contractually obligated for the losses on payday cash advances in an amount established as a percentage of the fees and/or interest charged by the banks to their customers on their payday cash advances. Depending upon the lending bank, this percentage ranges from 8.0% to 20.0%. As a result, if a lending bank's payday cash advances are not collected, we could be obligated to pay the lending bank the outstanding amount of the advances plus its fees and/or interest receivable on the advances, less its contractually obligated portion of the losses. As of June 30, 2004, this aggregate contingent liability was $51.2 million and was not included on our balance sheet. We could also be obligated to pay this amount to the lending banks if, as a result of a change in law or regulation or otherwise, the lending banks' payday cash advances were to become uncollectible. The accrual for excess bank losses that was reported in our accrued liabilities in our balance sheet was $4.0 million as of June 30, 2004. Our accrual for excess bank losses is, however, an estimate. If actual payday cash advance losses are materially greater than our recorded accrual for excess bank losses, our business, results of operations and financial condition could be materially adversely affected.

Our ability to manage our growth may deteriorate, which could have a material adverse effect on our business, results of operations and financial condition.

        We have experienced substantial growth in recent years. Our failure or inability to implement and manage our growth successfully in the future may have a material adverse effect on our business, results of operations and financial condition. Our growth strategy, which is based on rapidly opening a large number of payday cash advance centers in existing and new markets, is subject to significant risks. We cannot assure you that we will be able to expand our market presence in our current markets or successfully enter new markets through the opening of new payday cash advance centers or acquisitions. Moreover, the start-up costs and the losses from initial operations attributable to each newly opened payday cash advance center place demands upon our liquidity and cash flow, and we cannot assure you that we will be able to satisfy these demands. Because of this, the opening of additional payday cash advance centers, individually or in the aggregate, may have a material adverse effect on our business, results of operations and financial condition.

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        Our ability to execute our growth strategy will depend on a number of factors, some of which may be beyond our control, including:

•

the prevailing laws and regulatory environment of each state in which we operate or seek to operate, which are subject to change at any time;



•

our ability to obtain and maintain regulatory approvals or any government permits and licenses that may be required;



•

the degree of competition in new markets and its effect on our ability to attract new customers;



•

our ability to compete for expansion opportunities, including suitable locations;



•

our ability to recruit, train and retain additional qualified personnel;



•

our ability to adapt our infrastructure and systems to accommodate growth; and



•

our ability to obtain adequate financing for expansion plans.

        We cannot assure you that our systems, procedures, controls and existing space will be adequate to support expansion of our operations. Our growth has placed significant demands on all aspects of our business, including our administrative, technical and financial personnel and systems. Additional expansion may further strain our management, financial and other resources. Our future results of operations will substantially depend on the ability of our officers and key employees to manage changing business conditions and to implement and improve our technical, administrative, financial control and reporting systems. In addition, we cannot assure you that we will be able to implement our business strategy profitably in geographic areas we do not currently serve.

We have substantial existing debt and may incur additional debt, which could adversely affect our business, results of operations and financial condition by limiting our ability to obtain financing in the future and react to changes in our business.

        We have, and will continue to have, a significant amount of debt and may incur additional debt in the future. As of [                ], 2004, after giving effect to the application of our net proceeds from this offering, our total debt would have been approximately $ [    ] million and our stockholders' equity would have been approximately $ [    ] million. Our significant amount of debt could have important consequences to our business. For example, it could:

•

restrict our operational flexibility through restrictive covenants that will limit our ability to make acquisitions, explore certain business opportunities, dispose of assets and take other actions;



•

limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;



•

limit our ability to borrow additional funds in the future, if we need them, due to applicable financial and restrictive covenants in our debt instruments;



•

make us vulnerable to interest rate increases, because a portion of our borrowings is, and will continue to be, at variable rates of interest;



•

require us to dedicate a substantial portion of our cash flow from operations to payments on our debt obligations, which will reduce our funds available for working capital, capital expenditures and other general corporate expenses; and



•

place us at a disadvantage compared to our competitors that have proportionately less debt.

        The terms of our debt limit our ability to incur additional debt but do not prohibit us from incurring additional debt. If current debt levels increase, the related risks that we now face will also increase.

        If we fail to generate sufficient cash flow from future operations to meet our debt service obligations, we may need to seek refinancing of all or a portion of our indebtedness or obtain additional financing in order to meet our obligations with respect to our indebtedness. We cannot assure you that we will be able to refinance any of our indebtedness or obtain additional financing on satisfactory terms or at all,

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particularly because of our high levels of debt and the debt incurrence restrictions imposed by the terms of our debt.

We depend on loans from banks to operate our business. If banks decide to stop making loans to companies in the payday cash advance services industry, it could have a material adverse affect on our business, results of operations and financial condition.

        We depend on borrowings under our credit facility to fund payday cash advances, capital expenditures to build new centers and other needs. Recently, a major regional bank revised its credit policies to prohibit future loans to companies engaged in the payday cash advance services industry. If our current or potential credit banks decided not to lend money to companies in the payday cash advance services industry, we could face higher borrowing costs, limitations on our ability to grow our business as well as possible cash shortages, any of which could have a material adverse effect on our business, results of operations and financial condition.

Our credit facility contains restrictions and limitations that could significantly affect our ability to operate our business.

        Our credit facility contains a number of significant covenants that could adversely affect our business. These covenants restrict our ability, and the ability of our subsidiaries to, among other things:

•

incur additional debt;



•

create liens;



•

effect mergers or consolidations;



•

make investments, acquisitions or dispositions;



•

pay dividends or make other payments;



•

enter into certain sale and leaseback transactions;



•

become subject to further restrictions on the creation of liens;



•

have foreign subsidiaries; and



•

issue our stock in an initial public offering unless we receive enough net proceeds to prepay our subordinated debt.

        The breach of any covenants or obligation in our credit facility will result in a default. If there is an event of default under our credit facility, the lenders under the credit facility could cause all amounts outstanding thereunder to be due and payable, subject to applicable grace periods. This could trigger cross-defaults under our other existing or future debt instruments. As a result, our ability to respond to changing business and economic conditions and to secure additional financing, if needed, may be significantly restricted, and we may be prevented from engaging in transactions that might further our growth strategy. If we are unable to repay, refinance or restructure our indebtedness under our credit facility, the lenders under that facility could proceed against the collateral securing that indebtedness. Our obligations under the credit facility are guaranteed by each of our existing and future subsidiaries. The borrowings under the credit facility and the subsidiary guarantees are secured by substantially all of our assets and the assets of the subsidiary guarantors. In addition, borrowings under the credit facility are secured by a pledge of substantially all of the capital stock, or similar equity interests, of the subsidiary guarantors. In the event of our insolvency, liquidation, dissolution or reorganization, the lenders under our credit facility and any other existing or future debt of ours would be entitled to payment in full from our assets before distributions, if any, were made to our stockholders.

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We are a holding company with no operations of our own and we depend on our subsidiaries for cash. If our subsidiaries do not generate a sufficient amount of cash that they can provide to us, our liquidity and ability to service our indebtedness, fund our operations or pay dividends on our common stock would be harmed, any of which could have a material adverse effect on our business, results of operations and financial condition.

        We have no operations of our own and derive substantially all of our cash flow and liquidity from our subsidiaries and from our borrowings. We have substantial contractual commitments and debt service obligations. We depend on distributions from our subsidiaries and borrowings to meet our contractual commitments and debt service obligations and to pay dividends on our common stock. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us to enable us to meet our contractual commitments, to pay our indebtedness, to pay dividends on our common stock or to fund our other liquidity needs. Certain states require us to maintain some minimum net worth or liquidity based on the number of payday cash advance centers we operate in the state and other factors. These requirements may restrict our subsidiaries' ability to pay dividends or make other distributions to us. In order to comply with these requirements, we were required to maintain cash and cash equivalents at our subsidiaries in an aggregate amount of $10.2 million as of December 31, 2003 and $8.9 million as of June 30, 2004. In addition, if we undertake additional expansion efforts in the future, our cash requirements may increase significantly. Because of this, we may not have enough cash flow to meet our future liquidity needs, which may have a material adverse effect on our business, results of operations and financial condition.

Our business is seasonal in nature, which causes our revenues, collection rates and earnings to fluctuate. These fluctuations could have a material adverse effect on our stock price, business, results of operations and financial condition.

        Our business is seasonal due to the impact of fluctuating demand for payday cash advances and fluctuating collection rates throughout the year. Demand has historically been highest in the third and fourth quarters of each year, corresponding to the back-to-school and holiday seasons, and lowest in the first quarter of each year, corresponding to our customers' receipt of income tax refunds. Our provision for doubtful accounts and agency bank losses, allowance for doubtful accounts and accrual for excess bank losses are historically lowest as a percentage of revenues in the first quarter of each year, corresponding to our customers' receipt of income tax refunds, and increase as a percentage of revenues for the remainder of each year. This seasonality requires us to manage our cash flows over the course of the year. If our revenues or collections were to fall substantially below what we would normally expect during certain periods, our ability to service our debt, pay dividends on our common stock and meet our other liquidity requirements may be adversely affected, which could have a material adverse effect on our business, results of operations and financial condition.

        In addition, our quarterly results have fluctuated in the past and are likely to continue to fluctuate in the future because of these seasonal fluctuations. If they do so, our quarterly revenues and results of operations may be difficult to forecast. This difficulty in forecasting could cause our future quarterly results of operations to not meet the expectations of securities analysts or investors. Our failure to meet quarterly expectations could cause a material drop in the market price of our common stock.

Because we maintain a significant supply of cash in our payday cash advance centers, we may be subject to cash shortages due to employee and third-party theft and errors. We also may be subject to liability as a result of crimes at our centers.

        Since our business requires us to maintain a significant supply of cash in each of our payday cash advance centers, we are subject to the risk of cash shortages resulting from employee and third-party theft and errors. Although we have implemented various programs to reduce these risks, maintain insurance coverage for theft and provide security for our employees and facilities, we cannot assure you that employee and third-party theft and errors will not occur. Cash shortages from employee and third-party theft and errors were approximately $600,000 (0.3% of revenues) in the six months ended June 30, 2004, $1.7 million (0.4% of revenues) in 2003 and $2.2 million (0.6% of revenues) in 2002. Theft and errors

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could lead to cash shortages and could adversely affect our business, results of operations and financial condition. It is also possible that crimes such as armed robberies may be committed at our payday cash advance centers. We could experience liability or adverse publicity arising out of such crimes. For example, we may be liable if an employee, customer or bystander suffers bodily injury, emotional distress or death. Any such event may have a material adverse effect on our business, results of operations and financial condition.

Any disruption in the availability of our information systems could adversely affect operations at our payday cash advance centers.

        We rely upon our information systems to manage and operate our payday cash advance centers and business. Each payday cash advance center is part of an information network that is designed to permit us to maintain adequate cash inventory, reconcile cash balances on a daily basis and report revenues and expenses to our headquarters. Our back-up systems and security measures could fail to prevent a disruption in our information systems. Any disruption in our information systems could adversely affect our business, results of operations and financial condition.

Being a public company will increase our financial reporting costs because we will need to comply with various rules and standards established by various regulatory bodies, including the Public Company Accounting Oversight Board. Failure to comply with certain standards has resulted in a conclusion that there is a significant deficiency in our internal controls as of June 30, 2004.

        In March 2004, the Public Company Accounting Oversight Board, or PCAOB, defined a "significant deficiency" as a deficiency that results in more than a remote likelihood that a misstatement of the financial statements that is more than inconsequential will not be prevented or detected. As a result of this new standard, our independent auditors noted in our most recent audit a significant deficiency. The significant deficiency related to our need to increase our existing finance department resources to be able to prepare financial statements that are fully compliant with all recently issued technical accounting literature and Securities and Exchange Commission, or SEC, reporting guidelines on a timely basis. In order to remedy this significant deficiency, we intend to (1) hire a director of financial reporting and research, (2) hire a director of SEC reporting and compliance and (3) create an internal audit department, all of which will increase our costs. We cannot assure you that these measures or any future measures will enable us to remedy this significant deficiency or avoid other significant deficiencies in the future.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.

        Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our results of operations could be misstated and our reputation may be harmed. Historically, we may not have maintained a system of internal controls that was adequate for a public company, and in preparing the financial statements included in this prospectus we placed only limited reliance on our historical internal control structure. We cannot assure you that the measures we have taken to date or any future measures will ensure that we will be able to implement and maintain adequate controls over our future financial processes and reporting. If we are unable to implement and maintain adequate internal controls in the future, our business, results of operations and financial condition could be materially adversely affected.

Efforts to comply with the Sarbanes-Oxley Act will entail significant expenditure; non-compliance with the Sarbanes-Oxley Act could materially adversely affect us.

        The Sarbanes-Oxley Act of 2002, enacted in July 2002, as well as related rules adopted by the SEC, including the requirement that we issue a report on our internal controls as required by Section 404 of the Sarbanes-Oxley Act, will require changes to some of our accounting controls and procedures. We expect these new rules and regulations to continue to increase our accounting, legal and other costs and to make some activities more time consuming and/or costly. Upon completion of this offering, we will be required to comply with Section 404 of the Sarbanes-Oxley Act for the year ended December 31, 2005. In the event

23

that we are unable to achieve compliance with the Sarbanes-Oxley Act and related rules, it could materially adversely affect our business, results of operations and financial condition.

Our centralized headquarters functions are susceptible to disruption by catastrophic events, which could have a material adverse effect on our business, results of operations and financial condition.

        Our headquarters building is located in Spartanburg, South Carolina. Our information systems and administrative and management processes are primarily provided to our zone and regional management and to our payday cash advance centers from this centralized location, and they could be disrupted if a catastrophic event, such as a tornado, power outage or act of terror, destroyed or severely damaged our headquarters. Any of these catastrophic events could have a material adverse effect on our business, results of operations and financial condition.

Potential future acquisitions could be difficult to integrate, divert the attention of key management personnel, disrupt our business, dilute stockholder value and adversely affect our business, results of operations and financial condition.

        We may consider acquisitions of companies, technologies and products that we feel could accelerate our ability to compete or allow us to enter new markets. Acquisitions involve numerous risks, including:

•

difficulties in integrating operations, technologies, accounting and personnel;



•

difficulties in supporting and transitioning customers of our acquired companies;



•

diversion of financial and management resources from existing operations;



•

risks of entering new markets;



•

potential loss of key employees; and



•

inability to generate sufficient revenues to offset acquisition costs.

        Acquisitions also frequently result in the recording of goodwill and other intangible assets which are subject to potential impairments in the future that could harm our financial results. In addition, if we finance acquisitions by issuing convertible debt or equity securities, our existing stockholders may be diluted, which could affect the market price of our stock. As a result, if we fail to properly evaluate acquisitions or investments, we may not achieve the anticipated benefits of any such acquisitions, and we may incur costs in excess of what we anticipate, either of which could have a material adverse effect on our business, results of operations and financial condition.

If we lose key management or are unable to attract and retain the talent required for our business, our business, results of operations and financial condition could suffer.

        Our future success depends to a significant degree upon the members of our senior management, particularly William M. Webster IV, our Chief Executive Officer, John T. Egeland, our President, and John I. Hill, our Executive Vice President and Chief Financial Officer. Mr. Webster is our co-founder and has been instrumental in the development of the regulatory and legislative framework in which we operate. Messrs. Egeland and Hill have been instrumental in procuring capital and executing our growth strategies and in providing expertise in managing our operations. The loss of the services of one or more members of senior management could harm our business and development. None of Messrs. Webster, Egeland or Hill has an employment agreement with us, and we do not maintain key man life insurance policies with respect to any of our employees. Our continued growth also will depend upon our ability to attract and retain additional skilled management personnel. If we are unable to attract and retain personnel as needed in the future, our business, results of operations and financial condition could suffer.

Regular turnover among our managers and employees at our payday cash advance centers makes it more difficult for us to operate our payday cash advance centers and increases our costs of operations, which could have an adverse effect on our business, results of operations and financial condition.

        In the year ended December 31, 2003, the turnover among our payday cash advance center managers was approximately 46% and among our other payday cash advance center employees was approximately

24

92%. Approximately 50% of the turnover has traditionally occurred in the first six months following the hire date of our payday cash advance center managers and employees. This turnover increases our cost of operations and makes it more difficult to operate our payday cash advance centers. If we are unable to retain our employees in the future, our business, results of operations and financial condition could be adversely affected.

We may not maintain adequate insurance coverage to protect us from losses.

        We maintain insurance coverage, including workers' compensation insurance, liability insurance, property insurance, crime insurance, directors' and officers' insurance, employment practices liability insurance and fiduciary liability insurance, to protect us against losses in such amounts, covering such risks and liabilities and with such deductibles or self-insurance retentions as we believe are in accordance with normal industry practice. However, we cannot assure you that our insurance policies will provide sufficient coverage to provide adequately for our current or future losses, risks or liabilities. If our current or future losses exceed our insurance coverage or are not covered by our insurance, our business, results of operations and financial condition could be materially adversely affected.

We expect our costs to increase. Future cost increases could have a material adverse effect on our business, results of operations and financial condition.

        We have experienced increases in workers' compensation costs, primarily due to workers' compensation rate regulations in California that affect our operations in that state. Also, consistent with the general economic environment, we have sustained increases in medical coverage for our employees and other types of insurance coverage, such as general liability. Our costs may increase in the future, eroding our profitability. In addition, we will have the cost of completing this offering and the ongoing additional cost of operating as a public company, including the cost of additional reporting and internal control personnel, external accounting and legal fees, investor relations, insurance for directors and officers and compensation for directors. Future cost increases could have a material adverse effect on our business, results of operations and financial condition.

We used to be taxed as an S corporation under Subchapter S of the Internal Revenue Code and claims of taxing authorities related to our prior status as an S corporation could harm us.

        Since October 2001, we have been taxed as a "pass-through" entity under Subchapter S of the Internal Revenue Code. Following this offering, we will be taxed as a C corporation under Subchapter C of the Internal Revenue Code, which is applicable to most corporations and treats the corporation as an entity that is separate and distinct from its stockholders. If our tax returns for the years in which we were an S corporation were to be audited by the Internal Revenue Service or another taxing authority and an adverse determination was made, we could be obligated to pay back taxes, interest and penalties. Any such claims could result in additional costs to us and could have a material adverse effect on our business, results of operations and financial condition.

Our operating history has no bearing on future profitability.

        Although we were profitable during the year ended December 31, 2003 and during the first six months of 2004, we cannot assure you that we will be profitable in the future.

Risks Related to Our Common Stock and this Offering

         There has been no prior public market for our common stock, and an active trading market may not develop.

        Prior to this offering, there has been no public market for our common stock. The initial public offering price for the shares of our common stock sold in this offering will be determined by negotiation between the representatives of the underwriters on the one hand and the selling stockholders and us on the other. This price may not reflect the market price of our common stock following this offering. An active trading market may not develop following completion of this offering or, if it is developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. We cannot assure you that the market price will equal

25

or exceed the public offering price of your shares. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our stock could decline.

        The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrade our stock, the price of our stock could decline. If one or more of these analysts cease coverage of our company, we could lose visibility in the market, which in turn could cause our stock price to decline.

Our executive officers, directors and existing stockholders may be able to exert significant control over our future direction.

        After this offering, our executive officers, directors and existing stockholders will together control approximately [    ] % of our outstanding common stock. As a result, these stockholders, if they act together, may be able to control, as a practical matter, all matters requiring our stockholders' approval, including the election of directors and approval of significant corporate transactions. As a result, this concentration of ownership may delay, prevent or deter a change in control, could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of Advance America or its assets and might reduce the market price of our common stock.

The price of our common stock after this offering may be lower than the offering price you pay and may be volatile.

        Prior to this offering, our common stock has not been sold in a public market. After this offering, an active trading market in our common stock might not develop. If an active trading market develops, it may not continue. Moreover, if an active market develops, the trading price of our common stock may fluctuate widely as a result of a number of factors, many of which are outside our control. In addition, the stock market has experienced extreme price and volume fluctuations that have affected the market prices of many companies. These broad market fluctuations could adversely affect the market price of our common stock. A significant decline in our stock price could result in substantial losses for individual stockholders and could lead to costly and disruptive securities litigation. If you purchase shares of our common stock in this offering, you will pay a price that was not established in a competitive market. Rather, you will pay a price that will be negotiated with the representatives of the underwriters based upon a number of factors. The price of our common stock that will prevail in the market after this offering may be higher or lower than the offering price.

Investors will incur immediate and substantial dilution in the book value of their investment.

        The initial public offering price will be substantially higher than the net tangible book value per share of the outstanding common stock. If you purchase shares of our common stock, you will incur immediate and substantial dilution in the amount of $[                      ] per share, based on an assumed initial public offering price of $[                      ] per share, which is the mid-point of the initial public offering price range set forth on the cover of this prospectus.

The use of our common stock to fund acquisitions or to refinance debt incurred for acquisitions could dilute existing shares.

        From time to time, we may consider opportunities to acquire payday cash advance companies or businesses. Future acquisitions, if any, could provide for consideration to be paid in cash, shares of our common stock, or a combination of cash and shares. If the consideration for an acquisition is paid in common stock, existing stockholders' investments could be diluted. Furthermore, we may decide to incur debt to fund all or part of the costs of an acquisition and may later issue additional shares of common stock to reduce that debt or to provide funds for future acquisitions. The issuance of additional shares of common stock for those purposes would also dilute our existing stockholders' investments.

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Applicable laws and our certificate of incorporation and bylaws may discourage takeovers and business combinations that our stockholders might consider in their best interest.

        State laws and our certificate of incorporation and bylaws may delay, defer, prevent or render more difficult a takeover attempt that our stockholders might consider in their best interests. For instance, they may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging takeover attempts in the future.

        State laws and our certificate of incorporation and bylaws may also make it difficult for stockholders to replace or remove our directors. These provisions may facilitate entrenchment of directors which may delay, defer or prevent a change in our control, which may not be in the best interests of our stockholders.

        The following provisions that are included in our certificate of incorporation and bylaws have anti-takeover effects and may delay, defer or prevent a takeover attempt that our stockholders might consider in their best interests. In particular, our certificate of incorporation and bylaws:

•

permit our board of directors to issue one or more series of preferred stock;



•

prohibit stockholders from filling vacancies on our board of directors;



•

prohibit stockholders from calling special meetings of stockholders and from taking action by written consent;



•

impose advance notice requirements for stockholder proposals and nominations of directors to be considered at stockholder meetings; and



•

require the approval by the holders of at least 80% of the voting power of our outstanding capital stock entitled to vote on the matter for the stockholders to amend the provisions of our bylaws and certificate of incorporation described in the second through fourth bullet points above and in this bullet point.

        In addition, many of our subsidiaries are licensed by, and subject to, the regulatory and supervisory jurisdiction of the states where they do business. Under change in control statutes of some of these states, any person, acting alone or with others, who is seeking to acquire, directly or indirectly, 5% or more of our outstanding common stock may need to be approved by the authorities within those states. As a result, prospective investors who intend to acquire a substantial portion of our common stock may need to be aware of and to comply with those state requirements, to the extent applicable.

        In addition, Section 203 of the General Corporation Law of the State of Delaware may limit the ability of an "interested stockholder" to engage in business combinations with us. An interested stockholder is defined to include persons owning 15% or more of our outstanding voting stock.

We can redeem your common stock if you are or if you become a disqualified person.

        Federal and state laws and regulations applicable to providers of payday cash advance services may now or in the future restrict direct or indirect ownership or control of providers of payday cash advance services by disqualified persons (such as convicted felons). Our certificate of incorporation provides that we may redeem shares of your common stock to the extent deemed necessary or advisable, in the sole judgment of our board of directors, to prevent the loss of, or to secure the reinstatement or renewal of, any license or permit from any governmental agency that is conditioned upon some or all of the holders of our common stock possessing prescribed qualifications or not possessing prescribed disqualifications. The redemption price will be the average closing sale price per share of our common stock during the 20-trading-day period ending on the second business day preceding the redemption date fixed by our board of directors. At the discretion of our board of directors, the redemption price may be paid in cash, debt or equity securities or a combination of cash and debt or equity securities.

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Sales of a substantial number of shares of our common stock following this offering may adversely affect the market price of our common stock and the issuance of additional shares will dilute all other stockholdings.

        Sales of a substantial number of shares of our common stock in the public market or otherwise following this offering, or the perception that such sales could occur, could adversely affect the market price of our common stock. After completion of this offering, our existing stockholders will own approximately [    ] shares of our common stock assuming there is no exercise of the underwriters' over-allotment option.

        After completion of this offering, there will be approximately [    ] shares of our common stock outstanding. Of our outstanding shares, the shares of common stock sold in this offering will be freely tradable in the public market, except for any shares sold to our "affiliates," as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the Securities Act), and, if the purchaser acquires in excess of 100 shares, any shares purchased through our directed share program will be subject to 180-day lock-up agreements and restrictions imposed by the National Association of Securities Dealers, Inc., or NASD. In addition, our certificate of incorporation permits the issuance of up to approximately [    ] million additional shares of common stock after this offering. Thus, we have the ability to issue substantial amounts of common stock in the future, which would dilute the percentage ownership held by the investors who purchase our shares in this offering. See "Shares Eligible for Future Sale" for further information regarding circumstances under which additional shares of our common stock may be sold.

        We, each of our directors and senior officers, and our selling stockholders have agreed, with limited exceptions, that we and they will not, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the underwriters, during the period ending 180 days after the date of this prospectus, among other things, directly or indirectly, offer to sell, sell or otherwise dispose of any of shares of our common stock or file a registration statement with the SEC relating to the offering of any shares of our common stock.

        Upon consummation of this offering, certain of our existing stockholders will enter into a registration rights agreement with us. Pursuant to that registration rights agreement, and after the lock-up agreements pertaining to this offering expire 180 days from the date of this prospectus, we expect to register under the Securities Act all or a portion of the approximately [          ] shares of our common stock held by the stockholders who are a party to that agreement. Registration of the sale of these shares of our common stock would permit their sale into the market. If, upon the expiration of the 180-day lock-up period, any of the existing stockholders sell a large number of shares, the market price of our common stock could decline.

        Assuming the underwriters do not exercise their over-allotment option, after the lock-up agreements pertaining to this offering expire 180 days from the date of this prospectus unless waived earlier by Morgan Stanley & Co. Incorporated, up to [    ] of the shares outstanding prior to this offering will be eligible for future sale in the public market at prescribed times pursuant to Rule 144 under the Securities Act, or otherwise. Sales of a significant number of these shares of common stock in the public market could reduce the market price of the common stock.

        Shares registered under a registration statement on Form S-8 to be filed by us after the consummation of this offering will be available for sale into the public markets, subject to the vesting of restricted stock and to the exercise of any future issued options, if any.

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