Category: Profits

13
Sep

Seed/Angel Funding with Tribe Lending Enterprise [TLE] & Experienced Servicer

The Opportunity:

Seed/Angel Funding with Tribe Lending Enterprise [TLE] & Experienced Servicer

A highly experienced Team of two founders & a TLE are launching a tribal online loan portfolio in the USA.

FOUNDERS’ DETAILS:

  • Founders’ contribute $1.1M cash to this launch
  • Founders’ contribute their lead aggregator company having generated 500K sub-prime consumer leads/month
  • This is not their first rodeo
  • U.S. based Team
  • Tribe lending model with a multi-pay installment loan product in 45 states.
  • Founder(s) previously successfully launched and exited tribe online loan portfolio
  • Founder(s) previously launched a highly successful online loan platform/portfolio in the most competitive, complicated state in the USA
  • Founder(s) previously serviced $20M sub-prime loan portfolio and 40K loans
  • Founders’ are family oriented – obligations, dependents, motivated, strong willed, driven, impeccable credentials… [I always favor these conditions when I   collaborate.]
  • Founders’ know their loan product KPI’s. Realistic. Experienced. Well versed in Cost per Funded Loan, First Time Defaults, Customer Acquisition Costs, Lead   metrics/costs…
  • Founders’ loan management software platform provides investors with 100% transparency hourly, daily, weekly, monthly… access to all accounting, reports…
  • In-house call center with highly experienced call center operations manager on Team
  • Tribe [TLE] Marketing/Servicing agreement in place with a large, sophisticated TLE – several $10M/$30M+ portfolios.
  • Supremely customer focused loan product offering financial literacy and credit building
  • ACH, bank accounts, CRA’s, EIN, lead generation… in place.
  • Founders have commissioned compliance officer, TLE employee(s), call center, accounting…

Investor(s)

  • Provide $3M to be deployed year 1
  • Interest rate for investors = 15% to 24% paid quarterly
  • 15%  to  50% equity to investors
  • Investor funds to be returned year 5
  • End of year 5, Investor return is $7.4M on $3M investment plus investor maintains their negotiated 15% – 50% equity in the enterprise.
  • OBVIOUSLY NO GUARANTEES:
    • Conservative performance estimates!
    • Year 3 = 80% return on loan portfolio
    • Year 4 = 100%
    • Year 5 = 125%
    • Year 5 Stabilize new investment money inflow = annuity of $750K/year

As they say, “Your results may differ.”

Exit strategy: maintain the portfolio as an “annuity” [estimated at $938K/year] or sell the loan portfolio for 2.2X.

NEXT STEP?
• Email your contact information to: TrihouseConsulting@Gmail.com
• Conference call(s)
• Meet the Founders
• Fall in love
• Nail down a Term Sheet.

Jer@TrihouseConsulting.com 702-208-6736 Cell
Knowledge Store: Tribe & State-by-State Licensing Models
http://www.AutomobilePawn.com Start a Title Loan Biz
http://www.PaydayLoanIndustryBlog.com
http://www.PaydayLoanUniversity.com/ Start a Loan Biz
http://www.eCheckSystem.com ACH, ICL, Debit/Credit card

19
Aug

What’s a 36% APR Look Like to a Payday Loan Lender?

At first glance, a 36% maximum interest rate on a consumer loan appears to make a great deal of sense. After all, banks and credit unions are paying less than 1% on savings accounts. That equates to $100 in the bank for a year earns $36; $3 per month. No biggie. That barely pays for a family to eat at Kentucky Fried Chicken once/year.

South Dakota, Iowa, Kentucky, Arkansas, the military and a few other states, have passed legislation that enforces a maximum 36% APR on consumer loans.

What’s that look like in the real world? A 36 percent annualized rate offers lenders just $1.38 for every $100 they lend for two weeks. $1.38!

Now I’m not referring to consumers with 780+ FICO scores. Payday loan borrowers have either very poor or non-existant FICO scores. And their employment histories are “sketchy” to say the least.

When a payday loan lender funds a loan to the typical payday loan borrower, chances are 25%+ that this PDL consumer will not make ONE SINGLE PAYMENT!

That’s right! 1st-time defaults for payday loan borrowers typically exceed 25%!

What lender in their right mind would take a chance lending money to consumers having “thin” or non-existant credit files, jobs with Uber, Del Taco – name your poison – for $1.38 BEFORE paying their rent, payroll, store lease, insurance, phones, taxes, CRA (credit reporting agency), marketing costs…? NONE!

So… what’s a world without payday loan products look like? A WORLD OF NSF’s! Non-sufficient funds fees charged by banks and credit unions. A PERFECT WORLD FOR PAYDAY LOAN COMPETITORS!

“Follow the Money!” Who is really behind the anti-payday loan rhetoric? Bankers. Credit Unions. The competition…

According to the South Dakota Attorney General, the 36 percent interest rate cap does not apply to the following lenders:

  • State and national banks
  • Bank holding companies
  • Other federally insured financial institutions
  • State chartered trust companies
  • Businesses that provide financing for goods and services that they sell

Contributors to the fight against South Dakota payday loan lenders included Sioux Falls Federal Credit Union!

The CFPB has stated that it will interpret bank NSF overdrafts as short-term lending. Great! Banks and credit unions should be forced to disclose NSF fees as an APR. We are talking 1500% APR’s!!

Overdrafts are short-term loans. At least that is how 60% of American households treat them. However, because banks call NSF’s “fees” instead of interest, they get away with huge profits and zero disclosure.

TO BE CLEAR, I don’t care if they charge $35 for a single NSF. BUT I DO WANT THEM TO BE FORCED TO CLEARLY DISCLOSE THIS TO CONSUMERS!

According to a study by Magnify Money, a simple $100 overdraft with Citizens Bank for 10 days would cost a consumer $83.93! Is it any wonder this bank wants to outlaw payday loan products? A cheaper loan product?

Bottom line? FOLLOW THE MONEY! Understand that more consumer choices = lower fees and multiple options for solving temporary financial challenges. Short-sided “consumer advocates” usually have an agenda; they are not always looking out for consumers. You must dig a little deeper to fathom what their REAL goals are!

Which brings up my agenda; I’m a capitalist! And I’m not ashamed to be one. You should be one as well. Make a LOT of $$ and spend it the way YOU choose to: not “Big Brother.” You want to build shelter for kids? Feed the poor? DO IT! YOUR WAY!!

Look no further than Cuba, Costa Rica, Argentina… for examples of “big Brother” gone wild.

The Business of Lending Money to Make Money. It’s all right here: “The Manual.” Invest in it. Read it. Read it again. Study it. Then, BEGIN!

Question? Comment? Hate me? Jer@PaydayLoanUniversity.com 702-208-6736 PDT

How to Start Installment Loan Business

How to Start Installment Loan Business

 

 

04
Apr

14 Ways to Make Money by Lending Money

By: Jer Trihouse: Insight & Wisdom in small dollar lending. Digging down below the media headlines…

Continuing with my Theme, “It’s incredible how profitable and powerful a money lending business can be.”

To make serious money in the payday loan industry, installment, car title lending, even cash for gold, most of us think we have to analyze multiple potential locations, lease a store-front, spend $25,000 plus on a build-out, apply for a license,  invest in signage, hire and train a few employees, launch a grand opening, make some loans and pray our customers pay us back in a reasonable period of time.

Basically, there are 14 ways to make a ton of money by making small dollar loans to consumers and small businesses in the form of installment loans, payday loans, car title loans and line-of-credit loans.

I’ll discuss these in no particular order.

Depending on the responses we get from people like you, we’ll follow up in the future with more in depth analysis of each opportunity.

Sometimes it makes sense to look at our lives and our businesses from a brand new perspective. What’s really important?

What are we really trying to accomplish? What are our true priorities? Where do family, friends, loved ones, our personal passions and our own needs fit into “the big picture?”

Are you at the stage where building an empire with all the responsibilities that entails is your goal?

Are you simply trying to make a good living while enjoying the luxury of short work days combined with a round of golf or an afternoon of fishing?

Or, perhaps you prefer an unfettered life. One in which you truly are the “captain of your own ship” with few entanglements. Just logging onto the Internet a few times a day, running your business from anywhere in the world and enjoying the fruits of your labor with little need to engage with employees and consumers is sufficient?

These thoughts and more prompt me to share my thoughts on our industry and the various ways you can make a great living in it while not necessarily employing the usual stereotype approaches.

Oh, one last thing!

If payday loans or car title loans, installment lending or check cashing… whatever… are not what YOU fantasize about, never fear. My rant is still appropriate for YOU. Just delete the word loan and substitute your dream or vision. Try it! I guarantee you it will work!!

Now, on with the show…

Again, “To make serious money in the payday loan industry, installment, car title lending, even cash for gold, most of us think we have to analyze multiple potential locations, lease a store-front, spend $25,000 plus on a build-out, apply for a license,  invest in signage, hire and train a few employees, launch a grand opening, make some loans and pray our customers pay us back in a reasonable period of time.”

Those of us who have embraced the Internet, think we have to build a web site(s), hire programmers to code some payday loan software, become an expert in search engine optimization and search engine marketing, add a call center to handle all the verifications and inquiries, fund payday loans with our own money, and then become an expert in collections.

Sure, these are the typical approaches and thousands of payday loan operators use these methods to make a lot of money. But not all of us have sufficient funds, know how, or the inclination to make our fortune this way.

Nor do all of us want to spend our days and nights earning our living in such an intense environment.

As you read this keep in mind:

CONSUMER INSTALLMENT LOAN, PAYDAY LOAN, & CAR TITLE LEADS AND APPLICATIONS ARE WORTH A LOT OF MONEY!

Loan companies – this includes those of us who FUND loans directly to a consumer and lead GENERATORS who sell leads and loan applications – spend big bucks $$$$$ to get a consumer to apply for a payday loan, a car title loan, an installment loan… This goes for the “brick-n-mortar” guys and the Internet operators as well.

Think about this!

Just like insurance applications for autos and health, just like mortgage applications, just like pizza… companies pay millions of dollars each year to get the eyes and ears of their customer to pay attention to them. Each one of these leads and applications are worth A LOT OF MONEY! Borrowers looking for money are EXTREMELY VALUABLE.

If a payday loan or installment loan customer were to get just three $500 payday loans per year for 10 years they would generate between $2250 and $4500+ in fees over their lifetime. No wonder lenders are willing to spend as much as $165 or more to purchase a single payday loan/installment lead in hopes of securing a borrower for life.

So, what are the 14 ways you can make serious cash in the money lending industry? Let’s begin…

[Note: For additional marketing ideas for lending money to make money be sure to read: Part 1 and Part 2 of our Payday Loan & Installment Loan Marketing Ideas series.]

1) Affiliate sales.
Consider building a website focused on payday loans/installment loans/car title loans/money lending… and become an affiliate of a direct lender or a lead aggregator. Get paid for every customer you send them. Lenders typically pay up to $165+ for each funded loan and often $1 to $9 for each loan application that is not funded for whatever reason (length of time on the job, not having direct deposit, no checking account…)

There are several 3rd-party companies that will enable you to accomplish this at zero cost to you!

We have a whole chapter devoted to the specific steps you need to accomplish this as well as a number of companies that will buy your leads. We’ve assembled a Chapter in our “bible,” How to Start a Payday Loan or Title Loan Business.”

2) Lease a store, put a loan business in it and make a lot of money. This is the approach used by 90% of entrepreneurs. If you’re into opening one store, then another, then another… This is a great way to make lot’s of money!

3) Build, or have built, a lending web site. If you’re not into personally building web sites or don’t already have a good connection, there are several really good sources available today to get them built for less than $300. Tie them into a loan software solution (less than $1000) and you can begin driving loan consumers to your web site, qualify them with a few of of the Identification Validation Services (scrubbers) available to lenders, fund the loans and make lot’s of money.

4) Build one loan store, get the formula for success down, then build a web site to service your entire state/province.

How to Start Installment Loan Business

How to Start Installment Loan Business

This is a great method for expanding your market share beyond the 5-8-10 mile radius around your loan store. Your web site will allow you to fund loans to your customers no matter where they live. Your “brick-n-mortar” is licensed thus your Internet operation is in compliance as well.

Whether you choose to use the choice of law model, the multi-state model, the Sovereign Nation Model, the CSO-CAB model or the offshore-model this approach can be very rewarding!

5) If you’re into writing, you can create articles about lending/borrowing and sell them to loan funding companies, payday loan lead generators, payday loan blogs and payday loan affiliates. All of these entities need content to help them rank well in search engines in order to fund payday loans or to sell payday loan leads.

6) Sell completed loan websites. There’s a huge demand by entrepreneurs for complete, turn-key loan web sites designed to fund loans and sell leads. The informed loan lead generators and loan funding companies realize a series of linked “micro-websites” (static 4-5 page web sites) are extremely helpful for ranking well in the major search engines.

You can create and sell one or a network of loan websites with the goal of generating loan leads and full applications by consumers.

Additionally you could tie one or more of these niche websites into an off-the-shelf loan software solution thereby enabling the purchaser to actually fund and manage a loan Internet business. We get several inquiries every month just for this type of project.

7) Sell your professional expertise to loan companies. It’s a $50 billion dollar business. There is a great demand for lawyers, compliance experts, offshore services, regulatory skills, software developers, collection professionals, web site hosting, store location selection, advertising pros, search engine optimization, store build outs, signage, logos, loan software and on and on. You can become a consultant regarding the entire industry or focus on a single niche like software selection or compliance and regulatory issues.

You can even advertise here: http://www.PaydayLoanUniversity.com

8) Offer complementary products and expertise to lenders. Rapid tax refunds, car title loans, check cashing, pawn shops, bail bonds, buying and selling of scrap gold and silver, credit repair, mortgages and more are a natural fit for our loan demographic (read Wal-Mart customer).

You can become a reseller, an independent sales operation for an existing product or service as well as develop your own complementary product or service for the industry. Loan management software consultants, ACH, ICL, debit/credit card processors, compliance professionals, lawyers focused on lending, anti-money laundering specialists…

Loan companies are on the lookout for additional revenue streams, complementary products and services, and better, cheaper, easier ways of doing things.

9) Do SEO (search engine optimization), Social Optimization (YouTube, Instagram, Reddit, Digg, FaceBook, LinkedIn, Twitter, Google+), Direct Link Marketing, Chat Rooms… for loan lead generators and loan funding companies.

Loan leads and applications are bought and sold everyday by the tens of thousands for $9.00 to $165 and more per lead. Remember that one good, returning loan consumer is worth thousands of dollars over their lifetime to a loan funding company. Enova, a publicly traded lender, did nearly $500M in small loans in their last quarter!

10) Build web sites focused on loans and place targeted ads that provide revenue to you, the owner of the site. It’s like selling real estate. Google Adsense, Bing, Facebook, Youtube, DuckDuckGo… are extremely good at doing just this and generate tens of millions of dollars for web site owners every month. Advertisers like CashNetUSA.com, Lendup.com, Avant.com… pay the search engines to allow their advertisements to appear on related web sites.

[NOTE: Google and others are evaluating this and changing their policies on loans >36% APR’s. I think this is a HUGE disrupter for the incumbant search engines and a tremendous opportunity for those of us who want to capitalize on “big brother” Google!.]

For an example go to:
http://www.AutomobilePawn.com or http://www.PaydayLoanIndustryBlog.com .
The ads placed “above the fold” are provided by Google via a little piece of code placed on your web page. Each time a visitor clicks on one of those ads the web site owner earns a fee. It’s not uncommon for a web site owner to earn several thousand dollars per month from one web site via these click revenues.

[Again, this is changing as I write this! Read my thoughts and the opportunities this policy presents on my Blog.]

11) Manage PPC (Pay Per Click) campaigns for loan companies.

Google [not >36% APR], Yahoo, Bing-MSN and more all offer advertisers PPC programs. Few lenders understand the strategies and tactics one must know to successfully run a PPC program. After all, if you don’t know what you’re doing, Bing and Google will blow your entire monthly marketing budget in a single day. We’ve witnessed very sophisticated loan companies blow through $5000, $10,000 and more in less than 72 hours because they don’t know what they’re doing.

To achieve ranking on page one of the major search engines for a keyword like “payday loan” or “installment loan” is very challenging; especially in the organic [free] results. The PPC sponsored areas are very competitive and can be very expensive if you don’t have a clue.

Another often overlooked area is local search.

VERY few brick-n-mortar lenders understand the value of ranking well in the top search engines for local search.

When a potential customer uses their favorite search engine, or their cell phone, to find their nearest loan store and your business doesn’t even appear on the first page, YOU HAVE A PROBLEM.

Try it.
Go to
http://www.Google.com or whatever your favorite search engine is and search for “Las Vegas payday loan store” or “Houston payday loan store” or “your city payday loan store.” Are you there? On page one? If not, you’d better start working on this!

(Don’t forget! This customer searching for a car title, scrap gold or payday loan store near them is probably on their cell phone.

Top SEO people are worth their weight in gold! Those of us willing to learn how to do this become golden.

12) Produce videos: pawn, payday loans, car title loans, how-to instructional videos like “How to Make a Collection Call” for example.

A high ranking in a search engine for a competitive key word phrase like “payday loan” or “cash advance” or even “no Teletrack payday loan” are worth millions of dollars to a payday loan funding company. But to rank well in a search engine a website needs content; good, keyword rich, focused content.

Search engines, especially Google & YouTube, love videos! Direct lenders and lead generators need good content to rank well. If your team can create appropriate loan focused videos that can generate some buzz you will be well paid for your efforts!

13) Create Blogs. Create a Blog focused on a very narrow niche within the loan industry. Think installment loans, payday loans, car title loans, loan software, ACH, collections, search, consulting… Not only can you place income producing advertisements on the site but you could eventually solicit advertisers to place advertising on your Blog.

Blogs focused on extremely specific niches generate traffic from people really interested in the topic or they’re doing research. Advertising income and click-thru rates of 10% or more are achievable resulting in significant monthly revenue for the owner of the Blog.

The more specific your Blog the less competition you’ll face.

Seek out specific advertisers for your Blog. Once you build up significant traffic you can not only develop substantial revenue from “clicks” but you can offer to feature a specific advertiser for a fee.

Finally, you could eventually sell your Blog outright for substantial dollars.

For another example of a payday loan Blog: http://www.PaydayLoanIndustryBlog.com

14) Create a Facebook page for your business. Or, specialize in performing this service for loan companies. Lenders need Google+, Facebook, Pinterest, Instagram and Twitter persona’s as well.

Just one or two of these can generate several thousand dollars of income every month.

Any of these ideas, if implemented properly, will lead to significant, recurring monthly income for YOU!

MY POINT IS, YOU DO NOT HAVE TO BE A LENDER TO MAKE SERIOUS CASH IN THE PAYDAY LOAN INDUSTRY!

The question is, how do you want to live? How do you want to spend your day? How much money do you need? How hard do you want to work?

And finally, what’s your dream?

Shameless plug: Our “Payday Loan Bible” available at: http://www.paydayloanuniversity.com/buy-now/  discusses the majority of these ideas in depth and includes a great deal of the resources and strategies discussed here.

Comments? Suggestions? What did we forget? Need more insight or “how to” for some aspect of this rant? Don’t be bashful!! TALK TO ME! Jer@TrihouseConsulting.com

Oh, and again! One final point.

What are you REALLY into? What’s your passion?

Whatever it is, DELETE the word “payday loan” or “installment loan” from this rant and substitute YOUR passion. Chances are these ideas will work for you in any endeavor.  Now DREAM…

For more resources related to making money by lending money, visit: our Resources Page.

27
Mar

Texas Payday Loans

How Payday Lenders Use Credit Access Businesses to Offer Loans exceeding Texas’s 10% Interest Cap.

By: Jer at Trihouse Consulting. Article 16, Section 11 of the Texas Constitution imposes a 10 % cap on the amount of interest that can be charged on personal loans. What’s so amazing is that it’s estimated that the state of Texas is responsible for more than 60% of the nationwide annual profits flowing to the payday loan and car title industries.

How? Credit Access Businesses (CAB’s) and Credit Services Businesses (CSO’s). Texas regulators allows lenders to incorporate their storefronts and websites as separate, but affiliated, entities that—on top of the 10 % interest they collect on behalf of a lender—then legally charge additional  fees and interest for the services that they provide by “referring” consumers to the lender and servicing the loan.

In Texas, payday and auto title store fronts are allowed to register as Credit Access Businesses (CAB) under the state’s Credit Services Organizations Act.

This  Act imposes no limits on fees, interest rates, loan amount size, or refinances, and it does not require the CAB to assess ability to repay based upon the consumer’s income. [Although obviously, this is a calculation all lenders make in order to make certain the borrower can successfully pay back the loan. Lenders do not simply give away money. They need to be repaid! [See our Manual for strategies to accomplish this.]

Accordingly, for single payment products  – payday loans for example – offered in Texas, CABs often charge an “origination fee,” typically ranging from $22 to $30 per $100 borrowed and, if the borrower is unable to repay the loan by the due date, a “refinance fee” that is usually identical to the amount charged as an origination fee.

Because of the third-party lending structure, CABs also charge consumers up to an additional 10 % annual interest rate while the loan is in repayment on the lender’s behalf.

How to Start Installment Loan Business

How to Start Installment Loan Business

The state’s “estimated average payday loan borrower can pay up to $840 for a $300 loan and monthly fees for a $4,000 auto title loan often exceed $1,000.” [This estimate by the State of Texas is questionable. Obviously, if we were to consider a “Bell Curve” there would be Texas payday loan borrowers on both ends of the “Bell.”]

The Point? Operated “correctly,” a Texas based payday loan business can be very profitable. For a complete, step-by-step explanation of “How to Start and Operate a Payday Loan Company” in any State, we recommend our Manual; considered by many to be “The Bible” of the lending industry.

Have questions? Need help? Jer@TrihouseConsulting.com or 702-208-6736

02
Jan

For Lenders, There’s Dancing in the Streets Again

Lenders Dancing in the Streets Again!

How to Make Money by Lending Money

By Miro Posavec. A few months ago I wrote an article called, “There’s PANIC in the Streets.”

Let me start by saying that I don’t care too much for politics. I care about what happens to my country, my businesses, my family, and to me. I believe that’s true of most people.

And these past few years have shown how much damage can be done by public servants who don’t understand that the public has NEED of our payday and installment loan services, and by limiting options, they’re making life HARDER for those that most need every available choice.

With the support of the current administration, the CFPB has been attacking our industry on multiple fronts. Through negative press, discontinuing ACH transactions, limiting rates/ fees, and squeezing our banking partners.

How to start a payday loan businessIt was ugly. And all the projections were that the Democrats would win.  We lenders were all getting ready for the worst. Our consulting clients weren’t calling about methods to grow or expand their businesses. They were calling to get out, or wondering how to survive in such a hostile environment.

As always, we advocate good business practices, taking care of customers, and having a variety of services and revenue streams. This is true if you’re one location or 10,000.

If you’re lending money online, we recommend a few brick and mortars, and if you’re a store front, we advise dipping your toes into the online world. Diversity gives you power over adversity.

Moving forward, it appears we’re going to have a government that’s friendly to our industry. It looks like the CFPB is going to be “de-clawed,” and we’re going to be able to grow our lending operations.

We’re witnessing loan portfolios and enterprise valuations going up while our consulting clients are calling us with different questions. Now, we’re getting more of, “how do I grow?”, “I want to capture market share…”

Regarding “the business of lending money to make money,” here’s what we’re working on for you right now. 

We’ve created a Google Local solution. If you don’t know what I’m talking about, you’d better pay attention. Most consumers now look for a local business on their phones. And that means they do a google search.

Let me be clear. Our “Google Local Solution” is probably the most important marketing tool for your business TODAY. Here’s why:

  • Your customers are in their cars, driving towards a solution to their financial problem.
  • This scenario isn’t a fantasy or brand building exercise.
  • This is the most effective way to present your offer to people at the very moment they are about to buy your product or service.
  • We know the payday loan space! We own stores! We run Boot Camps. We talk and meet and counsel both successful and starving lenders of money EVERY DAY from all over the USA and MANY countries!
  • We’ve been doing this since 1998 AND  STILL GOING STRONG!
    • After all, how many years have you been reading our stuff 🙂 You can admit it! Even you vendors; loan management software providers, ACH processors, credit reporting agencies, lawyers, the staff of Congressman and Senators, OLA, CFSA, and FISCA members and staff, reporters, tribe leaders, call center providers, consultants… EVERYONE of you have invested in at at least ONE of our “Payday Loan Bibles!” This isn’t braggadocio; IT’S A FACT! And you dear reader know it]
  • It doesn’t get any better than this.

There are hundreds of directories, and services that promise to get you onto page one of Google’s search results. But Google is too smart to be played. There are no shortcuts, and no substitute for quality content.

Google has recently changed all of their algorithms, and there is no magic bullet that’s going to guarantee your top spot.  You’re probably getting a dozen sales calls per day promising control of Google.

Over the next week or so, we’re releasing an UP TO THE MINUTE Google local solution for lenders.  (Some changes came down just in the past 2 weeks).

So… we’re offering you three levels of participation in our new Google Local Program specifically targeted to lenders and rellated financial services businesses.

Join our waiting list! Click here to Sign up  As your reward, you’ll receive free our #1: “The 5 Things You Must Have on Your Google Local Listing for It to Be Effective.”

  • #1: “The 5 Things You Must Have on Your Google Local Listing for It to Be Effective.” (Free! And you can use our checklist against your current setup to make sure that you have it all covered)
  • #2: A Step-by-Step Video Course that will walk you through all the steps you need to make sure your Google Local setting is the best it can possibly be. You can delegate the tasks to your own people.
  • #3: Done for you solution. We have staff that’s been researching and developing this program for the past year. Since we already have our regular consulting clients on the schedule for this, we can get you on the calendar for implementation and review.  (Cost: to be determined by number of locations)
  • Apply to be considered here: Get Me On Google!
  • In closing, on behalf of Jer and myself, we wish you all the best for 2017.  May you have great health, prosperity, and enjoy the ride in this new year!
By Miro Posavec: Co-Founder PaydayLoanUniversity.com
  1. Apply to be considered here: Get Me On Google!

 

03
Dec

Update: Banks, Payday Loan Lenders and Operation Choke Point

Operation Choke Point

Obama Administration Last Gasp to Kill Payday, Installment, Guns, Dating, Escort Services…

In August of 2013, the payday loan industry was brought to its knees as a result of the revelation that the Obama administration launched “Operation Choke Point.”

The aim of “Operation Choke Point” is to sever bank relations with payday loan lenders, cash advance loans, dating services, escort services, gun sales ammo sales, coin dealers, credit repair services, fireworks sales, government grants, tobacco sales, marijuana sales, lottery sales, on-line gambling, surveillance equiptment and on and on and on…

How to Start Installment Loan Business

How to Start Installment Loan Business

It appears that the Obama administration, gasping for its last breath of oxygen, is doing everything possible to put an end to payday loans, installment loans, gun sales, ammunition sales, dating services, home based charities, Lotteries…

Wednesday, Advance America and the CFSA asked a judge for emergency relief from “Operation Chokepoint, lawyers included a written statement from Ed Lette, chairman of the Business Bank of Texas.

In an unusual display of straight forwardness, Mr. Lette shared how employees of Office of the Comptroller of the Currency “forced Mr. Lette to end a mutually beneficial, long-standing relationship with Power Finance Texas, a Texas-based payday lender.”

“Business Bank of Texas was forced to end this long-standing and beneficial relationship with Power Finance Texas by the Office of the Comptroller of the Currency,” Lette writes, adding:

“During a recent meeting with Scott Ward, an assistant deputy comptroller in the [Office of the Comptroller of the Currency’s] San Antonio office, Mr. Ward pressured our bank to end our relationship with Power Finance Texas. Mr. Ward told me that, if Business Bank of Texas continued to provide [automated clearing house] services to Power Finance Texas and other small lenders, the bank would incur a significant reputational risk. Although I completely disagreed with this assessment, Mr. Ward left no doubt that the relationship would have to be ended. The pressure that was brought to bear on our bank by our regulator left us with no choice but to drop Power Finance Texas as a customer and close its accounts.”

Even more astounding is the assertion by Orbert Michel, financial regulations expert at The Heritage Foundation and a vocal critic of Operation Choke Point, said it’s “very unusual” for bankers to publicly reveal internal issues they are experiencing with The Office of the Controller; VERY RISKY!

“So this statement is a very strong indictment of what’s going on behind the scenes,” said Mr. Michel.

During the past several months, gun shop owners have been loud and clear about the negative impact “Operation Choke Point” has had on their businesses. Their customers are screaming about their limited access to firearms and ammunition.

More than a few dating websites have experienced “bank discontinuence” as well because of “Operation Choke Point.”

And, as regular readers of our Newsletter know, “bank discontinuance” has been a significant problem for check cashers and money service businesses since the early 2000’s!

Payday loan lenders, installment loan lenders, car title loan lenders, tax preparers… aren’t the only industries complaining that “Operation Choke Point” targets their businesses unfairly. Tom Hudgins, chief operating officer  installment loan corporation Western Shamrock told The Daily Signal that his industry has felt the squeeze as well.

“Our funding sources continue to be squeezed and our banking relationships at local levels continue to be eliminated,” said Hudgins, who operates 300 locations in 19 different states. “It’s creating havoc.”

Hudgins said that, “There is some sentiment that there is a last-ditch effort to eliminate not just funding sources, but banking relationships for the installment loan lending industry.”

Per The Daily Signal, in some cases, Hudgins said he’s maintained relationships with banks for over 20 years, “and suddenly, those banks decide not to do business with us because they view us as a “reputational risk.”

Randy Dalton with 37 Banner Finance installment loan locations said, “One of our main lending institutions essentially cut us off from wanting to do business, and we had a relationship with them for over 50 years.”

TRUMP ADMINISTRATION?

Could be very good for us! Both Senators Ted Cruz, R-Texas, and Mike Lee, R-Utah, introduced legislation thatwould  kill “Operation Choke Point.” Both men are aligned strongly with the new Trump AG, Jeff Sessions.

Based on the renewed interest in the payday loan, installment loan and tax prep industry as measured by our own antecdotal increase in phone calss, emails, and “Bible” sales, President Trump is going to make it a certainty that consumers will continue to have plenty of financial choices and loans to solve their financial emergencies!

Yep! We are VERY EXCITED ABOUT THE FUTURE OF THE LENDING INDUSTRY!

Jer@PaydayLoanUniversity.com
Cell: 702-208-6736

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09
Jan

Payday Loan Store Profits

Have you ever worked at a payday loan store? What are typical payday loan store profits?

Submitted to us by Frank M. from Texas: I’m thinking of opening a franchise payday loan store, but I’m concerned that the company is padding the stats on how much business can be expected. What can I expect for payday loan store profits?

I’m wondering if anyone has ever been a counter clerk at such a place and if you could answer the following questions for me:

  • How many payday loans would you say went through your store per day on average? Of course the answer depends on where the store is located. Downtown Los Angeles will fund more payday loans or car title loans per day than a loan store in Dubuque, Iowa. Competition plays a role as well. I would also advise you to position your store as a “financial service center” offering a plethora of loan products rather than a mono-line payday loan lender.

The AVERAGE U.S. payday loan store funds 133 loans/month. Average fees generated are $61.28 X 133 = $8150.24/month. Add for late fees and NSF fees and the AVERAGE is an additional $956.00 month in revenue for a total of $9106/month gross revenue.

  • What was the average loan size? $383.00 at $16 per $100 loaned = $61.28 in fees per funded payday loan.

The REALITY of the payday loan industry? We have a medium sized 3 year old store in Northern California with generating gross fee revenue of $48,000/month. Store rent is $750/month. We employ 4 part-time employees and 1 full time employee. Very profitable… It’s a collections business. To be successful making money by lending money, you must be good at collections AND monitor employee theft; there’s a LOT of cash!

I would be remiss if I didn’t suggest car title lending as well. In California, we charge 9%/month on the outstanding loan principal to as much as 30%/month. This depends on the customer’s perceived credit risk, the vehicle, the loan principal… Again, VERY profitable. To be clear, a $2600 title loan at the low end – 9% – generates a payment of $234/month and does not reduce the loan principal. Thus, the borrower could conceivably make 6 ea $234.00 car title loan payments and still owe the original loan principal of $2600. Defaults? For us they are less than 1%. No one wants to “lose” their automobile in California!

Finally, why pay a payday loan franchise fee of 8% of your gross revenue for the privilege of teaching you how to start and operate a payday loan, installment loan or car title loan business? It’s not rocket science 🙂 Go to your biggest, baddest future competitor and GET A LOAN. That’s the way to begin.

This strategy and a “million” others are available to you in our “Payday Loan Bible” and our “Car Title Loan Bible.”

payday loan store profits

For more on this topic and all things related to making money by lending money, read our payday loan and car title loan BLOG. And don’t fail to signup for our Monthly Tips, Tactics and Newsletter (your upper right-hand corner of this page).

31
Aug

How to Chase Buyers Away & Get the Lowest Sale Price for Your Business

Selling your payday loan business? Your title loan business? How to chase away most buyers, and get the lowest possible sale price for your business.

Bad record keeping. If your books are a total mess, or your financials are total BS? People aren’t stupid. That’s not going to work. Nobody wants to take on a HUGE liability with the tax man. ***I was working with a business owner that had a very profitable water business. But, the financials showed a $180,000 Miscellaneous expense. That was about 30% of their gross revenue. And they couldn’t explain it. It scared me and I walked from the deal.**

Exaggerated owner perks: You claim your business pays for your car, phones, exotic vacations, several homes, and hookers?? You’d better have clear and detailed receipts for every cent that you’re claiming as an owner benefit.

Claim extra off-the-books income (cash only): No buyer will even consider the “secret cash flow” in their calculations. It’s also a warning sign of fraudulent, improper or even illegal activity. If your business actually has extra cash income, we’re going to address it in a later chapter.

Weird financial performance: Once a business is established, it develops a certain level of inertia. So, year over year, it’s mostly steady with movement up or down. But if each year is completely different, with sales and expense numbers all over the place? That’s a big red flag to a major business problem that hasn’t been solved.

Sales trending down: This is a red flag to a business circling the toilet. Is the management incompetent? Is the product stale?

No sales force: The business is relying too much on existing customers, and/or the time and energy of the owner.

A few large customers: If any customer is more than 20% of your sales, you’re in deep trouble. The loss of a major account can move you from a profitable business to an unprofitable one. (One of my companies won a major contract with a HUGE organization. That account was 80% of our sales for almost 5 years. It was nice while it lasted, but when they moved on, the business was DONE.)

No business or marketing plans: You have to know where you’re going, and your buyer needs to see that you’ve been forward thinking in your operations and business decisions.

Bad, or weak employees: To many businesspeople keep mediocre people, or fail to supervise and train. A buyer wants a strong team that can do the work for them.

First Impressions: At first glance? How does your business look? Does your location smell funny? We cover this in a later chapter.
Bad locations: Does your location suck? Are you hidden from view? Do you have parking? Signage? Good access to supplies/ trucks etc??

Reason for selling: A very common question. If you’re vague, or the reason doesn’t make sense, the buyer is going to run away. I’ve seen situations where the seller changes his story during a conversation.

Are you being a lazy, uncooperative jerk: If you want to sell your business, you’re going to have to be motivated. It’s a lot of work for the buyer and for you. If you’re not willing to jump in and be open and helpful, the buyer is going to walk. Being an arrogant jerk is not a negotiation tactic.

09
Jul

Car Title Loan Profits

Car Title Loan Profits

Every entrepreneur wants to know how much money they can make in the car title loan industry!

Triple digit annual percentage rates (APR’s) are typical for car title loan stores. A  Missouri State Auditor’s Report revealed the average to be 200% to nearly 400%. Illinois approached 300%. Wisconsin averages 300%. Typical fees on a $500 loan are 25% per month; $125 month interest only. These are typical rates for car title loan companies having stores in states having fee caps. When operating in states not having prescribed statutes, you will experience even higher APR’s.

Car Title Loan ProfitsIt’s not uncommon for car title loan stores to minimize their APR calculations by failing to compute them properly. This is not necessarily intentional. Many operators simply don’t know how to calculate an APR correctly. This is not recommended. It can lead to serious problems, particularly after you become extremely successful. You will become a target. Your solution is to invest in vcar title loan management software. Our “Car Title Loan Bible” has a lengthy chapter devoted to this subject. Learn what to look for when choosing your car title loan software and check out all the vendors offering software.

26
Feb

How to Buy or Sell a Payday Loan Business

How to Buy or Sell a Payday Loan Business