Start a Payday Loan and Installment Business
Payday loans, title loans and installment loans. The business of making money by lending money.
Welcome to one of the fastest growing businesses in, not only the United States, but Canada, Australia, England, New Zealand, South Korea, China, Brazil, Latvia and more. The payday loan industry was virtually nonexistence in 1990. One payday loan group estimates over $42 billion dollars in payday advance revenue will occur this year. 100 million transactions will occur. 14 million households will be served. The Tennessee Department of Financial Institutions reported to its legislature that licensed payday lenders earned over 30% return on investment in the first nine months of legal operation. Stephens Research, a well-known investment banker, forecasts a potential mature market for 18,000 stores generating $6.75 billion in fees annually this year! We estimate there are currently 40,000 people employed in the industry with $1.1 billion in wages paid by payday advance employers.
Due to the mergers and acquisitions transpiring in banking, the mobile phone revolution and the passage of new consumer finance and credit laws, there has never been a better time to enter this industry. Banks, credit unions and credit card companies are literally "driving" their customers to payday loans and car title lenders
The bank branch on every corner is a thing of the past. It's difficult to find branches in the inner city. They have been moving to the suburbs where the money is. With the increase in direct deposit, check cashing companies like ACE are looking for new profit centers. Additionally, high bank fees are driving this business. According to the latest national surveys, the average bank charge for a NSF check is $35. That is for the first check. Of course, the original recipient of the check will charge a fee also. If a check writer were to bounce checks for $30, $35, and $41, bank charges could easily exceed $60 to $80 or more. If a check writer is aware of our services, they will realize it is in their best interest to use us. In California for example, at a rate of $15 per $100, this check writer would save at a minimum $45 with their bank and whatever fees the check recipients charge. A payday loan is their best choice!
You may be surprised at the number of persons unable to manage their finances. Thousands of people in your area find themselves a dollar short before their next payday. The number of consumers with damaged credit is increasing dramatically. A payday advance is the answer for them. Banks and credit card companies are reducing credit and credit lines to their customers.
The rates we charge are no longer much of an issue today. The real attention is given to our ability to correctly disclose our fees and adhere to all the appropriate truth-in-lending laws, UCC codes, APR computations, CFPB, etc. Our Payday Loan Manual will help you address these issues.
Losses? It’s part of the payday loan business. But they can be kept to a very minimum. Less than 2% is easy if you do not break your rules and your underwriting criteria is conservative. 4% to 8% is quite normal. Default rates for Internet oriented operations will be higher. Our Payday Loan Startup & Training Manual (more info)covers this subject thoroughly.
Starting capital? Whatever you have available. The average payday advance (PDA) is $385 and rising. If you're inexperienced as a payday loan lender, we suggest you would tie up no more than $200 for 8 days for your first-time customer. You ACH or write a check for $175.95 for their check in the amount of $217. That is an annual percentage rate in excess of 800%. Its obvious tremendous returns are possible! Again, our manual (more info)covers the mathematics completely.
Legislation? Most jurisdictions have enacted legislation regulating (PDA) or “deferred presentments." This is another reason for the growth in the paydayloan/installment loan industry. In California for example, there was no money to be made in this industry until B1959 was passed in Sept. of 1997. With its passage a new industry was born. Approximately 38 states have enabling legislation today.
We find this situation throughout the U.S, Canada, Australia and more. Note that every locale is different. Our Manual (more info)stresses that you must make every effort to educate yourself regarding the laws of your geographic location. Currently we know of operations in the majority of the USA plus Canada, Australia, New Zealand, Costa Rica, Barbados, the Virgin Islands, England, South Korea and more.
The Payday Advance industry is following the same strategy as the rent-to-own industry and the bank/credit card industry. That is, hiring the very best legal minds, forming self-policing industry trade groups and PACs to pass enabling legislation.
Demand for our product continues at an incredible rate! As more consumers become aware of our product this growth will continue to explode. These consumers, in addition to those employed in our industry, are voters. Legislators recognize this and will continue to pass appropriate laws. Of course the legislators also recognize the significant licensing fees, taxes and employment income generated by our industry. The few states that do not have enabling legislation are being pressured by the internet, tribes and call center models. Additionally the regulators are forced to reassess their laws because they are bordered by states and provinces in which the regulators have embraced the payday loan product! Thus they force their residents to deal with internet and out-of-state call center operations.
Our Training Manual (more info)will enable you to participate in this exciting opportunity. You can utilize a 6’ by 6’ area to earn a tremendous income. Or, add this profit center to an existing business. Not only will you derive additional revenue but also your customers can participate in both your businesses.
Our Payday Loan Startup & Training Manual (more info)covers all aspects of the business including store and Internet models, day-to-day operations, pre-qualifying applicants, customer demographics, controls, tactics, strategies, forms, minimizing losses, software programs, collections, equipment, sub-prime consumer databases, walk-in trade, etc.
Trihouse Consulting
601 E. Charleston Blvd.
Suite 100
Las Vegas, Nevada USA 89104
702-208-6736 Office
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