THE BLOG

28
Dec

Mississippi Payday Loan Industry

Borrow Smart Mississippi needs your help in explaining the benefits of alternative financial services (AFS) to regulators and knuckle heads who think they know what’s best for the rest of us.

From BorrowSmartMS.com:

With only a few short weeks before the Legislative Session begins, it’s time to ramp up our efforts on behalf of our industry.  Between now and January 10, you will receive daily email updates.  The email will be very short, so please take a few seconds to read it.  It will often contain an alert for needed action.  When this is the case, please take the time to take care of this immediately.  Once we are in the Session, it will be imperative that legislators receive messages from you in a timely manner.

For now, we are asking that every person receiving this email make contact with your State Representative and/or Senator.  We’d like for you to do this THIS WEEK in the form of a holiday greeting.  You are welcome to use the postcards provided at the Borrow Smart Action Team meetings, or you can use a regular holiday card.  Just write a short message, such as “We at [insert name of business] hope that you and your family have a wonderful holiday season.”  Be sure to hand write the card and sign it.

Please send a return email to this address to let us know to whom you sent the greetings.  If you need Borrow Smart postcards, please let us know that as well.  We’ll be happy to get them to you.

Again, thank you for your participation.

KC Grist

Borrow Smart Field Coordinator
We urge all our readers to followup as the folks at BorrowSmartMs.com suggest!
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21
Dec

Collection Idea for AFS – Payday Loans, Car Title, BHPH, and RTO

I regularly write about the need for Alternative Financial Services (AFS) like payday loans, car title lenders, rent-to-own (RTO), buy-here-pay-here (BHPH) operators and others to evolve and embrace technology. Not only in the types of loans and terms we offer, but also in marketing, software, collections and more.

I know that a large percentage of customers who owe me money DO NOT WANT TO TALK to me! After years in this business, I’ve learned that if I offer my customer a method of paying me off or negotiating with me, WITHOUT having to actually talk to me, they’re more likely to cut a deal.

So… regarding collections, I introduce Debt Resolve – online settlement of debt – a unique way to collect your delinquent accounts. It’s basically an automated bargaining system that provides your delinquent customer the opportunity to make a deal without your having to involve your collections employee in the process. It takes place online and it’s entirely “hands-off.”

Debt Resolve received their 5th patent allowing the Company “a method and system for automated bargaining in a round by round manner.” Debt Resolve, Inc. (Debt Resolve, Inc. (OTCBB:DRSV) provides lenders, collection agencies, collection law firms, debt buyers and hospitals with a patent-protected online bidding system for the resolution and settlement of consumer debt.

Here’s how it works:

Invite: At your invitation, your delinquent customer logs into a website with a personal invitation code – branded in your name – and confirms their contact information.

Resolve: A series of simple-to-use screens is presented to the debtor. For early-stage delinquencies, Debt Resolve offers a quick and easy way for customers to self-cure online.

For late-stage and charged-off accounts, Debt Resolve features a patented bidding process. The debtor gets three chances to submit an offer and settle the account. Based on strategies, the offers are compared to treatments you have set right from your desktop. The customer chooses from payment options made available to them, or makes an offer for settlement or payments.

COLLECT: When the your debtor makes a successful resolution payment, it’s collected using your electronic payment gateways and deposited directly into your bank account. In the event an agreement is not reached online, you can queue up accounts for follow-up using the updated contact information you’ve received online from your customer.

So, worst case you don’t cut a deal with your delinquent borrower but you now have their most current contact, banking and employment information without having to pay your collections employee to work this loan.

As of this writing, budget approximately $750/month for the service for unlimited transactions.

Personal note: as of this writing, neither I (Jer) or my company (Trihouse) has ANY affiliation with Debt Resolve. No commissions, no stock, no nothing! I just think it’s worth looking at.

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For Lenders offering car title loans, payday loans, installment loans, line-of-credit loans... B2C consumer loans.
An analysis of the CAB/CSO Credit Services Organization Model as it applies to Texas. An alternative to the "Regulated Lender Model.

What is a Texas CAB/CSO Credit Services Organization?
In essence, a CAB/CSO or Credit Services Organization is defined by the Texas Credit Services Organization Act (Section 393 of the Texas Finance Code) as an entity or person that provides one of the following services:

* Improving a consumer's credit history or rating.
* Obtaining an extension of consumer credit for the consumer.
* Providing advice or assistance to a consumer regarding the previous two services.

How does the CAB/CSO Credit Services Organization work with consumer loans?
The CAB/CSO Credit Services Organization operates as a broker, The Texas Credit Services Organization Act (CSOA) allows the lender to register as a CAB/CSO and act as a loan broker. Thus, the CAB/CSO can make loans via "3rd Party Lenders" that are UNREGISTERED and UNLICENSED. The CAB/CSO Credit Services Organization acts as a broker for the consumer in need of funds by issuing a "letter-of-credit" on behalf of the consumer to a "3rd Party Lender." This 3rd Party Lender funds the "loan" brokered by the CSO.

How does the Texas CSO Credit Services Organization collect its 3 fees:
A referral fee for referring the consumer to the lender that actually funds the "loan." This is not stipulated by any law but is currently $20 to $30 per $100.
An application fee for filling out the CSO documents; typically $10 per $100.
The interest on the "loan;" Texas state law caps this at 10%/year for the unlicensed 3rd-Party Lender.
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Attend a payday loan bootcamp training Payday Loan, Title Loan, Boot Camp, Installment... Boot Camp -LIVE

Boot camps are run in our South Texas “live” Loan Center
We offer small-dollar loan training
You and one employee/partner may attend
Our "Bible: How to Loan Money to the Masses" is included
These are “one-on-one” intensive workshops customized for your situation and challenges
We cover both the store model and the Internet Model
The fee is $5000 total per company (Including our Bible)
We schedule our Boot Camps in our Texas location to accommodate your Team

Seminar/Boot Camp
2-Days in a "live" Loan Center in South Texas. Includes our "How to Loan Money to the Masses Bible" emailed immediately in Adobe Acrobat.
Schedule a Call with our Founder.

You want to learn how to make money by lending money? You’re fed up spending hours and days with “google search” in an attempt to figure out if small-dollar lending, payday loans, car title lending, and installment loans are profitable?

Talk to an expert!

1] Request a Call; as little as $75.00 for a 15-minute call. Extend the call if you like.
2] Via Clarity.fm, you will be pre-charged for the estimated length of the call, based on our rate of $200/hr.
3] Connect directly with our Founders on the day and at the time you select.
4] Ask ANY question regarding the small-dollar loan industry
4] At the appointed day/time, call the conference line we provide. After our call, the charge will be adjusted to reflect the actual length of our call.

Jer and the Team at Trihouse Consulting have taught thousands of entrepreneurs the correct way to identify, evaluate, negotiate, perform due diligence on, finance, turn-around and operate payday loan, car title loan, and installment loan businesses; the business of making money by lending money. Some people think we’re nuts for doing this, but the truth is that we’re far from crazy. DOING & Teaching opens doors for us that pales in comparison to any other channel.

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17
Dec

I Stole This Simple Marketing Idea

Looking for a quick, simple method to increase your profits? Here’s one I stole from Money-to-Go in Texas.

Visit the auto repair shops in your area. Ask them if they ever have a customer who doesn’t have the money to pay for their car repair. OF COURSE THEY DO!

Auto repair shops are not in the loan business; you are!

So… let them know you have the funds to help their customer AND relieve the manager/owner of that uncomfortable feeling that overcomes them when their customer cannot afford to pay their repair bill.

Action steps:

Call the repair shop. Ask for the manager. Ask them if their customers sometimes have difficulty paying their repair bill. Tell the Manager you have a solution; you have funds available. Explain that you would like 3 minutes of their time tomorrow to briefly explain your funding solution. Simply say, “What’s best for you tomorrow? 11 AM or 4 PM?”

Drop by on the appointed day. Quickly explain, “Our mission is to arrange convenient and easy financing for your customers that have no credit or bad credit. That way they can pay for their transmission repair, brake replacement, body work or any major car repair immediately and get back on the road.” Don’t go into intricate details unless you’re asked. Just make it clear you have a solution for the Manager AND their customer. Leave with their business card.

Leave POS (Point-of-Sale) materials. If you don’t yet have any use VistaPrints.

Followup 3 days later with a color post card, an email and a phone call to thank them!

Revisit the repair shop’s location at least once per month. Leave them a box of donuts!

How much is just one customer from this repair shop worth to you? How many loans per year? For how many years?

DO THIS! Try it for 60 days!!
Need more ideas? Get one of our Start-Up Manuals:
How to Start & Operate a Payday Loan Business
How to Start a Car Title Loan Business
How to Buy & Sell Scrap Gold

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06
Dec

#1 Challenge for Payday Loan and Car Title Loan Lenders

We took a 30 second survey asking payday loan and car-title lenders what their biggest problems are. We’ve received over 1000 responses and continue to receive more daily.

(By the way, this is an ongoing “30 Second Quick and Dirty PDL Survey” you can access here: http://goo.gl/iDX6T This is the link to the Survey Page using the Google Shortener Tool.! If you take it, we’ll share our results with you! Experience of our respondents to this Survey varies from zero to 20+ years. The average is 3.3 years)

Before we reveal the #1 challenge revealed by 1000+ payday loan and car title loan business professionals, here’s a brief rundown of the other top responses to our quick and dirty survey in no particular order:

  • Collection tactics and underwriting and tools
  • Hiring and keeping good employees
  • New products and services that can be added
  • How to generate/buy/sell  Internet leads
  • Access to capital to grow your business
  • Adapting to Government and legislation
  • How to harness the Internet to increase revenues and collections
  • Payday loan and car title loan software selection and issues
  • Finding good locations and accessing their potential for success
  • Developing and maintaining a good quality industry image
  • Developing new business models in addition to the State Law Model, the Choice-of-Law-Model, the Sovereign Nation Model, the Offshore Model, the Peer-to-Peer Model, Installment loan products…
  • Training in all aspects
  • Legal questions about laws, organizing the business, Internet licensing
  • And a hell of a lot more…

So… drum roll please… The #1 challenge  revealed by our readers for help and insight?

“Getting more customers.”

Alright, let’s tackle this issue.  First things first – DEMAND is UP! Yep, hopefully that doesn’t surprise you!

I talk to entrepreneurs in the payday loan industry, car title loan industry and many related  AFS businesses (Alternative Financial Services) everyday. These business people call and email me from everywhere … from the USA, Canada, the UK, Australia, Korea, Africa, Mexico, New Zealand… and DEMAND is up. Customers want and desperately need our product; short-term, no-hassle quick access to small loans.

Sure, our demographics are changing! Potential customers with multiple credit cards and higher incomes  – customers who previously wouldn’t consider us for temporary financial help – are now considering us and actually using us. And many of our past customers are unemployed! Las Vegas has a 15% “official” unemployment rate! The “official” rate in California is 14%; we know among our customers it’s higher! So demand isn’t down it’s just that our customer is changing.

The problem is we’re all going after the same customer in the same ways while our customer has changed. These potential customers listen to different radio stations, watch different TV stations, read different web sites and blogs, drive different cars, read different magazines and newspapers, use Facebook, Twitter and Google … And these customers are applying for our products and services in multiple ways! It’s not uncommon for them to make a phone call, visit a store and apply via a web site! Our customers have “MOVED.”

These customers are more sophisticated. They have better educations with higher expectations. They are more aware of their options and require more attention.

I can’t use this Newsletter issue to discuss every method available for you to get more customers. It’s a HUGE subject and I’ll discuss more in coming issues.  So let’s begin here with one thing you can do to make an immediate impact on your revenues; it’s simple BUT not the easiest tactic to implement.

It’s called HOSPITALITY!

Yeah, that’s correct – HOSPITALITY.

So… what do I mean by HOSPITALITY? Well, as Danny Meyer states so eloquently in his book Setting the Table, The difference between SERVICE and HOSPITALITY is the foundation of success. SERVICE is the technical delivery of a product. HOSPITALITY is how the delivery of that product or service makes its recipient FEEL. SERVICE is a monologue – we decide how we want to do things and set our own standards for service. HOSPITALITY, on the other hand, is a dialogue. To be on a guest’s side requires listening to that person with every sense, and following up with a thoughtful, gracious, appropriate response. It takes both great service and hospitality to rise to the top.”

On a superficial level, “Setting the Table” is a book about starting and running retaurants; some of the best restaurants in the world. But on a higher level, it’s about business and customer service. I highly recommend it to you!

There’s a story that a business man opened a new store in Florida. On the day the business opened, the business owner received a surprise phone call from Gov. Jeb Bush. Gov. Bush thanked the business owner for doing business in Florida and offered this business man a “special phone number” should he ever need anything. Imagine the impact with your new customers if your company used this tactic. And imagine the fantastic feedback and insight you can receive from your customers.

“Hello Mr. Jones. This is Jerry Ayles at San Diego Financial Service Centers. May I take a few seconds to thank you for visiting our store/web site this week.” THEN SHUT UP! Listen! Allow your customer TO BE HEARD! People love for you to show a genuine interest in them. There is no stronger method of developing a relationship with another human being than to display a true interest in THEM and allow them to share their experiences, their stories, and their lives with you.

OK! I know what’s going on in your head right now! You’re thinking, “Is Jer nuts? Does Jer really think I have time for this?”

My answer to you is, “Can you afford NOT to do this?” Time and time again, I’ve written about the life-time value of your customer. Let’s review this quickly here again. Say… 4 loans per year… $300 per loan… $45 in fees per $300 loan = $180/year in fees X 10 years = $1800 total life-time revenue per customer. And these are conservative numbers! Substitute your own fees and average loan amount and the number of years this customer will stick with you.

Isn’t it worth 2 minutes of your time (or the time of a well trained member of your staff) to implement this?

How can you afford NOT to do this? How can you afford NOT to gain unbelievable insight into what’s going on in your customer’s head? How can you miss an opportunity to gain another apostle for your business? How can you fail to ask them for referrals of their family and friends? How can you afford to fail at this simple strategy?

Final thoughts: When you’re fortunate enough to entice a new customer to give you a try you’d better hit a home run with them on their first experience with you. Again, as Danny Meyer’s writes, “Your goal MUST BE to earn, regular, repeat patronage from a large number of consumers.” AND don’t think I mean putting them on a path to the so-called “cycle of debt.” I simply mean earning their trust and respect as they become acquainted with, and actually use, a variety of the products and services you offer in your financial service center.

Now another thing YOU MUST DO! Get your customers email addresses, Facebook accounts, twitter accounts… Ah!!!!!!!!! This thing is too LONG ALREADY. Next time…

As others have said, “Excellence is a journey, not a destination.”

Meanwhile, WHAT DO YOU THINK? Comments, suggestions, your ramblings are DEMANDED ?

Jer@PaydayLoanIndustry.com

Jer@AutomobilePawn.com

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