Course #1: The Business of Lending Money to the Masses

Complete Table of Contents

How to Start a Consumer Loan Business: Installment lending, car title loan lending, payday loan lending, personal loan business

Your First Steps: 17

Macro View of the Consumer Loan Industry. 19

State of the Consumer Lending Industry. 23

Hang-In There! The Future is Ours!. 30

Flash – It’s a Whole New Business. 33

The Future of the Consumer Loan Industry. 47

EXECUTIVE SUMMARY & the BUSINESS of LENDING.. 56

SECTIONS 1 – 9. 57

CONSUMER LOANS DEFINED.. 58

DEVELOPMENT OF DEMAND.. 59

CUSTOMER PROFILE. 62

THE NUMBERS. 64

REGULATORY ENVIRONMENT. 68

LEGISLATION SURVEY. 70

TRENDS IN FINANCING & VALUATIONS. 70

FUTURE OF THE PRODUCT. 72

The Loan Process: an Overview.. 74

Step-by-Step Procedures. 75

Consumer loan Procedures Step-By-Step Overview.. 75

Telephone Qualifications: Your Most Important Skill. 79

In Your Office, Step 2: 84

How to Calculate the APR Formula. 85

General Tactics. 90

Exhibits. 94

Loan Extension Procedures. 102

Typical Installment Loan Breakout. 105

Title Loans: Overview of the Product & Industry. 106

How Big Is the Title Loan Market. 107

How Title Lending Works. 108

Who Uses Auto-Title Loans. 110

Title Loan Profits. 112

Regarding Title Loan Legislation. 116

Laws & Regulations. 117

Title Loans: Documents You Need. 120

Recording the Title. 123

Title Loan Add On Fees. 126

Title Loans: Repossession. 126

Title Loan Repossession Checklist. 129

Repossession: The Consumers Point of View.. 134

Defaults and Repossessions in Motor Vehicle Transactions. 147

Title Loan GPS, Starter Interrupt Devices – Payment Assurance Devices. 151

How to Value Your Loan Collateral 161

Title Loan Lender Philosophies. 166

Title Loan Lenders Serving Active-Duty Service Members NO-NO!. 166

Title Loan Resources. 169

Detecting Title Fraud. 170

Title Loan Forms. 173

Manloading & Personnel 178

Consumers typically apply for consumer loans as follows: 178

Profits: How Much Can You Make. 180

Sub-Prime Consumer Reporting, ID Validation & Credit Bureaus. 185

Software for the Business of Lending Money. 200

Features & Issues to Consider: 203

Consumer loan Software Vendors. 206

Electronic Funds Transfer (ACH & EFT). 211

Internet Lending: How to & Strategies. 228

How Internet Lending Works. 229

Your First Steps to Reverse Engineer an Internet Lender’s Loan Process. 230

Web Site Development. 233

Choosing a Domain Name. 233

Web Site Hosting. 234

Web Site Development. 235

In-House Development. 235

Out Sourcing. 237

Turnkey Websites. 239

Search Engine Positioning. 241

Keywords and Key Phrases. 246

Final Note on Google’s PPC Policy. 247

More on Pay-per-Click Search Engines. 251

Definitions. 252

Marketing Other Than Search Engines. 254

Affiliate Programs. 254

CFSI Small Dollar Loan Data. 257

Purchasing Loan Leads & Applications. 270

Buying Consumer Loan Leads. 270

Percentage of Applications Funded. 272

Fees to Charge. 272

Email Strategies. 274

Mobile Friendly Web Sites. 277

Faxing of Loan Documents. 281

Collections. 283

Debt Collector’s Phone Communication Required Statements. 291

List of Techniques & Procedures for Your Collection Campaign: In-House Approach. 292

Collection Record Keeping and Data Entry. 292

Typical Collection Letter Template. 300

Taking the Risk Out of Consumer Advances. 301

Collections: Final Thoughts. 301

Extended payment Plans. 302

Consumer Perspective on Collectors. 304

Collections. 306

Collection Letters & Practices. 307

Avoiding the Pitfalls of Debt Collection. 307

Small Claims. 313

ID-Verification Systems. 325

Instant Bank Verification. 327

Selling Your Debt. 329

How to Calculate the True Annual Percentage Rate on a Consumer loan?. 330

The APR Formula. 331

APR for Deferred Presentment Loans. 332

Default Rates. 333

Compliance Issues. 335

Arbitration Clauses. 346

Licensing & Legislation. 350

Current Licensing Models. 352

•      Choice-of-Law Model: 352

•      State-by-State Licensing Model: 352

•      Offshore Model: 352

•      Sovereign Nation: 352

•      Credit Services Organization (CSO) Model: 352

•      Bank Model: 352

•      Creative Models: 352

Scenario 1. 353

Scenario 2. 353

Scenario 3. 353

Scenario 4. 355

Scenario 5. 355

Final Thoughts. 355

Consumer Loan Demographics. 357

Marketing/Branding/Advertising. 359

Craigs List. 366

Tactics & Strategies. 371

Tactics: Niches. 371

Tactics: How to Make Money & Not Fund Consumer Loans. 371

Tactics: Contact Info on Your Web Site. 372

Tactics: Choosing a Name for Your Company. 372

Tactics: Contract Language & Arbitration. 373

Tactics: Additional Web Site Resources. 373

Tactics: Stress the Benefits. 373

Tactics: Make it Easy. 373

Tactics: Repayment Options. 373

Tactics: Gathering Intelligence on your Market. 374

Your Competition: Tactics. 375

Site Selection. 377

Zoning. 377

Criteria for a Consumer Loan Store. 378

Motion Loft: A Tool for Site Selection. 379

Zoning. 381

Leasing Checklist. 382

Site Location Criteria. 384

Site Criteria Table Checklist. 385

Top 10 Do’s. 386

Top 10 Don’ts. 386

Consumer Lending & the Internet. 390

Licensing. 390

Internet Lending Topics. 391

Internet Default Rates. 391

Internet Volume & Capital Requirements. 391

Web Site Marketing. 392

Obtaining your Client Documents. 392

Delivery of-the Funds to the Client. 392

Call Centers & Outsourcing. 393

Prepaid, Stored Value & Reloadable Cards. 395

What Are They?. 395

Consult legal Counsel and the Vendors. 397

Kiosks or Automated Financial Centers. 398

Consumer Loan Product Alternatives. 399

Sales-Leaseback. 400

Cash Back Ad Sales. 403

Catalog Sales. 403

Delivery Document Center. 404

Cash Rebates. 404

Additional Income Opportunities & Traffic Builders. 407

Obtaining Funds for Your Loan Business. 409

Lender Resources. 410

Lender Surety Bonds & Insurance. 412

List of State Regulatory Agencies. 414

Definitions. 420

A Typical Guide to Buying a Franchise. 423

Industry Associations. 436

Legal Resources for Lenders, Check Cashing & Car Title Lending. 439

Business Plan Outline. 442

Excel Business Plan Spreadsheets. 442

Conservative 1st Year Projected Cash Flow: Single Payment Loans. 450

Typical Minimum Equipment List for a Single Payment Startup. 451

I. WHAT IS A BUSINESS PLAN.. 451

II. WHY WRITE A BUSINESS PLAN.. 451

III. KNOW YOUR BUSINESS. 452

IV. BUSINESS TRENDS TO CONSIDER. 452

V. BUDGETING – -HOW AND WHY. 453

VI. MANAGING YOUR BUSINESS PLAN.. 456

VII. SUMMARY. 457

VIII. OTHER CONSIDERATIONS. 457

PERSONAL TRAITS. 457

WHAT DO BANKERS LOOK FOR. 457

YOUR OWN PERSONAL DEVELOPMENT. 457

MARKETING THOUGHTS. 458

Sample Loan Forms. 462

Consumer Loan Document Checklist. 481

Final Thoughts on Launching & Operating a Successful Consumer Loan Business. 511

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