Tag: how to start payday loan business


Payday Loan Metrics & Credit Building

Jer Ayles-Ayler TrihousePayday loan lending transaction volume is booming all over the world! Witness the U.K. lender Wonga (founded by an ex-Google executive). Wonga approved a whopping 2.4 million loans last year, an increase of 300% over 2010.

In addition to the controversy surrounding these small dollar loans and their perceived “high fees” (let’s not get into the costs associated with processing these $300 loans nor the default rates here), mortgage loan lenders are beginning to “frown” on borrowers who have used a payday loan in the past to solve a temporary financial challenge.

This trend is a bad omen for the payday loan industry unless we achieve further inroads with credit reporting agencies – the big 3 – to include consumer debt payment, utility payment, and rent payment history. The Consumer Finance Association’s (UK) chief executive Russell Hamblin-Boone, who leads one of the four major trade bodies that represent the payday loan industry, “Does not think it is fair borrowers with a payday loan are frowned upon by some mortgage lenders.”

“Independent research shows 85% of payday customers have no difficulty repaying their loan, so to decline a mortgage application because a person has taken out a payday loan is an unfair judgement,”  says Mr. Hamblin-Boone.

We at Trihouse are aware that PRBC has done some work in this area and look forward to learning more about their effort. Trends regarding data collection and reporting of consumer payment history and credit building are issues that all of us in the small dollar loan industry are watching. Of course, so is the CFPB :o) For more on this issue refer to Guy Anker’s piece at: MortgageStrategy

Jer – Trihouse


Payday Loan Company EZCORP on the Motley Fool

Rich Duprey at The Motley Fool has an insightful post regarding the future of the payday loan and pawn industry. His post states, “Greater sales volume for merchandise, an increase in same-store-sales and higher fees generated from payday loans allowed EZCORP and rival First Cash Financial Services (Nasdaq: FCFS) to achieve rich results last quarter.”

The point is made that our payday loan customers, like most citizens of the world, are loaded with debt and have no one to turn to but us. Who but a payday loan lender will advance $300 to $1500 with little more than a promise to pay us back. A job and a bank account is all that is required.

Read the full article here; it’s great reading… Rich Duprey & The Motley Fool


Payday Loans – Consumer Federation of America Wake-Up!

The CFA, Consumer Federation of America, continues to misstate facts surrounding the payday loan industry. It’s intentional and unfair. They are a “non-profit” organization whose sole purpose is to place limits on Americans and reduce their financial choices.

The Consumer Federation of America CFA thinks they know what’s best for the rest of us and is composed of a well-funded group of elitists.

A great example of this occurred when Rep. Luis Gutierrez, speaking to CFA President Jean Fox at a House Financial Services Subcommittee on Financial Institutions and Consumer Credit said, “If you wish to be against the bill because you wish us to do nothing other than eliminate payday lending, which anyone reading your statement can extrapolate…that’s not possible.”

CFA President Jean Fox was asked several times by both Democrats and Republicans to offer an alternative to short term, non-collateralized lending. She had nothing to offer. The Consumer Federation of America is simply AGAINST!

Too bad the Consumer Federation of America doesn’t make an effort to understand why consumers by the millions use payday loans and what criteria payday loan businesses implement to determine if a consumer qualifies for a payday loan.

A recent “Position Paper” offered by CFA erroneously makes the point of stating that, “Given the lower bank account penetration rate for minority consumers,  this payday loan product undermines progress being made to unbanked consumers into mainstream financial services.”

Consumer Federation of America WAKE-UP! Educate yourselves first!! Payday loan consumers MUST HAVE BANK ACCOUNTS TO QUALIFY FOR A PAYDAY LOAN! Of course they must have a job also in order to pay us back.


Payday Loan Operators-How to Make Tons of Cash With Your Data

Can you use FREE money? Would you like to make a ton of money with your existing customer data? A ton of money just with your “dormant files” and your non-current customer information?

Your customer data has tremendous value. And there are companies willing to pay you a ton of money every month for this information. You can monetize your customer data at zero expense to you and with no risk of cannibalizing your data.

And there is zero risk of ANY marketing to your data by third-parties!

This is literally FREE CASH FOR YOU!

So…  want to know how this works and what it means in dollars and cents to you and your operation?

Read on…

You, the data owner or Contributor, “park” your consumer data records with “THE COMPANY” via a data transfer to a secured FTP web site. The data is stored using state of the art security to protect all data. “THE COMPANY” scrubs this data against their current database of records. Any data records “THE COMPANY” doesn’t already have in their database are accepted and held in the Contributor’s (that’s you).

When one of the clients of “THE COMPANY” (typically a licensed and bonded debt collector or law firm) performs an authorized social security search for a consumer and they find it in your file and purchase the consumer record from “THE COMPANY”, you share in the revenue derived from that sale.

So… a debt collector has paid “THE COMPANY” for the consumer data that you provided “THE COMPANY” thus enabling you to receive a commission for your data contribution.

Let’s use an example.

XYZ Payday Loan Company dumps 100,000 records into “THE COMPANY’s” database on January 5. “THE COMPANY” reconciles the 100,000 consumer records provided by XYZ and discovers 37,000 of those consumer names are unique and not yet in “THE COMPANY’s” database. (Let’s say the other 67K consumer names were already present having been contributed by other Payday Loan Companies.) So… continuing our example, let’s say for the next 25 days remaining in January, clients of “THE COMPANY” search for 50,000 records of which 75 “hits” come from records previously submitted by XYZ Payday Loan Company.

“THE COMPANY” bills their clients (Collection Companies) net 30 at the end of January for let’s say 75 hits X $20.00/ea. = $1500.00. “THE COMPANY” collects this $1500.00 from their client by March 1 and pays you, the Data Contributor, X% of the $1500.00 collected. Typically, you’ll receive payment about 60 days after your first data contribution followed by monthly cash payments after that.

Benefits to you, the Data Contributor?

Additional revenue by monetizing the consumer data you have anyway! Consumer data from your dormant or denied files and non-current customers; data you have zero use for! Dead data that would not normally yield revenue to you!! FREE MONEY!!!

How it works.

Simple! You simply dump your data at a secured FTP web site. Virtually all file types are can be accepted. Then you make regular data dumps to the FTP site to keep growing your record base. Hot lining the data after the initial transfer usually yields higher returns. Just ask we will explain!

How to Qualify.

You really need at least 50,000 records less than 12 months old. Data records older than 12 months are acceptable but not as valuable. Contact us! Let us know what you have! This program is for both Internet and Store-front operators in consumer related industries.

How to Turn Your Consumer Data into $$$$$$

Send an email to:
Your Name, Phone, Best time to call.
Please include an approximate number of records you have along with the aging. For example: I have 65k records from the last 6 months, 100k records in the 6-12 months age and another 200k over 12 months old.

All information is kept strictly confidential and your company name will never be disclosed as a data contributor.

Does this sound like a no-brainer? Your thoughts? What micro-lending information do you desperately need?

Do you have a  that’s service, product or opportunity that is relevant to our readers?



Future of the Payday Loan Industry-Joint Ventures


1) You’re not simply a payday loan provider, a car title loan lender, a rapid tax refund agent, a check casher, a bill pay processor, a rent-to-own center, a pawn shop… you’re in the micro-lending industry; a giant niche worth billions of dollars annually throughout the world.

2) Embrace the Internet or Die!

3) Joint ventures and partnerships can make a great deal of sense.

4) Canadian affiliate program opportunity.

Read this Newsletter online here:

Although not a new trend, the combination of brick-n-mortar locations with an Internet presence is certain to eventually become the dominate model. We continue to stress this strategy over and over again to our clients for whom we consult and in our own store and Internet businesses.

If you have a physical location(s), why would you choose to be solely dependent on attracting potential clients from a 5 – 8 – 10 mile radius around your store when, with the aid of a little technology, you can service residents of your entire state or province. And it’s not a huge stretch to service an entire country. In addition to actually funding these loans, there are a multiplicity of methods to develop revenue streams from these leads. See: Payday Loan Affiliate Programs

Sure, more than a few of your customers insist on, and are most comfortable, with face-to-face transactions only. But we all know that consumers in larger and larger numbers are becoming more and more comfortable conducting their business via the Internet.

Another trend we’re witnessing is joint ventures between payday loan, car title lenders and other micro-lenders in niches such as installment lending, rapid-tax refund providers, and more.

Let’s get specific…

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Take the recent announcement by BHM Financial Inc. regarding their partnership with The Money Stop.

The Money Stop is a payday loan chain having physical locations in British Columbia and Alberta, Canada.

BHM Financial Inc. is a financing company specializing in secured bad credit loans, installment loans, car title loans, mobile home and RV refinancing; mostly on the Internet.

The strategy for this partnership is that, until their affiliation with BHM Financial, The Money Stop was only able to finance small dollar amounts with short lending terms (payday loans). Because The Money Stop is now offering financing through BHM, they’re able to offer their clients larger loans with flexible rates and longer repayment terms regardless of the client’s credit history. This permits The Money Stop to gain new business they might have otherwise lost due to not having the capability of offering these types of loans.

BHM gains the added business brought in by individuals seeking loans from local lenders in face-to-face-transactions. Until now, BHM Financial was strictly an Internet lender. BHM Financial’s problem was that consumers are not always comfortable applying for a loan online, and BHM has the majority of their application process on-line. The team at BHM Financial felt they were missing out on the opportunity to enter transactions with these non-Internet savvy consumers. Their partnership with The Money Store enables them to service these consumers by allowing them to apply in person with a local lender. Through The Money Stop, BHM Financial Inc. can offer the more personalized, one on one service that BHM found difficult to accommodate via the Internet.

Specifically, why is this partnership good for The Money Stop? Well, as our readers know, the majority of payday lenders (depending on locale) are only able to advance small sums amounting to a percentage of the client’s paycheck. Additionally, repayment was due on the client’s payday with little flexibility in repayment terms. Now, due to its affiliation with BHM, The Money Stop will be able to offer car title loans from $1,000 to $10,000 with flexible repayment terms anywhere from 1 to 4 years in length. New for The Money Stop, these loan products are called car-title loans and they are primarily given to individuals who cannot secure financing through standard financial institutions because of bad credit or no credit. The loans are secured by the borrower’s vehicle and because of this collateral, the loans are funded regardless of the borrower’s credit history.

The Money Stop will continue to offer all of the loans and services they previously offered and will simply add BHM’s car-title loans and mobile home and RV refinancing to their offerings. BHM assures that The Money Stop’s clients will experience the same loan process they have always experienced. Car-title loans can be approved in hours and funded in less than 24 hours and the process can all be completed at The Money Stop’s physical locations.

So… what’s the point?

1) Again, we are NOT simply providers of one or two specific products. Micro-lending is what we do.

2) We must be flexible and creative. Our product lines are evolving. Who knows what our collateralized and non-collateralized loan products will look like in the future.

*******************Got a Product/Service for Payday Loan Operators?************
Advertise here:

3) We need software that offers an easy transition into creative products and services.

4) We need a web site. Even if we start with a simple 3 or 4 page web site capable of simply emailing a basic application. This basic site will allow us to play and experiment with design, traffic generation techniques, and more. A basic web site will help establish legitimacy in the eyes of many of our consumers. You can accomplish this basic goal for as little as $500 in today’s market place. (For more on this email: Websites@PaydayLoanIndustry.com )

5) Joint-ventures and partnerships with companies offering complementary products and services can make a great deal of sense. Combining the brick-n-mortar world with an Internet presence must be accomplished for future survival.

PS: our Canadian readers may want to consider a relationship with BHM Financial as well. BHM Financial Group is expanding throughout Canada and is currently accepting the registration of additional Payday Loan Affiliates.

Become an Agent and earn 10%!

If you are the owner of a Payday Loan, Cheque Cashing, or another type of short-term lending business in Canada, you can now become an agent of BHM Financial and start offering car title loans (loans secured on a vehicle) for $1,000 – $10,000 and earn as much as 10% commission up to $250 per application financed. Become an agent and start offering your clients the convenience of secured loans right from your storefront!