Category: Profits


Payday Loan Industry Profits: Pre Corona or Post Corona

How profitable is a payday loan business?

It depends! (You’re not surprised, are you  🙂

  • You’re funding payday loan customers online?
  • You’re using the storefront lending model?
  • A blended payday loan model? Both store[s] & the Internet?
  • You’re using a State licensing model? If so, your State regulatory authority – typically the Department of Financial Institutions – will determine what fees you can legally charge.
  • You’re using the tribal model? You can create one loan product and offer it in any State you choose. [Get legal advice or reach out to us to explore. Tribal Lending]
  • Your underwriting vendor
  • Your payment processing vendor?
  • Your text messaging provider.
  • Your LMS [Loan Management Software] provider
  • And dozens of other expenses. Just like any other business.

Here are a few examples of the legal payday loan rates and APR’s for a few states:

How to Start or Improve a Consumer Loan Business: Storefront or Internet anywhere!

Click the image to Start or Improve a Consumer Loan Business: Storefront or Internet anywhere!

California: A payday loan costs approximately $17.65 per $100 borrowed. For example, a $100 loan due in 14 days would have a total repayment amount of $117.65 and has an APR (Annual Percentage Rate) of 460.16%.* Moneytree, Inc. is licensed by the Department of Business Oversight pursuant to the California Deferred Deposit Transaction Law to make consumer loans.

Colorado: The number of payments will vary based on the loan amount, the number of payments, and the length of the loan. Using a $500 loan with a 10% acquisition charge and a 98-day loan term as an example: A $500 loan would cost $595 which includes finance charges of $95, consisting of the acquisition charge and three installment account handling charges, and is based upon you agreeing to make seven payments of $85 due every two weeks, with an APR (Annual Percentage Rate) of 118.25%.*

Idaho: A payday loan costs $16.50 per $100 borrowed. For example, a $100 loan due in 14 days would have a total repayment of $116.50 and has an APR (Annual Percentage Rate) of 430.18%.*

Nevada: A payday loan costs $16.50 per $100 borrowed. For example, a $100 loan due in 14 days would have a total repayment of $116.50 and has an APR (Annual Percentage Rate) of 430.18%.*

Washington: A payday loan costs $15 per $100 borrowed up to $500 and $10 per $100 on the amount over $500. For example, a $100 loan due in 14 days would have a total repayment amount of $115 and has an APR (Annual Percentage Rate) of 391.07%.*

Obligatory Payday Loan Customer Notices:
Payday Loans, High-Interest Loans, and Title Loans should be used for short-term financial needs only and not as a long-term financial solution. Customers with credit difficulties should seek credit counseling before entering into any loan transaction.

*The Annual Percentage Rate (“APR”) is the cost of your loan expressed as a yearly rate. The actual APR for your loan may be higher or lower, depending on the actual amount you borrow and your actual repayment schedule.

PAYDAY LOAN PROFITS ROUGH RULE OF THUMB: You’ll gross 20% to 30% on your loan portfolio monthly. Some operators do better! Some do worse! Like I say, It depends!

Texas Payday Loans. [I’m going to keep this REALLY SIMPLE. I could write a 500+ page “bible” about this topic and the real-world metrics! Oh, wait! I did! 🙂 So you old school loan sharks reading this DON’T FREAK OUT on me!]

Let’s use 25% gross. If you reinvest all your profits back into your business and achieve an average-sized portfolio in a typical geographic area in a favorable state like Texas, you might gross $62,500 on a $250K portfolio. [“Street Money.”] Your $250, 000 payday loan portfolio would likely consist of  416 borrowers averaging $600 loans. Typically 60% to as much as 80%+ of your borrowers will simply pay their fee [in Texas that would be $20.00 X 6 = $120] and still owe you the original payday loan of $600. And of course, those who do pay their loan off in full will return again and again and again. It’s simply human nature. Since the beginning of time!

NOTE: For perspective on this theme, read “Debt: The First 5000 Years” and/or “The Ascent of Money.” [Full disclosure: Amazon links.]

So, it’s easy to understand how a payday loan operator can grow $50K cash “for the street” into a $250K portfolio spinning off $$60K+ per month gross. Two $11/hour employees can EASILY run this show IF you follow the instructions in our “bible” and implement our strategies while working with the vendors and 3rd party providers we introduce you to.

THIS AIN’T GONNA BE EZ! You’ve got to compete against some savvy Wall Street, VC’s, Fintech,,, hard money, smart money folks to compete in this money lending industry! Luckily for entrepreneurs driven to participate, this digital revolution has enabled small-time operators and investors [reach out to me] to participate if they’re willing to work, listen, and learn.

Ready to begin?

Tired of investing hours “Googling” your path to learning how to launch a consumer loan business online or via the storefront model?  Did you know a Lender can operate a “Consumer Loan Financial Service Center” offering payday loans, car title loans, installment loans, line-of-credit loans… from ANYWHERE? You can be in rural Idaho or downtown Miami and own and operate a legal consumer loan business in California, Texas, Florida… pick your poison!

Corona? Not relevant! B2C loan companies can EASILY acquire, underwrite, process, fund, and collect via a smartphone. Corona simply accelerated the movement to the digital delivery of EVERYTHING. Especially MONEY! And toilet paper.

“The Business of Lending to the Masses” will not abate. It’s in our DNA!

Ready to be a Loan Shark?  CLICK THIS LINK TO BEGIN

How to Start a Payday Loan Company

How to Start a Payday Loan Company




How to Open a Loan Business-Why Buy Instead of Start #17

Why You Should BUY, Rather Than START, a Consumer Loan Business

Fact 1: Since the beginning of human existence, average Joe’s have been bartering, borrowing, stealing, begging, and trading time… for MONEY/STUFF.

Fact 2: We have been, and always will be, a society of Debtors and Creditors. This sucks but it’s a fact. [For a great listen while you’re getting in your daily exercise, get the audio version of David Graeber’s, “Debt: The First 5000 Years.” It’s a fascinating book about the impact of debt on history.]

Storefront, Internet, kiosks, blended… Money Lending can be VERY PROFITABLE.

So… why buy rather than start?

Startups fail. Almost always.

10,000+ “Baby Boomers” are turning 65 EVERY DAY! Many Boomers made their money by lending money. Boomers kids & grandkids do not want to be in “the business of lending money to the masses.” Frankly, the family members of Lenders are OFTEN embarrassed by this business. Right or wrong, this theme is prevalent in our industry.

The Boomer generation owns more businesses than any other generation in HISTORY!

Boomers need to sell. I know this because I receive calls and emails every week from them.

Existing consumer loan stores and internet companies already have the infrastructure in place. They’ve built out their store, maybe they have a website – most of them look like garbage and do not generate loan transactions, they have experienced employees in place, loan management software, relationships with the sub-prime credit reporting agencies and payment processors that enable instant bank verification and same-day funding… In other words, they are LENDING TODAY! You don’t have to waste 90-120 days to put your money to work! HUGE!!

Consumer loan companies already have a database of existing borrowers. This too is HUGE! You really think you can open up a brand new location or launch a website and immediately take market share? You had better have the skills in place already! You will buy leads!

Consumer loan businesses already have historical financials. Examine the cash flow. Break down the numbers. Your 1st look will mimic an IRS tax return. Your goal is to determine the “Seller’s Discretionary Earnings.”

There are not a lot of buyers for these businesses.

YES, you can make a “ton” of MONEY.

Yes, in 33+ states you can charge as much as $30 per $100 loaned. A few states have zero prescribed maximum fees; like Texas.

Tribe lenders and their servicers can lend anywhere they choose. [But why push the envelope?]

Your inventory is moola, cash, $$$$, MONEY! You’re not investing in vegetables, tires, senior care facilities, selling real estate like millions of other agents, making donuts and coffee at the crack of dawn, knocking out burgers, running a 24 hour 7-Eleven, dealing with gym memberships, fixing cell phones or computers, a “Merry Maids” cleaning service… YOU GET THE PICTURE!

Other than the business of lending money, what other industry offers you the potential of earning a 100%+ ROI?

Perceived “moat” or “Barrier to entry.” Looking from the “Outside In,” the business of lending appears to be an overwhelming chasm of licensing, bonds, regulations, bad press… GOOD! Let everyone else start a yogurt shop! Look! Total knuckleheads have applied for and been approved for a state license to loan money. Peter Thiel [PayPal Cofounder] wrote an excellent book called “Zero to One.” He focuses on “economies of scale” and advises, “First, dominate a niche market; second, scale up.” I have a client who focuses on Haitians in Florida and is “killing it!” Another client specializes in lending to Koreans in Los Angeles. Do you know that “baby boomers” make up 37% of the US demand for short-term loans? “You don’t want to be the first mover. It’s better to be the last mover  – that is, to make the last great development in a specific market and enjoy years… decades of profits.” Launch, Focus, Dominate your Niche and then expand into related, broader markets. Who doesn’t need MONEY?

You can bring your existing talent, knowledge & strengths to a “tired” loan company, replace its long-time owner, and create extraordinary value.

MANY existing owners are simply tired of being beaten up by the media, regulators, competitors…

The majority of the consumer loan businesses for sale today were launched years ago. A fresh mindset injecting new energy and enthusiasm is OFTEN ALL that is needed to 5X the marketable value of the acquired loan business!

Done right, the cash flow of the business can service the debt carried by the seller. They do want to sell their business after all!

Don’t focus on stupid valuation formulas postulated by generalists; 2X or 4X or whatever EBITDA for example. These are lazy, cop-out valuations! Hint: think “seller’s discretionary income [SDE].” Simply put, SDE is how much total cash flow the seller has been enjoying. [Don’t take the P & L at face value. The business is paying for the Mercedes, the kids phones… A motivated seller may exit at 1X SDE. You grow it 10%/year for 5 years? A 5X+ SDE is achievable! Add your inventory – which is $$$, CASH, MONEY… not rotting bananas, remember! You’ve just built a tremendous asset for yourself. [Shameless Plug. Grab a copy of: “A Guide to Consumer Loan Company Valuations.” [Scroll down to the 9th item.]  

By employing today’s technology, you can operate a loan business from ANYWHERE.

Skip the startup B.S!

Why start from scratch?

Why duplicate?

Buy, grow & innovate. Acquire. Grow revenue. Increase profits. Build an asset.

Grow your business 10% every year for 7 years; it will double in size! Your cash flow increases. The value of your asset increases. You build wealth.

Remember Fact 2: We live in a world of Debtors and Creditors. This sucks but it’s a fact. Money Lenders will always be with us. Be a Money Lender NOT a service provider, a vegetable purveyor, a burger franchisee, a _____fill in the blank!

Are you a BUYER? Are you a SELLER? Have an IDEA, a TOOL or a SERVICE for Lenders? Talk to me…

YOU control your Life. YOU control your future. Follow the MONEY! Be the MONEY!!

I’m inundated! Tell me about you, your goal and your resources. I’ll connect you! I know of opportunities TODAY in PA, CA, TX, TN, AZ, VA, IL, Internet… Tell me about you! I can help. PS: Skip the “Google” searching. You will not discover great “deal flow” on This is about relationships!  If the deal is on an Internet Biz listing, it’s junk. YOU NEED TO GET UPSTREAM!

Want to learn more? Have an idea? Want to share…” Reach out to me via my online form.

Definitions: In this discussion, Consumer Loans mean:

  • Payday loans
  • Installment loans
  • Car title loans
  • Cash advances
  • Personal loans
  • Essentially, loans made to consumers that do not require collateral; other than a car title loan
  • We can throw check cashing businesses in this bunch as well.

Elephant in the Room: Consumers Use Payday Loan Products to Avoid NSF Bank Fees!

Banks and Credit Unions Force Consumers to Use Payday Loan Products!

The debate so-called “consumer advocates” [not really advocates at all; more anti-business and anti-capitalism] and payday loan advocates get into is stupid! Particularly since these anti-free market folks are peering into our financial products industry from the sidelines.

Do YOU really think banks and credit unions give a crap about their sub-prime customers? Do YOU comprehend that the majority of bank and credit union profits are generated by NSF and other mickey mouse fees they pile on consumers? Do you know who REALLY FUNDS anti-small dollar loan alternative loan products in an effort to eliminate their competition? Do you know that Google funded a payday loan company and then SLAMMED the door to payday loan product advertising on Google? The same Google whose mantra is, “Do No Wrong!”

Other than Professor Lisa Servon, who had the juevos to actually work behind the counter of a RiteCheck in the South Bronx and a payday loan lender in Oakland, California [The Unbanking of America: How the New Class Survives], these people have no clue about the financial needs and measured choices our payday loan, installment loan, and car title loan borrower must make every day.

The misunderstanding about our  loan  fees is a result of the lack of knowledge about WHY payday loan borrowers CHOOSE our payday loan, car title loan and installment loan products to solve daily financial challenges. Our alternative loan products exist simply because of bank and credit union non-sufficient funds [NSF] Fees.

Nobody “gets” the “business of lending money to the masses” with more thought and empathy than those of us who are on the firing lines, talking and counseling our customers every hour, every day!

Want to see the numbers?

Lets examine the APR formula from a payday lending perspective:

APR = (charge/term) * 365

This APR formula breaks down the APR component to a daily figure and then multiplies that calculation to the annual percentage rate [APR]. This isn’t an amortization formula. That is for our installment loan products.

Principle: $100
Interest: $20 dollars per hundred
Term: bi weekly

APR = (20/14) * 356 = 521%

We all know these are relatively static numbers in our industry. The majority of  states have regulated payday loan fees to approximately $15  per $100 loaned to consumers. Of course, there are exceptions; Texas is but one example.


Let’s examine a typical NSF/overdraft bank/credit union scenario.

After my 20+ years working with payday loan customers, I’ve learned that the MAJORITY of our customers seek a payday loan product in order to avoid overdraft charges. Because overdraft charges tend to be charged on a per transaction basis, here is an example of what a typical customer would experience when they overdraft $100 dollars from their bank.

Check Amount      Bank/Credit Union NSF Charge         Balance
$20                                   $35                                                -$55
$40                                   $35                                                -$130
$30                                   $35                                                -$195
$10                                    $35                                                -$240

Overdraft Amount: $100
Bank/Credit Union NSF/Overdraft Charges: $140
Balance: -$240

This is a REAL example. We make payday loans, installment loans and car title loans for customers who overdraft 5 – 10 times on a single $100 balance. Customers come to payday lenders because they easily determine that they are actually SAVING money by employing our alternative loan products to solve their financial challenges.

Put yourself in our borrower’s shoes.

How much would you prefer to pay in fees to borrow $100.00? $140 from your bank? Or $15 to $25 [depends on your state] from us; your friendly small dollar loan provider who is available 6 days per week at a minimum and has store hours enabling you to get off work and visit our store at a time that is convenient for YOU, the borrower.

Banks and credit unions get their money back in LESS than 2 weeks. After all, the borrower’s bank is at “the front of the line” to the borrower’s checking account. The bank takes their money FIRST! Zero risk!! A lot of banks charge a daily fee if your bank account is in the negative. With all that to think about, let’s be CONSERVATIVE and say the bank gets their money back on the next paycheck. And lets forget about that daily negative balance charge.

Here is what the APR formula for a bank “NSF loan”would look like:

Bank/Credit Union APR = (140/14) * 356 = 3650%

3650%!! Are you kidding me?

And, this ignores additional HEAVY financial factors – the shorter term, the daily negative balance charges… If we calculate those figures into the bank’s APR, we’d be looking at a 10,000% APR!

Ladies and gentlemen, regulators and politicians, it’s time to understand that there is absolutely NO DIFFERENCE between the interest we charge and the “overdraft charge” that banks pocket EXCEPT FOR THE FACT THAT PAYDAY LOAN PRODUCTS ARE CHEAPER AND SMARTER for the CONSUMER! At the end of the day, both scenarios are exactly the same: interest on money loaned.

The only difference is the price: 521% APR for a payday loan versus 3650% APR for the bank.

Don’t believe my numbers because you think I’m biased?Overdraft fees have reached their highest level since 2009, which was at the end of the Great Recession. Consumers paid $34.3 billion in overdraft fees during 2017 compared to $33.3 billion in 2016, The New York Post reported.Mar 29, 2018.”

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

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Banks boast that their interest rates are around 8% APR, but do our customers have access to them? Show me a bank that will hand out a $300 loan at 8% APR to someone who has a credit score in the 400 – 500’s and I’ll place you on the lap of Santa Claus. It won’t happen because it’s simply not profitable for banks. The reality is that banks boast about their 8% APR loan which are made ONLY available to the rich (with perfect credit scores), while secretly charging the middle to lower class customers more than 2000% on small loans.

The fact is, the majority of society is in the middle class to lower class income bracket today. They need 3 “gig jobs” to live with a roommate, deal with their student debt, make their car lease and EAT. Banks don’t make nearly as much by lending to the rich; APRs are too low and the probability of them paying back the bank is nearly guaranteed.

Banks make the MAJORITY of their money on NSF/Overdraft charges. In a society which lives mostly from paycheck to paycheck it is almost a sure thing that everyone will overdraft their bank accounts once or twice a year at minimum. But that is a whole other subject.

Want to learn how to help consumers avoid these crazy high bank and credit card fees?

Want to learn “how to lend money to the masses?

Invest in our quarterly updated “bible” of lending, “How to Lend Money to the Masses Course.” We reveal everything you need to know. Installment loans, car title loans, payday loans, licensing, contracts, location, software, how to begin, collections, underwriting, phone scripts… Here’s a link to our “Table of Contents.” Instant download in Adobe Acrobat PDF.

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

Click This Image for Some Light Reading 🙂 Over Your Weekend!

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How to open a loan business How to start a loan company
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If you're worn out spending hour upon hour searching Google for consumer loan business strategies, know-how, software, licensing, consumer credit reporting, sample contracts, collection tactics, profitability, how much start-up capital you need, anticipated default metrics, and on and on and on... Our "Bible" delivers ALL THESE ANSWERS AND MORE!

How to loan money to consumers! Payday loans, car title loans, installment loans, line-of-credit loans... via the Internet and storefront models.

Answers to:
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We update our "Bible" every 3 months.

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Our 500+ Page Manual

Topics covered:
Profits: Consumers pay $10 - $35 per $100 Borrowed

How to launch a consumer lending business
Payday Loans
Small Dollar Loans
Installment Loans
Car Title Loans
Personal Loans
Signature Loans
Non-Secured Personal Loans
StoreFront Lending
Internet lending
Licensing? State/Province
What loan management software to use?
Capital required?
Collections? How to Collect Your $$
Borrower Underwriting? 3rd Party Credit Reporting Agencies for the Sub-Prime
Store & Internet Lending tactics & strategies
Sample contracts, License apps...
Tribe Model: How to Partner with a Native American Indian Tribe
How to Deliver the $$ to Your Borrower [ACH, Debit, Cash, Checks...]
Texas & Ohio CSO/CAB model
Marketing, Branding, Advertising: How to Put Your $$ to Work
Leads: Buy $2 leads or $200 Leads?
Web Sites: Why You Need Them. How to Get One Built Inexpensively. Mobile-Friendly...
Site Selection: Where to Put Your Loan Store
Default Rates: How Many Borrowers Will Fail to Pay You
Email Strategies: How to Build Your Own List
No More Faxing...
How do You Raise $$: Cost of Capital Today
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How to Operate a Texas CAB?CSO Loan Biz

$197.00 How to Operate a Texas CAB?CSO Loan Biz

CSO Credit Services Organization Report (Texas)

An analysis of the Credit Services Organization Model as it applies to Texas. An alternative to the Payday Loan Model.

What is a Texas CSO Credit Services Organization?
In essence, a 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 CSO Credit Services Organization work with payday loans?
The CSO Credit Services Organization operates as a broker, The Texas Credit Services Organization Act (CSOA) allows the payday loan lender to register as a CSO and act as a loan broker. Thus, the CSO can make loans via "3rd Party Lenders" that are UNREGISTERED and UNLICENSED. The 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.

Our 100+ page "Texas/Ohio Credit Services Organization [CSO] Report" includes a thorough description of how this model works, how to construct the loan entity & the CSO, sample agreements between the CSO and the 3rd Party Lender, sample consumer contracts & more.

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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
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These are “one-on-one” intensive workshops customized for your situation and challenges
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The fee is $5000 total per company (Including our Bible)
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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.
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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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Consumer Loan Business-Payday-Loan-Pro-Forma-Excel-Spreadsheet

Consumer Loan Business/Payday Loan ProForma Excel Spreadsheet

Consumer Lending > Biz Plan Excel Spreadsheet Pro Forma

Internet/Storefront Lender Excel Pro Forma
Every startup entering the consumer lending/payday loan industry needs our new "PDL Excel Spreadsheet Pro Forma." We had our analytics gurus build this tool. With it, you have the ability to "play" with multiple inputs including lead costs, default rates, loan conversion rates, number of loans funded daily/monthly, average loan principal amount, fee charge per loan principal, rollovers, employee costs, overhead expenses...

We provide a solid foundation with which you can start. Then, you change the variables based on your "secret sauce." We guarantee our "Consumer/Payday Loan Pro Forma Excel Spreadsheet" will blow you away with its power to enable your Team to "see into the future."

There is nothing like this tool on the market today. We've invested our 20+ years of payday loan knowledge and experience as a Lender in this tool. You simply cannot get access to anything like this tool unless you bring serious consumer/payday loan experience and Excel experts to your "game." For both storefront and Internet consumer facing lenders.

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A Guide to Consumer Loan Company Valuations
Valuation Approaches and Considerations for Buyers, Sellers and Startups of Check Cashing, Payday, Title, & Consumer Loan Companies. Thoroughly covers payday lending, car title lending installment loans... consumer loan business valuations. Delivered immediately to your Inbox.

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How to Collect Your MoneyHow to Get Your Money

What can be worse than not getting paid? Getting sued, or FINED by Government agencies.
There are regulations at the Federal and State level that are created to protect the public from unsavory collections practices. As you work to collect your money, keep in mind that the courts have a mandate to take the side of your non-paying client. Even if this person has cursed you up and down, written you bad checks and lied to you every day for 10 years?

None of that matters. The courts and the law are created to protect the public. Not you or your business. If you go into a collections procedure with an attitude, and crappy documentation, you’re going to get run over by the system and it’s not going to cost your deadbeat customer a cent.

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How to Launch a Tribal Lending Enterprise

How to Launch a Tribal Lending Enterprise

Tribe Sovereign Nation Documentation, Term Sheets & More

A complete package of all the legal documentation required by tribes, lawyers, investors, marketer/servicer groups... to successfully launch a TLE.

Note: All Word Templates are editable for your private use.

  1. Template-Standard Tribe Resolution Creating a Tribally Owned Business


  2. 3 year Pay Day Lender Loan Volume Projections

    1. (PDF Doc.)


INTRODUCTION: [25 page PDF by Bree R. Black Horse J.D. candidate at Seattle University School of Law, and an enrolled member of the Seminole Nation of Oklahoma in cooperation with The American Indian Law Journal. Public Domain]

  1. Two Key Tribal Court Cases:

    1. While there have been many, many cases upholding tribal sovereign immunity over the years, two, in particular, are specific to tribally owned payday loan businesses. [4 page PDF]

  2. 3 Year Proforma.

    1. A 3 year tribe pro forma portfolio [Excel format]

  3. Boilerplate Marketing & Servicing Agreement

    1. Template for TLA & Marketer/Servicer arrangement with Revenue Share Exhibit A. [12 page Word Doc.]

  4. Consulting Agreement

    1. Template Consulting Agreement with Tribe Lending Enterprise [Word Doc]

  5. Resolution


  6. Car Title Boilerplate Agreement

    1. Example Marketing/Servicing Agreement with TLE [11 page PDF]

  7. Car Title Consulting Agreement

    1. Typical Consultant/TLE agreement specific to car title loan lending [6 page PDF]

  8. Typical Lenders Introduction and Compensation Agreement

    1. Example Tribe/Consultant introduction & revenue share term sheet [5 page PDF]

  9. Example Monthly Payments-Revenue Share Agreement

  10. Typical consultant – TLE revenue share statement [1 page PDF]

  11. Example of Typical Non-Recourse Promissory Note & Security Agreement

    1. Ordinary Borrower/Lender capital security agreement [4 page PDF]

  12. Lawyers' View: Minimizing Regulatory Enforcement Actions Against TLE and Service Providers

    1. Important Factors in a Tribal Lending Relationship [3 page Word Doc]

  13. Frequently Asked Questions Regarding the Mechanics of TLE-TOB/Marketer-Servicer Collaborations

    1. Allen Parker responses to FAQ’s submitted by potential consultants, tribes, and providers of capital. [2 page Word Doc]

  14. Typical TOB Lenders’ License

    1. [19 page Word Doc] A financial services license authorizing the TOB to do business “THIS IS TO CERTIFY that, consistent with Section 4 of the Mahalo District of the North Dakota Tribe Tribal Financial Services Regulatory Act, the enterprise under the jurisdiction of the Mahalo District of the North Dakota Tribe has been licensed by the Mahalo District of the North Dakota Tribe’s Tribal Financial Services Regulatory Commission to provide financial services in furtherance of the Tribe's economic self-sufficiency and political self-determination. It is…”

  15. Example Consultant- Lender Representation Agreement Boilerplate

    1. As titled, an example Consultant retainer/representation agreement [2 page Word Doc]

  16. Example Consultant- Lender Representation Agreement Boilerplate

    1. As titled, a template for consultant –services/marketer agreement [1 page PDF]

  17. Example Declaration of Servicer-Marketer Skill Set Submitted to Tribe

    1. As titled, a sample declaration to tribe regarding servicer/marketer skill set [1 page PDF]

  18. Template for Statement of Consultant-Servicer-Marketer Power Point Presentation to Interested Parties

    1. Editable Power Point presentation [12 page PP]

  19. Typical Tribe/Servicer/Marketer Credit Reporting Business Rules

    1. As titled, a phenomenal Excel list of go/no-go CRA implemented business rules [Excel 10 pages]

  20. Template for “Finders’ Fee”

    1. As titled, editable Finders’ Fee for use by Consultants [2 page Word Doc]

  21. Template for “Finders’ Fee”

    1. As titled. A second version of a Finders’ Fee

  22. Example Business Development Agreement

    1. As titled, editable template for business development agreement between TLE & Consultant [5 page Word Doc]

  23. Term Sheet

    1. As titled. [4 page Word Doc]

  24. TLE-Lender-Services/marketer Bank & Loan Flow Chart

    1. As titled, an visual of “how the money flows.” [1 page PDF]

  25. “Tips for Tribe Economic Directors”

    1. As titled, a public domain analysis for tribal economic development principles. [9 page PDF]

  26. Limited Solicitation RFP

    1. A typical Request for proposal submitted by TLE’s [2 page Word Doc]

  27. PDL Sovereign Nation Manual by Allen Parker

    1. An analysis of the TLE Model [8 page PDF]

  28. Your investment: $1995.00


This is Probably a Bad Idea… I Own a Payday Loan Company.

A Seriously Savvy, Experienced Payday Loan Lender Answers Direct Questions About the “Business of Lending Money to the Masses!”

[Jer Trihouse: To be clear, this is not my work! I just discovered this Q & A on an old Thread. Also, you’ll quickly figure out that this payday loan lender has navigated ALL the hoops, challenges and costs of securing a state license. So… like any of us who use the state licensing model, WE HATE TRIBAL LENDERS.]


Whether you’re a lender, a collector a borrower, a scrubber, a loan management software company, a state licensed or tribal lender… YOU WILL LEARN FROM THIS! [Lender Resources]

Question: Do you have trouble sleeping at night?

Payday Lender: Not even slightly!

Q: OK, what are some ways I, as a loan holder, can avoid getting super screwed by the exorbitant interest rate?

Payday Lender: Pay the whole goddamn thing off NOW and never take another loan out from me.

Q: My plan, but sometimes you’re in a hard place, and these guys are the only option. But I totally agree.

Payday Lender: Is it online/tribal? Do they show their lending license? If its tribal, stop paying. Then send a letter saying you will only pay 20% interest.

Default on the first payment then renegotiate is the easiest. Work with unlicensed vendors(tribal or foreign). Not state. They have no teeth with claims because they aren’t obeying the state laws so collecting is hard for tribes if not impossible.

Q: What percentage of your customers are one time (or at least, super rarely) customers compared to the every week sort of customer?

Payday Lender: About half are habitual repeaters.

Q: That’s actually far better than I feared, but still far too many people trapped in that cycle. Any insight into why? Do the people lack skills? Does your area lack jobs? Is there some common theme, like medical bills or bail money that’s very common?

Payday Lender:  It’s lower than the industry average because my business model doesn’t actively pursue reloans. We can’t take more than 2 loans out on a person per year. I have seen everything from my car broke down and I just need this to get me to work; to, repeat offenders who make $80K a year (verified). I really don’t know of commonality I think there’s just a wide range of reasons.

I do have an idea how to fix it. Force contracts to carry an amortization schedule with a minimum number of payments. Say, 10 equal payments for example. Each payment reduces principal (NO INTEREST ONLY). This prevents them from HAVING to take a loan out every two weeks to cover bills. Don’t allow more than 2 loans per household per year, industry wide not just per lender. They will jump from lender to lender otherwise. This should be used as emergency money not a check cashing service.

Look, I make enough money following the rules and playing nice I don’t have to ream them too.

Q: Why is money the most important thing to you?

Payday Lender: Its not but its close. Money means freedom: freedom to live how I want.

Q: And you feel it’s acceptable to use others to get what you want, even if that means that their quality of life is diminished?

Payday Lender: I also feel like this is insulting to my customers. Shit happens and if it happens to someone with awful credit what are they supposed to do? So yeah I profit from that. Does it bother me? no.

I don’t advertise, my customers come to me, no ones forcing them to take a loan. And unlike other paydays I amoritize rather than taking the full amount and forcing them to renew. Instead of 1 huge payment at the end of the pay cycle forcing them to take a new loan. I take small payments for several weeks so if its truly just a bad luck thing. They arent locked into a never ending cycle.

So no I have no qualms about what I do or how I do it.

Whats the alternative? No one comes to me thinking its a wise life decision.

Q:I’ll just be leaving this here… Youtube

I’d like to hear OP’s take on John Oliver’s report (see above link) on pay day loans. Do you think it is accurate?

You sound like a rare breed indeed. Kudos for not trying to milk every dime out of ppl that you could.

Payday Lender: I love John Oliver. I have HBO and watch every episode. This episode made me think a bit about everything else I see though. He paints with such broad strokes it misses the nuance, like the show News Room, I think that nuance is truly where the difference lay.

The interest rates suck, but that’s not the issue. They have to because of the default rate is so high.

If I knew I was going to get my money back I could charge 20% like a credit card. But 25% of the time we lose not just the principal but the entire cost of servicing the loan ( to contrast bank loans have less than a 0.25% default rate). So, that means that the other 75% of payers have to make up that massive loss.

Lend someone 1000 dollars and it costs you 100 to service, so you are out $1100. You have to make $1200 to really make it worth it. So if you lose $1100, 25% of the time, how much do you need to make on the other 75% of the time just to break even. How much is that in interest to the other loans? Do the math…it sucks. And yes 25% is the industry average default on first time payments [FTPD] NOT the total default, that’s even higher.

I do think there’s severe problems with the industry, and that predatory renewals needs to be addressed (see my other comments above). The interest rates aren’t really the problem though… 500% is calculated on 2 weeks drawn out for 52 (so its really 20 to 25% a payment). If you can find me someone who can collect for 52 weeks I will show you the next Bill Gates; it just doesn’t happen.

So here’s the fix. Set a max to 200% APR, then force it carry it for 10 payments and no more than 2 loans a year, that way they have the opportunity to get out of debt, and you can still make some money.

I also think that this is a necessary service. Our customers don’t want to go bankrupt. They want to pay their debts, but that intention doesn’t matter to banks or lenders, so they can’t get a loan anywhere else. I have actually had customers in tears thanking me because they have no other options. The problem is there’s really no regulations on the industry. I can setup with a tribe and basically write my own law. So, some of my compatriots use that so they don’t have to obey state laws; this means they can do dumbass shit like auto fund renewed loans based on some bs contract no one read.

So I have limits, I draw the line, I know the difference between really fucking someone, and just covering my risk.

I am open to alternatives too. If not this what do we have, loan sharks?

Look, you don’t pay me I send you an angry letter; not break your legs.

Here’s a challenge. Tell me a better model. Vet it with financials. I wanna see spread sheets, planning, a well thought out idea. You tell me that and I will not only fund it, implement it with my call centers, staff, but I will even pay for the lobbyist. Hell, if its good enough I would hire you and get you a share of the profits.

Q: So whats the alternative? Illegal loan sharking?

Payday Lender: If you push it out then the loan sharks will come back. Remember prior to the 90s how the mob was pretty powerful in places like Vegas Chicago NY KC Boston(pretty much every major city)? Now they aren’t…

I am all for fixing the regs getting rid of tribal/foreign and repeat loans. Say a cooling off period before they can re-lend.

But It also used to be that you knew your banker. And if you needed $500 to fix your truck to get to work you would walk in and say “Hey Bob I need 500 can I pay you back over the next few months?” The regulatory environment and consolidation of banks broke that. So now where are you to go?

And don’t get me wrong the big banks needed those regs I am all for it.

I’ve seen it multiple times, and again its a very narrow view, and the problem is then everyone’s assumptions are based on that kind of narrow view. For example, who said I have a location? I used to, but stores are like a big “Rob Me” sign, I am online only now, and lend to residents in the state of Nevada and California where I am licensed to operate by the state. You have to go looking to find me, I don’t advertise.

Unlike the guys Oliver is talking about which makes it seem like everyone operates that way.

Here’s the difference between state and tribal.

Because of that state license, I have to follow lending rules in that state, like maximum interest rates, no more than 2 loans per person per year etc. I get audited every quarter to make sure I am doing this correctly (by both states). I pay taxes. I have to keep a bond with the state to make sure if I break these rules I can refund my customers. I can’t auto re-loan. I have to follow state collection guidelines. It goes on.

But on the flip side, I have protections which allow me to file actions against those who don’t repay me.

Tribal/Foreign based lenders don’t have to do any of this. They pay a fee to a tribe then write their own rules. And Oliver is talking about us as if its the whole industry when in reality its about half.

Q: This should be the most visible comment. it explains everything I was wanting to know about this from your side of it. Maybe I am missing something that makes you out to be a horrible person with a horrible industry (which I had previously believed) but you are running a business

Payday Lender: Thank you, I am sending this thread to the friend who put me up to this. She thought I was really going to get reamed. (which in fairness some have but nothing too harsh)

Q: Shit man, people are giving you hell and the credit card companies are cool? You’re filling a void in the marketplace.

Payday Lender: Honestly no ones giving me too hard of a time. It’s all been super civil. I thought it would be a lot worse.

But we wont let you dig too deep of a hole… I want my money back.

So here’s the math on the credit card. $1200 charged. 3% minimum payment and 20% interest is $2310 in Total payments back.

Borrow 1200 from me and run it to term its $2800 So that’s 20% higher than a credit card. But if your credit was good enough to get a card, you wouldn’t be coming to me, so yeah I have to charge more.

Q: How much money would a person need to start a business like this? How does one get into this business?

What happens to a market that is not allowing new talent in to proliferate the business?

Payday Lender: No one said that. I said its hard. The biggest lender in the industry is about to go out of business so there’s about 1 billion up for grabs… go get it if you want it.

Q: What do you mean by this? Do you mean take out s big loan and just not pay it back because they won’t be able to collect?

Payday Lender: No I mean theres about to be a lot of room for upstarts in the industry.

But shit now that you mention that… google biggest payday lender, borrow from him, then don’t pay him back …hes tribal and unlicensed. So unless you live in a few super red states he can’t collect or submit you to a credit agency. Only borrow online. Not in a store front. Stores are licensed.

Q: Could he collect or submit to a credit angency in Mississippi?

Also. Is there anything he could do to get the money back that would have bad effects for me? Could he sue me? Is he likely to do so? Is this a common scam to pull? What am I looking at by doing this? Sorry for all the questions. I only ask because I’m in a really tight spot. And desperately need about 1600 dollars.

Payday Lender: Collections is just annoying calls and you can send a cease and desist.

The credit reporting would have be in the contract, but if its a tribal lender I doubt they do. If its tribal they are breaking state laws, so they cant go to the states attorney to file an action or lien. It also means they really can’t sue either.

If they are a state Licensed Lender in Mississippi then their website or store location would have a copy of the License on their website. If they are state licensed, then they can sue and file actions.

If its a store front its probably state licensed. Online is about 70/30 where 70 are tribal.

If you are interested in the sector look into micro financing for developing nations as well. Cheaper easier, no regs, and a lot of free flowing money from investors.

Q: Would you mind going a little bit more in depth on this? What is micro financing for developing nations?

Micro financing is a kinda cool new idea. Developing countries have no real banking or credit sector. They also have lots of entrapeneurs. The dollar goes a long way there and they dont need much.

500 or so to start a business. So you get 10 to 20 of them together. Each get 500 to 1000 and they share risk with each other. Theres already people in those countries looking for lenders and act as middle men… so lend to the businesses all at a reasonable rate for a high risk investment 20 to 40% since theres a shared risk theres a high liklihood of repayment. And its not your money its investors who can afford the loss. If you are really slick, you set it up as a charity so if the investors lose money its a tax write off so who cares?

Rinse and repeat.

From Jer: You want to know more about “micro-lending?” Start here with “Confessions of an Economic Hit Man” by John Perkins and “Banking to the Poor” by Muhammad Yunus

Q: I’ve seen you haven’t received a lot of support here. For what it’s worth I know you fill a valuable space. People need money they don’t currently have and you provide that to them at a rate that is proportional to the risk the customer represents. Let’s be honest if they qualified for a credit card or any other option, they would use that first. I’d rather have people owe a local business man a few grand rather than owe the mob a few grand. Thanks for doing this AMA, very interesting.

How old are you?

How long have you been doing this?

How much money did you start with?

Did you take out a loan to start?

How comfortable are you living right now?

Payday Lender:

3 years ( I was a loan officer at a bank).

I had $100K of my own and another 1.5 million from investors

No, you can’t get a business loan large enough for a start up SBA just won’t allow it.

I make over 2 million a year and employ 23 people all of whom make over 40k a year + bonuses and benefits.

Q: What’s your professional background? Did you work in other financial service jobs/institutions before you opened your own shop?

Payday Lender: Banking was my background. I was a loan officer out of college.


So Dear Reader, what do YOU think? Shoot an email to me!!

Do you want to get started in “The Business of Lending Money to the Masses?” Click here: I WantMore Info.

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

Click This Image for Some Light Reading 🙂 Over Your Weekend!

Note to my Reader: This originally appeared here: Thread
And no, it is not me. Apollonius01, if you’re reading this, WE WOULD LOVE TO HEAR FROM YOU! WELL DONE, BROTHER! Jer


The Business of Lending Money to the Masses

The Business of Lending Money to the Masses 

I’m asked every day if there is still an opportunity for lenders to achieve an extraordinary ROI on their money by lending money to the masses.

How to Start a Loan Business

No doubt Dear Reader, you are inundated with ads daily offering you immediate cash via direct mail, TV, billboards, Fintech offerings,, radio, podcasts, online ads … just like I am.

So… you’re jaded. You’re an investor and an entrepreneur. You’re immune to these pleas made to borrowers to accept a lenders’ money.

WHO CAN”T GET THEIR HANDS ON $700 in a pinch?

The answer? Tens of millions of ordinary people all around the world.

According to the latest research by the Center for Financial Services Innovation (CFSI), 57% of Americans are not financially healthy. The situation is critical – 40% can’t come up with $400 in an emergency. The FED’s numbers are that 70% of consumers cannot come up with $1000 in an emergency!!

DO YOU REALLY NEED THESE STUDIES? Look around. Talked to your Uber driver lately? Your DoorDash delivery person? Any friends or family members working in the “gig economy?” In spite of their college degree, they’re forced to work as a barista? How about your local entrepreneur who needs cash today in order to pay for his supplies or make payroll until paid by her client?

The car breaks down; they can’t work. The lights get turned off. Their bank NSF’s 3 checks; the biggest one first. That’s 3 NSF’s amounting to $105.00! Can’t pay the deductible for their elective surgery.


What loan products are these tens of millions of consumers and small businesses looking for? Advance law suit funding, lap band surgery, car title loans [Auto/RV/Motorcycle], bitcoin & crypto, single payment [Payday], installment, amortized, line-of-credit, personal loans, biz startup funding, cash advances, vacation funding, designer watches and on and on! YES! YOU think many of these loans are for stupid reasons BUT they make sense for millions of folks DAILY!

The need for access to money by consumers is so overwhelming that Lenders can focus on niches. Here’s a few listings to get your idea muscle moving:

  • Think Sofi: focused on student debt
  • SALT Lending: focused on bitcoin and ethereum as collateral
  • Diamond Banc: Loans on luxury watches
  • Lending Club: peer-2-peer lending
  • CasnNetUSA: payday and installment loans
  • Lending Tree: debt consolidation peer2peer
  • Joey’s Auto Title: face-to-face car title loans in Albuquerque
  • Norris Group: hard money RE lenders
  • Prodigy Finance: lends to international students to
  • Insikt: consumer lending [The founder started at the rear of a Latino grocery store.]
  • LendingPoint: small online consumer loans
  • World Acceptance: face-to-face sub-prime consumer loans; $120M/quarter.
  • Oakum: lends only to immigrants
  • Wilshire: face-to-face car title loans to Koreans in Los Angeles
  • Fulcrum: Online and face-to-face personal loans to Haitians in Miami
  • Blinker: sub-prime car finance via an phone app
  • Dave: sub-prime personal loans via phone app
  • Accion: funds underserved small businesses
  • Groundfloor: real estate platform for non-accredited investors
  • CircleUp: Consumer goods financing
  • Fluid: Founded by our friend Timothy Li. Consumer credit for students.

Put on your thinking cap! What experiences do you bring to the business of lending money? Challenges? Hardships? Don’t you think there are millions of others out there facing the same financial challenges you have?

Tap into this! How do you solve these challenges, service these millions of borrowers in a humane way AND MAKE SOME SERIOUS MONEY?

Little. Big. Lenders come in all colors and flavors.

Ready to launch your loan business? Start here: “The Business of Lending to the Masses.”

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

Click This Image for Some Light Reading 🙂 Over Your Weekend!

“How to Start a Consumer Loan Business & Lend Money to the Masses”