THE BLOG

11
Oct

$300 for Financial Emergencies Still Impossible for U.S. Households

Survey Says: 40% of Americans Have Less Than $300 in Savings

Ok, so this is crazy! After all the FED stipend, checks-in-the-mail programs, the unemployment addons, on both a State and Federal level, rent and eviction moratoriums… U.S.households still don’t have two nickels to rub together! 

SCARY! What’s the US economy look like? What will be the impact on small-dollar lenders? Sure, demand for payday loans, car title loans, installment loans, line-of-credit loans, Buy-Now-Pay-Later plans… will skyrocket. So will “first-time-payment-defaults [FPD].

Those of us who are “Lenders to the Masses” best keep our heads up!

According to a recent GOBankingRates survey, 40 percent of Americans have less than $300 in savings, reflecting the effects of the COVID-19 pandemic on Americans’ financial health. This data is significantly less than the $400 figure that the Federal Reserve uses to measure households’ financial well-being. In the most recent Federal Reserve Report on the Economic Well-Being of U.S. Households, released in May 2021 and covering 2020, only 64 percent of Americans could cover a $400 emergency expense completely using cash or its equivalent. This means that 36 percent would need access to credit to meet unforeseen needs.

“We find that people’s financial savings can serve as a kind of litmus test for their financial well-being in general,” said Andrew Murray, content data researcher at GOBankingRates. “The 50-30-20 budgeting rule suggests people save 20 percent of their income, so when people don’t have any savings or have to withdraw from it unexpectedly, it’s a good indicator that they are struggling financially.”

Read the full article here: Survey

 

How to Start a Consumer Loan Business
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14
Jul

9 Reasons: Biz of Lending to the Masses Continues to Scale Big Time

How to Start a Consumer Loan Business

Hello Lenders, Vendors, Entrepreneurs, Regulators & all interested parties in “The Business of Lending to the Masses!”


Government subsidies, additional unemployment payments, and rent moratoriums are coming to an end. Vaccine & Covid fears are abating. Jobs are plentiful. That means our borrower applicants have the ability to pay.

Our portfolios and those of my clients and peers continue to pick up steam.
Demand for cash by the “lower moderate-income, unbanked, underbanked, thin-credit, subprime… whatever you choose to call this demographic – “THE MASSES” – continues to increase dramatically.


The malls, the outlets, the designer stores, auto sales – especially used cars, consumer goods of ALL kinds are overwhelmed with consumers exhibiting pent-up demand. I’ve personally visited Texas, Florida, Mexico, Tennessee, Washington, Oregon… By the 4th quarter – OUR Quarter – all of us will be scrambling for capital to serve this extraordinary demand for our financial products and services. [Have capital? Need capital? Reach out to me!]


Per a mentor of mine, Anthony [Pomp] Pompliano – Link below]:

  • “The lack of financial education should be a national emergency in the United States. Only about 50% of states require high schools to teach students personal finance and there are many statistics that point out just how financially illiterate our society is currently:
  • More than 53% of adults say thinking about their financial situation makes them anxious.
  • 44% of adults say discussing their finances is stressful.
  • About 66% of American families don’t have savings that are equivalent to 6 weeks of expenses.
  • 78% of adults live paycheck-to-paycheck.
  • 80% of young people (people under the age of 35 years old) couldn’t answer majority of financial literacy questions accurately.
  • 54% of millennials are concerned about their student loan debt… there is currently over $1.5 trillion in student loan debt.
  • Less than 20% of adults feel confident in their savings habits.

These are just some of the statistics that highlight how bad the problem has become. There are plenty more.

Here is the craziest part in my opinion — most people believe they will never be able to build a life of wealth because they don’t inherit anything and they don’t have a large salary.


While counterintuitive, here is what the data says:

  • Approximately 80% of millionaires inherited $0
  • 33% of millionaires never made $100,000 in a single year

The truth is that you can build a life of wealth by simply being educated and having a disciplined approach. It is easy to learn, but obviously difficult to execute.

Anthony Pompliano has had a HUGE influence on my life! I’m a paid subscriber; for me, he’s worth every dime.

He and his Team offer substantial free information as well. I STRONGLY SUGGEST YOU follow him! Here is an announcement I received from him this a.m.: “It has become more apparent over the years that our school systems are not going to solve this financial education problem. Rather than waste time complaining about the lack of change, my brothers and I have decided to do something about it.”


[PS: From Jer. “I am not being paid by Anthony for this “plug.” I simply believe Anthony’s info – even the free stuff – is highly relevant for our niche, “the business of lending to the masses,” as well as the crypto industry, and extremely relevant for ALL freedom-seeking people!”]


From Team POMP: “Today we are launching The Best Business Show, which we hope will become the most entertaining way for people to learn about business, finance, and investing. Simply, it is the business show that we wish we had when we were learning.

“The idea here is that we will live stream for 2 hours every weekday from 11am to 1p EST. We’ll explain what is happening in business and investing, why it is happening, how it impacts the average person, and explain various timeless investing principles.”

“We aren’t journalists. We will leave that important job to the real professionals. We are simply three guys who educated ourselves over the years and have been able to build a nice life through those acquired skills. Now we’re going to share that information with young people by bringing it to them on the platforms that they are already on.”

“The internet is powerful. We don’t need a cable news network and we don’t need to ask permission from anyone. With just an internet connection, we can create what we believe will become the largest business show in the world. It won’t be easy. It will take a lot of hard work. But it is the single most impactful thing we can think to do in an effort to make an impact on this pervasive problem.”

“If you’re interested in checking it out, you can subscribe to the POMP YouTube channel”


PS: While you’re at it, grab the latest version of our Course, “How to Lend Money to the Masses Profitably” Version 75 here: https://theBusinessOfLending.com


Meanwhile, prepare for the wild ride ahead! Finally, remember! Our business is ALL about the phone. Your loan company must be capable of acquiring, underwriting, processing, funding, collecting… from the Masses who must have access to fast, no-hassle cash!


Again, for perspective, read/listen to “Debt: The First 5000 Years!”

No go make some serious MONEY and be of SERVICE to whom YOU CHOOSE! Not the government.

Jer – 702-208-6736 Cell
Jer@theBusinessOfLending.com

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23
Feb

FREE: GO BEHIND THE SCENES WITH 17+ WORLD-CLASS CONSUMER LENDING EXPERTS

FREE: GO BEHIND THE SCENES WITH 17+ WORLD-CLASS CONSUMER LENDING EXPERTS

March 3rd & 4th 2021 The Business of Lending to the Masses

Discover how to adapt, pivot, and thrive in the new economy as a consumer lender.

Jer Ayles: Presenter & Attendee: Payday Loans, Tite Loans, Personal Loans, Installment Loans

Jer Ayles: Presenter & Attendee

This event will bring together the best in the industry to teach you how to navigate the legal changes, shutdowns, technological advances, and consumer behavioral changes that are having an impact on your business right now and it’s FREE (for a limited time). FREE ONLINE EVENT | March 3 – 4, 2021 Click to Register Lockdowns, Covid, Government subsidies, 36% APR theme, the Biden Administration, short-term survival vs long-term Success! What do you do? What’s your next move? How do you survive, thrive, and protect your Team, your community, our Country’… by offering the 98% of financially challenged consumers in search of choices and transparency in need of help navigating this challenging economic environment As a valued member of our free Newsletter, “The Business of Lending to the Masses,” I’m offering you FREE ATTENDANCE to “The Consumer Lending Summit” March 3-4 2021. PS: I’m honored to be a presenter & an Attendee! You cannot put a value on this! Whether you’re a Lender, a vendor, a consumer, an investor. a TLE. a member of Indian Country, a VC, a competitor, capital in search of a superior ROI, the media, a regulator, a VC, Family Office… Join us via Zoom with ZERO investment Thanks for being a loyal email subscriber. I appreciate hearing from you. Let me know if you ever have any questions. ideas, needs, opportunities, solutions… Jer Click to Email Was this forwarded to you? Signup for our free monthly insights! Click to Click here to signup! BE THERE! Jer & Team Trihouse Consulting TheBusinessOflending.com
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02
Oct

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

 

 

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02
Dec

California HB539, Tribe Collaborations, Small-Dollar Lenders

Are You Interested in Tribe Collaborations? Could this solve your *California HB539 <36% APR Rate Cap issue?

Wondering if the Economics Make Sense?

Afraid you’ll wind up like Scott Tucker?

*Effective January 1st, 2019, California Lenders operating with a CFL License can only fund loans of $2500+ with 36% APR caps!

Tribal Lender Defeats Class Action Lawsuit in the Eastern District of Virginia. Huge Win for Sovereign Immunity!!

Tribal Lending TLE Personal Loans

The ability of geographically challenged [think casino and natural resource revenue, not an option] federally recognized Native American Indian tribes to participate in E-commerce collaborations with Silicon Valley, servicer/marketers, investors, and other sophisticated experienced entrepreneurs HAS IMPROVED DRAMATICALLY since the days the Scott Tucker’s of the world participated in the “business of lending to the masses.”

In today’s environment, a tribal E-commerce business model that benefits ALL parties is easily accomplished. All the pieces are in place. Compliance, regulatory oversight, realistic revenue share agreements, tribal lending business entities, consumer-friendly loan products, capital, and experienced 3rd-parties for outsourcing if needed. It’s simply a matter of introductions! That’s what I do.

[For an intro: LeaningRockFinance.com] or email: TLE@LeaningRockFinance.com

My readers are fully aware of all the studies and papers produced by our industry, the so-called consumer advocates, PEW, the multitude of federal and state agencies, the myriad of church and charitable groups ad nauseam who continue to fret about “predatory lending” and “cycle of debt” issues.

MEANWHILE, the FACT REMAINS: Approximately 140,000,000  plus/minus US residents cannot access $500 cash when faced with a sudden, unexpected, frightening financial emergency! Cars to get to work break down, lights get turned off, contractors need to purchase materials, hours are cut back by employers, gig workers become ill and can’t “gig,” prescriptions have to be filled…

How is it possible when we have record low unemployment, low inflation, 2 income households, 100’s of thousands of jobs go unfilled and still, there are millions of Americans who cannot access $500 cash today? The reasons are varied and the nuances many. BUT, it’s a fact.

The regulators, legislators and 1%  cannot quench the demand for quick, no-hassle $small-dollar loans by the masses!

So what to do? Allow capital to partner with entrepreneurs to embrace technology in all it’s forms, unfettered by pre-internet infrastructure, bureaucracy, and rules that simply no longer reflect the realities of today.

Rather than “big-brother” and incumbents dictate the rules of the game, enable collaborations between creative minds to build and partner disparate expertise in finance and tech and capital to create and deliver small-dollar loans that truly result in win-win scenarios for all parties to solving this challenge!

Again, for a formal, DISCREET introduction & exploration to a collaboration: Click LeaningRockFinance.com

Big Picture Loans Defeats Class Action Lawsuit in Eastern District of Virginia

Consumer loans offered by the U.S. federally recognized Native American Indian tribes are legal and sovereign per the U.S. 4th District of Virginia.

When creative groups of enrolled tribal members, capital and experienced 3rd party collaborators join forces resulting in definitive financial benefits for all parties, the Fourth Circuit Court ruled sovereign nation status is in order.

A class-action lawsuit, brought against Big Picture Loans, was recently overturned by the Fourth Circuit.

Big Picture Loans is a tribal lender offering payday, installment and line-of-credit loans to consumers via their online platform. Big Picture is owned and operated by the Lac Vieux Desert Band of Lake Superior Chippewa Indians, a federally recognized Indian tribe.

The tribe is a balance sheet lender and secures capital from its servicer/marketers, family offices, and investors from around the country.

In 2017, consumer plaintiffs argued that federal and state laws applied to Big Picture Loans, regardless of their sovereign immunity. The tribal lender, however, argued that they are entitled to sovereign immunity, regardless of state or federal laws.

Initially, the U.S. District Court rejected Big Picture Loans assertions that they are immune from the suit.

However, an unexpected turn came about when the U.S. District Court decision was reversed by the Fourth Circuit.

Reason: The U.S. District Court was found to be erroneous in their decision in claims that Big Picture Loans is not an arm of the Tribe.

The case was officially dismissed, giving the lender and it’s technology partners, in this case, Ascension, another victory for tribal lenders.

Further, the Fourth Circuit concluded that, regarding tribal lenders, it will adopt the Ninth Circuit’s first five breakthrough factors when determining tribal sovereign immunity in future cases.

The Future for Tribal Lenders

Tribal Lenders and their 3rd party servicer/marketers should adhere to the following five breakthrough factors by the Ninth Circuit if they wish to prevent lawsuits in the future.

1) Method of Creation According to the court’s findings, business formation under Tribal law weighs in favor of sovereign immunity. Organized under the Tribe’s Business Entity Ordinance via Tribal Council resolutions, Big Picture Loans and Ascension, were in fact, exercising powers delegated to it by the Tribe’s Constitution.

2) Purpose Tribal nations receive little, if any, federal or state assistance. Big Picture Loans argued the case that the goals of their lending program were to support economic development for their tribal nation, which financially benefits the tribe to grow and prosper. As the case stated, the lender proved the business revenue had been used to fund homeownership opportunities, new health clinics, youth activities, college scholarships and much more. If a tribal lender can prove the business revenue helps fund economic development, the Purpose factor has been met.

3) Structure, Ownership, and Management Since the lender was incorporated under tribal laws, and operates and manages the business, the court found that this weighed in favor of tribal immunity.

4) Intent to Extend Immunity Tribal lenders must not extend immunity to any third-party partners. The court found that BPL indeed did not provide immunity to any of their partners outside of the tribe, specifically Ascension.

5) Financial Relationship A lawsuit could prove to be devastating to a tribal nation if a lender is found guilty. According to the court, this would severely impact the Tribal Treasury in a way that would limit economic growth. Therefore, the fifth factor was in favor of BPL.

Based on these five factors, the Fourth Circuit ruled that all factors were being upheld by Big Picture Loans and Ascension.

Are you interested in collaborating with tribal lenders? Leaning Rock Finance is interested in exploring collaborations in an effort to continue to deliver eCommerce platforms and capital to geographically challenged tribes lacking income-producing casinos, natural resources…  Visit Leaning Rock Finance for an introduction or simply email: TLE@LeaningRockFinance.com

Tribal Lending TLE Personal Loans

Jer- Trihouse 702-208-6736 Cell
Knowledge Store: Resources for Lending $$ to Consumer
TrihouseConsulting@gmail.com

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