THE BLOG

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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07
Nov

Upheaval in the Business of Lending while Continuing to Serve Consumers & Tribal Collaborations TLE

The “business of lending to the masses is under constant attack!” Witness the recent passage of the <36% APR HB539 bill enacted in California, the devastation of lending to the under-banked “thin-file” residents of South Dakota, the latest machinations occurring in Nebraska…

 

We simply do not have the clout, money, political connections and collaboration that our opponents have at their disposal. [Think banks able to access capital at ridiculously low costs from the FED (taxpayers], credit unions; they are non-profits and pay no taxes, the various so-called consumer protection advocates who in many cases are simply shills having agendas that fail to acknowledge the plight of the 50% of all US households who cannot access $400 cash when suddenly facing an emergency financial challenge.

 

Sure! Our industry has some bad apples! Every endeavor does, be it for profit, charitable, non-profit…

 

Do you realize the executives at the Red Cross [$500,000/yr} or the infamous CRL do not work for free? They want to keep those soft jobs!

 

We are not saints! But we certainly are community leaders in many cases who deploy our profits to provide service to our customers, our community, our churches, our employees and their families, our investors… hell, even our landlords and banks! [Take a look at Amscot Financial as just one of MANY examples.]

 

The business of lending to the masses is undergoing tremendous upheaval. The internet, smartphones, artificial intelligence, data scraping, automation, the millennial generation is replacing the “Boomers,” websites, chat boxes, identity fraud, LMS cloud-based platforms, same-day ACH, big brother Google and Facebook, the “bank model” and its access to cheap money, the <36% APR theme…

 

ALL these issues and MANY more are creating disruption AND more importantly, OPPORTUNITY for those of us who embrace change, stay informed, reverse engineer the newest business models available to legally and profitably serve the hundreds of millions of hardworking folks who need a financial leg up now and then. 

 

collaboration with a Native American Indian tribe is BUT one of many solutions to your path remaining in business while helping your customers deal with life.

 

PS: Reach out to meJer TrihouseConsulting@gmail.com if you would like to explore potential solutions to your specific challenges in your B2C business. My Team and I travel the world, meet with executives and founders of a multitude of companies offering tribe introductions, capital raises, methodologies & products that adhere to the <36% APR issue while still achieving 200%+ APR’s, executive search, new product & platform launches, California HB539 solutions… I’m always available to explore… and if I can’t help, guaranteed I know a savant with the expertise to help you!

 

 

 

Tribal Lending-TLE-Collaboration

Click the Image Above to Explore a Collaboration with a Federally Recognized Native American Tribe in the B2C lending Space!

Tribal Lending Provides More Opportunities For America’s Indigenous Peoples

By: Mary Jackson. Forbes Councils Member
This “Opinion Piece” below appeared in Forbes and was written by Mary Jackson the CEO of the Online Lenders Alliance, the online lending industry’s center for lending, technology, and innovation.
Read and “digest” wholeheartedly Mary Jackson’s insight! 

For some Native American tribes, online lending has become a critical part of their economic development efforts. Unlike the federal, state and local governments, which fund operations through levying taxes, Native American tribes rely on economic development enterprises to provide essential government services to their members.

Many tribes are also located on geographically isolated reservations that are far from urban population centers. For these tribes, on-reservation business activity is difficult to build and harder still to sustain. With traditional forms of commerce largely unavailable, the internet and e-commerce have emerged as lifelines to them, and Tribal Lending Enterprises (TLEs), specifically, have been a major asset in helping generate revenues to fund their governments and provide for their members.

Lending revenues increase funds for the tribes’ operating budgets, helping them to provide essential services like health care, elder care, infrastructure, and education. In addition, these businesses create jobs in areas where unemployment has long been rampant, providing a meaningful opportunity to tribal members in their own communities. In short, they allow tribes to be more independent and self-reliant, and tribes have created their own enforcement practices and regulatory bodies to ensure they are in the driver’s seat.

Like virtually any other business sector, the online lending industry has a variety of participants who bring it to life and ensure it operates smoothly. The membership of my online lending association comprises a diverse cross-section of the industry, including big, publicly traded companies; small, privately owned businesses and companies owned and operated by sovereign Native American tribes — among others. In addition to actual lenders, members rely on third parties such as service providers, marketing agencies, web designers, application developers and data bureaus.

For Native American tribes who have developed TLEs, service providers and vendors play a vital role. Just like lenders of all types, tribes partner with other fintech companies to offer credit in innovative and convenient ways — thereby making loans available to consumers who otherwise would have little or no access to lending options.

These third parties enable creditors to reach different customer segments by leveraging an existing customer base or customer lists, underwrite borrowers more effectively by using nontraditional data sources that go beyond the FICO score and make additional loans by providing liquidity and funding. They help with advertising and marketing the business as well as with screening customers pursuant to fraud prevention and know-your-customer guidelines.

The U.S. Treasury’s fintech report and the Office of the Comptroller of the Currency (OCC) have acknowledged this vital business function for banks and other lending businesses. According to the OCC Comptroller’s Handbook on Installment Lending, the most common reasons for banks to use the services of an outside vendor include cost savings, capacity reasons and access to expertise and resources. This is also true for tribal lenders.

As to regulations, tribal lending is subject to the same 19 federal laws that banks and all other financial service providers must adhere to in their product offerings. Laws such as the Truth in Lending Act, Equal Credit Opportunity Act and the Electronic Fund Transfer Act are just a few of the notables. In addition, sovereign tribal nations set their own financial services laws and regulations. Just like states, tribes have formed their own regulatory authorities, which enforce tribal and federal regulations for lending and consumer protections.

For years, tribes have fought for their right to self-determination, which includes the power to enact their own laws and be governed by them. As they have entered the e-commerce frontier, many tribes have set up sophisticated online lending businesses that can compete with the biggest players in the industry.

This is a relationship that should be encouraged — and not disparaged, as some industry opponents have done in recent years. The service providers who partner with tribes are a key part of driving them forward and helping to establish robust, well-run and viable businesses. And as a result of these partnerships, many tribes are thriving as they’re seeing previously unforeseen revenues fill tribal coffers.

These tribes are true entrepreneurs and are a model for the entrepreneurial spirit. New entrants to the online lending space like these are welcomed, and they are a sign of the diversity in fintech that we should all be embracing. The service providers who they partner with play a key role in bringing forth well-established and compliant lending practices to all lending entities — big and small, old and new.

Link to original Forbes Piece: Mary Jackson

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Jerome – Trihouse 702-208-6736 Cell
Knowledge Store: Resources for Lending $$ to Consumer
https://www.PaydayLoanIndustryBlog.com
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04
Nov

California HB539 <36% APR Effective Jan. 1st, 2020

  • Do you hold a California CFL License?
  • Do you offer title loans?
  • Are you aware effective Jan 1st, your business will be destroyed?
  • I have an idea that could enable you to serve your customers, enable you to offer Calif. title loans after Jan. 1st and continue to achieve a superior ROI for your CFL business in California.
  • If this is your situation, reach out immediately to me: TrihouseConsulting@gmail.com PUT CALIFORNIA CFL in the SUBJECT.

PS: If you have no clue what I’m talking about: https://geni.us/HB539-California  READ MY POST ON LinkedIn

California Big Brother Crushed Consumers with <36% APR.

“The margin covers the cost of funds used to lend, the operational costs of lending, and the risks associated with it. In other words, Net Income = Interest Revenue – Interest Expenses – Net Non-Interest Expenses.”

Effective January 1st, 2020, the 55% of California residents who do not have access to $400 cash in an emergency are out of luck. No where to go. Their friends and family are in the same boat!

Join a church?

Get a 3rd gig job?

Rob my house and pawn my stuff?

I loan $100 and earn $3/month! Not a chance.

It is as simple as that. If you’re a California CFL lender looking for solutions, reach out to me. I have the blue pill

https://geni.us/UglySideInstallment

The Ugly Side of Lending: Online Installment Loans

Jer-Trihouse  TrihouseConsulting@gmail.com

PPS: Apologies for being silent for the past 6 weeks. Been in France…

Jer

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21
Oct

Available: EXPERIENCED SMALL DOLLAR LOAN [AFS] EXECUTIVES

Available: EXPERIENCED SMALL DOLLAR LOAN [AFS] EXECUTIVES

Small team of experienced legal, operations, tax & asset protection executives:

  • Tribe sovereign nation model. Introductions, pros & cons evaluations…
  • State-by-state licensing model.
  • California CFL license holders: impact of AB539 effective January 1, 2020 strategies and tactics t remain in business.
  • Online personal loans: both collateralized and non-collateralized.
  • Underwriting analytics.
  • Customer acquisition cost reduction strategies.
  • LMS: Loan management software evaluations, analysis and recommendations.
  • Ohio CSO alternatives
  • Texas CAB/CSO consultants
  • Development of alternative loan products and ancillary services to meet 36% APR caps while maintaining Lender margins
  • Connections and introductions to 3rd party banks, payment processors, attorneys, credit bureaus, lead aggregators, LMS…

Macro Description of a Few Past projects

  • Orchestrated launch for new Personal Loan product to expand market share and generate over $600,000 in revenue the first year.
  • Increased top line revenue of online tribal lender to $50M <3 years.
  • Directed HR operations for 200+ employee operation across 25 locations, including strategic workforce planning, goal cascading, performance management, staffing, and benefits administration.
  • Planned, monitored and appraised employee work results by training managers to coach and correct employees.
  • Identified, initiated and completed transition of bullet proof asset protection and tax minimization entities for a multitude of Lenders in the B2C space
  • Counseled leadership and offered actionable initiatives to reduce compliance-related issues addressing equal employment opportunity and sexual harassment.
  • Facilitated conversion from Paychex payroll system to new ADP HRIS technology in a smooth, efficient and diligent manner to minimize impacts and proactively address any problems.
  • Evaluated developing call center operations and current market trends to identify necessary improvements and capitalize on changes.
  • Recruited and developed over twenty employees for call center sales department and developed quality employees within the call center to take on leadership positions.
  • Consulted with technology development teams to create and enhance CRM, lead generation, websites, and automated marketing campaigns.
  • Researched, negotiated, facilitated and managed real estate transactions.
  • Outlined work plans, determined resources, wrote timelines and generated initial budgets as part of project scope determination for tenant improvement projects.
  • Grew small dollar loan B & M company from 9 locations experiencing negative cash flow to 43 locations and annual cash flow in excess of $10mm.
  • Gathered, analyzed, prepared and summarized recommendations for financial plans and acquisition activity, including future requirements for operating expenses.
  • Conducted research on emerging trends within the industry and capitalized on creating, identifying, and developing new products, services and strategies to increase business market share, drive growth and onboard new customers annually.
  • Devised, deployed and monitored processes to boost long-term business success with optimal sales and profit levels.
  • Supported regulatory compliance by implementing policy, procedure and overseeing all audits to verify protocol adherence.
  • Developed program to promote new managers from within, building and maintaining cohesive leadership structure.Wrote detailed training materials.
  • Developed banking relationships, selected and negotiated with vendors.
  • Hired, trained, coached and mentored staff.
  • Managed all day-to-day operations and ensured timely and accurate accounting of financial results.
  • Negotiated the sale of the business for profit.

SUMMARY
Experienced strategists, entrepreneurs and startup enthusiasts with a passion for building businesses and challenging the status quo.  Cumulative 100+ year track record of defining new business strategies, launching new ventures and delivering operational impact, both as founders and executive managers. Expert presenters, negotiators, able to forge solid relationships with key partners and build consensus across multiple organizational levels.

SKILLS & EXPERTISE
Business Acumen • Proactive and Strategic Leaders • Project Management • Financial Analysis/Projection • In-Depth HR Knowledge • Product/Concept Development and Implementation • Innovative Thinkers • Excellent Communication Skills and Content Writing • Organized, Motivational Leaders • Strong Problem Solving and Analysis • Customer/Client Focused • Real Estate Site Selection and Purchase/Lease Negotiations • Technology/Software Proficient

Want to explore what this Team can do for your business? Shoot an email to Jer at  TrihouseConsulting@gmail.com 

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