Tag: how start payday loan business


Positive Payday Loan News-Wall Street Journal and CNBC

The payday loan industry received some very positive attention from wall street today! Get a copy of today’s Wall Street Journal and view CNBC’s Maria Baritromo program!

The Wall Street Journal has a piece entitled, “Dodd-Frank and the Return of the Loan Shark.” Yeah, hate the title but love the overall tone of the piece.

We’ll cover this in depth over the next couple of days. We simply want to alert you that wall street has identified the payday loan industry as a great area to make some money.

A few of more highlights to come:

AEA and DLLR are up 50%.

Same store sales and revenues are improving.

Consumers are moving from former credit systems into payday loans.

International payday loan lenders are growing.

“Buying a basket of payday lending stocks not a bad call!”

There are of course, still regulation questions on the state and national level to be considered.

Banks are driving consumers to payday loans and other AFS products.

Resurging growth of payday loan lenders is being seen in the U.S.

As I said, we’ll do more on this in the coming days.

And remember, “The future is ours.”



How’s the Payday Loan Industry Doing Today? Just Ask!

Want to know what’s REALLY going on in our industry today? Here’s a free method you can use to find out exactly what’s happening without having to deal with the BS a vendor might feed you. JUST ASK!

How start payday loan or car title loan businessphoto © 2010 SMJJP | more info (via: Wylio)
Yeah! Just walk into a local payday loan, car title, pawn shop, check casher, gold buyer store or whatever and ask the employee, “How’s business?”

Yep, it’s really that simple!

You maybe surprised at how candid these clerks and owners can be.

You can portray yourself as a customer or as a fellow business owner depending on the situation as you enter the location.

If it’s really busy in the store just lurk! Watch! Listen! Learn!

When appropriate, approach an employee and ask open-ended questions such as:
How’s business?
Would you like to own a business like this? If yes, why? If not, why not?
What’s your biggest problem right now?
What’s your greatest opportunity?
How did you get started in this?

Learn to ask a few questions and then just LISTEN! Don’t interrupt or butt-in. You’re not there to display your knowledge and virtues. You’re there to learn – to gain insight.

What products and services are being offered? Anything you should add to your arsenal?

What’s the condition of the location? Is it clean and orderly?

What about signage and lighting? Any ideas here YOU should implement?

Is it what we refer to as a “No” store? You know what I mean! Signs plastered all over the place saying “No” this and “No” that – as if management is LOOKING for any excuse “NOT” to do business with their customers.

And don’t forget to make it a goal to insist that not only you, but your entire team perform this task regularly and consistently.

Pay your employees to do this. And after doing this, take them to Starbucks, sit down with them and review their experience – Probe! As you discuss their findings and observations train them to get better at this in the future. Alert them that this research will be a continuing part of their job in the future.

We assign each of our employees and partners to perform this task once each month. We systematically map out our competitors and schedule our employees to visit a different competitor’s location.

It’s not uncommon for us to pay the fees for a $100 loan for our employee at a competitor. We reimburse our employee, pay for their time and make copies of all the loan documents, pamphlets, brochures, flyers, etc. they’re given.

So… get the idea? If you want to know what’s going on in your market, JUST ASK! GET OUT THERE!

And if you’re not yet in a niche you’ve been thinking about entering, VISIT those locations that are already in the space. Take scrap gold buying for example. You want to learn about this niche? Hit the road! Visit 10 stores today, ask a few open-ended questions, then SHUT-UP and LISTEN!

What do you think?  Add a comment!



Payday Loan and Cash Advance Collection Tips

Another Debt Collector Charged With Fraud

Reminder, if you’re attempting to collect a debt, don’t tell the debtor you’re a police officer, a lawyer or any other government official.

AIG and youphoto © 2008 Seth Anderson | more info(via: Wylio)An Oklahoma headquartered cash advance company, Federal Cash Advance of Oklahoma LLC (aka CASHMAX, Fed Cash, TOPCASH, Cash Service Center) is alleged to have sent deceptive collection letters to debtors that contained a Dallas Texas County clerk’s office forged signature and bore the official seals of Texas and Dallas County. Allegedly, the letters also contained phony court case numbers and included inappropriate criminal allegations.

As a payday loan company performing collection activities, you must remember that unsecured debt is generally a civil matter and not a criminal matter. Apparently there are still plenty of us who don’t understand this! Do Not misuse the term ‘criminal prosecution’ to pressure payday loan customers into making their payments. These strategies are not legal.

In the case of Federal cash Advance of Oklahoma LLC, the notice letters illegally threatened criminal prosecution, referenced phony “case numbers” and cited fictitious criminal penalties of up to five years in prison and heavy fines.

The Texas Attorney General has sued a the payday lender that misrepresented itself as a government agency in some mailings.


Annual Payday Loan Convention – Fisca

Let’s discuss the annual payday loan and check cashing convention at the Mandalay Hotel in Las Vegas, organized by FISCA, the Financial Service Centers of America. This was certainly one of the most positive, uplifting FISCA Conventions I’ve attended in many years! For the most part, the “doom and gloom” of past FISCA Conventions simply was not present; really, really nice!

annual payday loan FISCA Convention

annual payday loan FISCA Convention

The dominant tone throughout the Payday Loan Convention was one of optimism; that we will survive and prosper. Sure… our products and services must evolve, but regulators and others who think they know what’s best for our customers cannot regulate into oblivion consumer demand for our products! Our customers desire and NEED US!!

Attendance was good. There were many, many exhibitors. The workshops were improved and audience participation was much better than at previous conventions.

Regarding the workshops, we were pleasantly surprised that Internet topics were included. FISCA has come a LONG WAY since the early 2000’s when I was told by a FISCA Board member I was an “Internet bandit and could look forward to a prison sentence.” (Seriously folks! Even though we were using the “payday loan state licensing model” at the time!!)

Anyway…on to the Financial Service Centers of America Convention.

General Sessions:
Bob Wolfberg, President of PLS Financial Services, gave a really exceptional presentation; extremely upbeat and positive! He received a thundering round of applause and deservedly so. Inspirational!! The future is ours! Our Industry will not only survive but PROSPER MIGHTILY!! We’ll attempt to get a copy of his presentation for your review in the future!!

Our friend, Hillary Miller, also participated in the FISCA General Sessions! You may recall the wonderfully positive piece he wrote for the Financial Services Industry that appeared on our Payday Loan Industry Bog here: “Impact of Title X, the Bureau of Consumer Financial Protection.”

Additionally, other speakers participating in the General Sessions, discussed industry lobbying efforts, compliance issues, our customer demographics, check discontinuance, marketing research, FinCEN, money transfer, risk management, Internet and mobile payments and much, much more! (We’ll get into details over the coming weeks.)

FISCA Workshops are typically moderated by people “with an axe to grind” because they generally have a product or service to sell. So, we were delighted to note that many moderators and presenters appeared to be present simply to provide their experiences, knowledge, and thoughts on our industry. Some really good questions and comments from the audience added to the presentations.

FISCA workshops covered the gamut from collections, marketing, Internet strategies, revenue builders, industry best practices, compliance, bank relationships, new products and services implementation, harnessing in-store and mobile marketing, employer-employee relationships, store operations and a lot more!

Again, we’ll discuss the specifics of several of the Workshops in future Newsletters. (NOTE: new strategies, tactics and services introduced at the FISCA Convention are already included in our latest version of our Payday Loan Startup & Training Manual and in our “Payday Loan Internet Report“)

Exhibit Hall:
Of course, there was the “usual cast of characters”… software providers, lead generators, insurance, bill pay, stored value, prepaid and debit card providers, employee verification, check cashing solutions, store layout, signage, safes, etc. You don’t want to overlook these companies simply because they’ve been around a while. They are constantly tweaking and improving their products and services. And… you can learn from them! Talk… ask… discuss… comment… learn… you may very well prosper as a result.

Interestingly, not only are there NEW payday loan, car title loan and check cashing software provider offerings BUT the existing software providers have improved their offerings. This is a big deal! These huge investments of time and money in, not only improving existing products and services for our industry, but the addition of new players is a major bet on our future by some very sophisticated investors and entrepreneurs! This bodes well for the future of ALL of us!

Finally, we can’t fail to mention a few new, or vastly improved, products and services for the financial services industry having exhibit booths in the FISCA Exhibit Hall. Scrap gold buying and car title loan services are just two of many we’ll discuss in future Newsletters to enable you to not only survive but profit substantially in micro-lending.

So, for specifics… look for our future Newsletters in the form of emails or check our Blog regularly at http://www.PaydayLoanIndustryBlog.com to gain access to new and exciting products, services, tactics and strategies for serving your customers and profiting in payday loans, car title loans, check cashing and scrap gold buying.



Hang In There Payday Loan Fans! The Future is Ours!!

Hang In There Payday Loan Fans! The Future is Ours!!

Payday Loan, Car Title Lenders, Check Cashers and all the rest of us in the micro-lending niche will survive. In fact, we’ll thrive.

How can I say this? How can I be so certain?

First, let me share with you the catalyst for this rant.

I got into payday loans, car title lending and check cashing in 1997 when I opened my first store in Mission Viejo, Calif. It was the early days and nobody in my world even knew what a payday loan was. I attended my first National Association of Check Cashers Convention (now called FISCA), networked, attended the workshops and left feeling really upbeat about the future of the payday loan industry and micro-lending in particular.

Everything was going great. Sure, there were always rumblings about regulators in a few states getting their feathers ruffled after prodding by The CRL or some other anti-business, anti-capitalist, anti-financial choice group. But I came to realize we enjoy a huge demand by consumers for our products and services. And we have some really smart and creative people in our industry.

Then October 2003 came along. I was at the FISCA Convention (I think it was at The Broadmoor in Colorado) when the FDIC announced all federally chartered banks involved in payday loan lending would have to increase their reserves to 1:1. Additionally, the FDIC advised that banks should ensure that payday loans are not provided to customers who have had payday loans outstanding from any lender for a total of three months in the previous 12-month period. “FDIC-supervised institutions currently engaged in payday lending are instructed to submit plans detailing how they will address the revised guidance.”

This announcement swept like wild fire through the halls of the convention. Shares of publicly traded payday loan lenders and check cashers plummeted that day. Valuations of brick-n-mortars plunged! “There would be no financing available in the future for our industry.” Stephens Investment Bank dutifully reported M & A action in our market segment was “dead” for the foreseeable future. Fully a third or more of the convention attendees freaked out. It was they said, “The end of our industry.”

Many operators bailed. They sold out; some at fire sale prices. (I know that many of these sellers eventually came back to our industry. They couldn’t stay away :o)

And then a funny thing happened; our industry survived. Store revenues increased. Transaction volume increased. The Internet began to play a role. CFSA was formed and eventually the OLA .

I don’t know the date you’re reading this. It doesn’t even matter. Just be aware that the regulatory and legislative issues discussed here are a universal theme, so keep reading. You’ll be glad you did! It’s very optimistic!!

Now don’t get me wrong! There have been more bumps and grinds along the way. The payday loan advocates in Georgia were defeated by GILA . Oregon went down the tubes. Arizona and Ohio were tough battles. Virginia is edgy. And there were others! (By the way, don’t think the residents of these “dark” states are no longer getting their payday loans and car title loans; they most certainly are. They simply aren’t walking into a store in their state. Instead, they’re using the Internet,they’re driving across state lines, they’re calling 800#’s… meanwhile there are fewer jobs in their state. There is more crime in their state. Fewer taxes are being paid in their state. Vacancy rates for commercial buildings are higher in their state. And the fees that licensed payday loan and car title loan businesses were paying to their State are now non-existent. I guess that’s the subject of another rant!)

But it’s not all doom and gloom for us!

Here’s just a few reasons why we will overcome!

It will be 12 to 24 months before anyone in Washington even reads the 2300 page Consumer Financial Regulatory Agency Proposal. It will take months and months to form the committees and boards required to attempt to oversee our industry. There will be massive lobbying by the banks, the credit card companies, the automobile dealers, and our own organizations including OLA, FISCA and CFSA creating a lot of “give-and-take.” Who knows what the ultimate outcome will be. I’m certain we will evolve into whatever it takes. (For more on this read USA Today’s description of past failures of new financial regulatory reform out of Washington.

And there’s technology. Technology is in our favor. Technology knows no boundaries. Pay attention to Internet solutions. Get acquainted with “peer-to-peer” lending. Educate yourself regarding the origination of the Grameen bank and Muhammad Yunus who won the 2006 Nobel Peace prize for micro-lending. Do you know what he’s doing in New York and Pennsylvania today? Take a look at the Kiva Model and Prosper and Lending Club. Here’s a Business Week article offering some further insight into peer-to-peer lending:

Acquaint yourself with installment lending, open-end credit agreements, closed-end credit agreements, the Credit Services Organization (CSO) Model, collateralized and non-collateralized loans… (all of these are discussed in our Training Manual at PaydayLoanIndustry.com .

And don’t forget to learn what you can implement in your specific location/ model regarding setup fees, one time application fees, credit check fees (even if it’s simply Teletrack), referral fees, check cashing fees, connection fees…

MOST IMPORTANTLY, let us not forget about our customers! THEY NEED US JUST LIKE WE NEED THEM. They’re out there by the millions in the USA, the UK, Canada, Australia, New Zealand, Korea, Japan; they’re EVERYWHERE! And our customers DEMAND our product! They WANT our product! They MUST HAVE our product!

We simply have to organize better, support our industry organizations better, join forces with complementary industries, and prod our customers to support us with videos, email, letters and face book accolades. Most importantly, we must EVOLVE into whatever we need to be in order to SERVE OUR CUSTOMERS. No matter what the Regulators do, OUR CUSTOMERS WANT US! CUSTOMERS NEED OUR HELP! AND WE DESERVE TO MAKE A PROFIT SERVING THEM!!

So… with no end to consumer demand for our products and services in conjunction with an industry composed of some of the most intelligent and creative men and women on the planet, I’m 100% certain the payday loan, car title loan, check cashing …the whole micro-lending niche will not only survive but prosper in the coming decades.

Educate yourself! Read this PaydayLoanIndustryBlog.com . Read The Payday Loan Pundit . Read Nick’s stuff at PDLIndustry.com .

Consumer Financial Service Centers are our destiny! Evolve!! Adapt!! Create!!! You’ll prosper!!!!