Tag: how to start payday loan business


How to Start a Payday Loan Business

Starting a payday loan business has never been easier. Sure, there are some state or provincial regulatory issues to deal with. And you’ve got to navigate through the business structure scenarios available to you; LLC, S-Corporation, C-Corporation, Sole-Proprietorship, etc. ( A good introductory to this subject is Garrett Sutton’s book “Why Form A Corporation” from the “Rich Dad Poor Dad” book series). And yes, we know the Obama administration has lot’s of ideas that will eventually impact the payday loan, car title, check cashing and RAL ( Rapid Tax Refund ) industries. But hey, these little impediments simply eliminate the entrepreneurs lacking drive, ambition, guts and a degree of risk tolerance.

“Ease of entry” is a term that’s often tossed around by knowledgeable folks when considering entry into a new business. Mature entrepreneurs realize that barriers to launching a new business, like the payday loan or car title loan niches, are simply opportunities for them. They realize most people are simply lazy!  They want instant gratification. They want everything laid out for them. Actually they want everything done for them; and, they want it all done for free.

The point is, if it’s easy to enter a new market, a new niche, a new industry, and the perception is that a ton of money is being made, then competition will certainly appear. On the other hand, if on the surface, the general consensus is that it’s too difficult to jump through the hoops required to enter an industry such as payday loans, the typical new business dreamers will never do the work or perform the research to enter that market and compete. And that can be a good thing and a bad thing…

Why? Obviously it’s good when you’re in an extremely lucrative market and you have little competition. However, there is strength in numbers. There is strength when a significant number of competitors exist in a market having large numbers of customers. A large, competitive industry with large budgets can communicate their products and services benefits to consumers, the media and legislators. PAC’s (Political Action Committees) can be formed to fight regulatory encroachments by competing industries – such as banks and credit unions versus payday loans and car title loans.

The consumers, employees and businesses offering and using our services are voters. Obviously, the more voters who understand the benefits of our products the better our ability to survive. Never doubt that there are a great number of other industries that want our customers badly. They would love to see us go away! And they will use every ruse and distortion to accomplish their goal of eliminating us.

As a side note, it’s interesting that whenever actual customers, that is actual users of our products and services are interviewed, we are viewed quite favorably when compared to banks, credit card companies and more.

So… if you’re interested in starting a payday loan business, entering the car title loan industry, offering Rapid Tax Refund products or, for that matter, starting any kind of business that is new to you, do not fear the initial difficulties you’ll encounter. Consider these impediments to simply be part of “weeding out the chafe;” the elimination of the lazy and the incompetent.



Payday Loan Lenders – ATM Fees – Overdraft Fees = 400 Percent APR

The payday loan industry is becoming more sophisticated and reaching deeper into their pockets in order to thwart negative payday loan legislation.

A link over at Nick’s PDL Industry Blog brought this to our attention.

Payday lenders are gearing up for an alternative strategy. The industry believes it has found new support in arguing that payday loans, with annual interest rates that can reach 400 percent, are a cheaper alternative to overdraft charges. The industry is citing a recent USA Today analysis based on data from Moebs Services, an economic research firm. According to the analysis, consumers pay an overdraft fee of $26.68 every time they overdraw their account. So if consumers overdraw by $100, they’d pay an annual percentage rate (APR) of 696%, if the credit is paid back in two weeks – compared with an APR of 450% on a $100 payday loan with an average fee of $17.25, according to USA Today.

“The focus on overdraft protection on the Hill has helped legislators to understand that payday lending can be looked at as a cheaper alternative to overdraft charges,” said Steven Schlein, a spokesman for the Community Financial Services Association, the trade group for payday lenders.


The Secret – Payday Loans – Car Title Loans – Scrap Gold Business – How to Get the Info You Need

The Secret – Payday Loans – Car Title Loans – Scrap Gold Business –
How to Get the Info You Need

The information and help you need for your micro-lending business
is there for the asking. You’ve just got to learn the SECRET!

Because we not only offer consulting and training but we actually
“DO” payday loans, car title lending, scrap gold buying and more…
plus the fact we dominate the Internet in these niches… we find
ourselves on the leading edge for micro-lending “how-to
information.” Got a new product or service for our industry? You’re
gonna contact us and let us know about it. After all, we get
hundreds of phone calls and emails each week from new and existing
operators looking for help. Any vendor, supplier, potential or
existing operator performing their due-diligence is going to bump
into us. So of course, we expect to hear from them!

And yet it astounds me how reluctant many payday loan and car title
lender entrepreneurs are to tap into the network of pros in our
industry. Just consider all the existing operators, vendors,
suppliers, national and state organizations there are, who are up
to their eyeballs in our industry. Every day these industry
insiders are fielding phone calls and emails, answering questions,
tracking down rumors, explaining their services and investigating
their competitor’s products and services.


Our training materials list dozens of ACH providers, payday loan
and car title loan software solutions, I.D validation services,
compliance pros, legal experts, industry trade magazines, insurers,
bond agents, investors, regulators, reloadable debit cards, web
site developers, Check-21 services, consumer account verification
services, collection data bases, fraud prevention, check cashing
solutions, Internet lending turnkey solutions, OFAC help, stores
wanted, stores for sale, call centers, collection/debt recovery,
debt purchasing, rapid tax refund turnkey solutions, and on and on
and on…

Whether you’re a potential or existing operator CALL THEM! Ask
questions. Don’t be afraid to tell them your situation! You’re
brand new to the business? Let them know. You’ve been in it 100
years? No problem. Payday loans, car title loans, scrap gold
buying… they’re all dynamic industries! New models, technology,
rules, associations, legislation and more are introduced all the

Look, you’re busy running your business every day. You can’t
be expected to remain current on every aspect of these fast paced
businesses. So… set aside an hour each week to reread our
training materials and place a few phone calls. Prepare a couple of
questions ahead of time AND WAIT FOR THE RESPONSE!

Remember the old saying, “We have two ears and one mouth”, so ask
your question and then shut-up and listen. This is an art that many
of us, myself included, need to master.

Now this is important! I’m not suggesting you pick up your phone
on a whim or shoot-off an email every time you you need an expert
opinion about some aspect of your business. These people have time
constraints just as you do. Again, do a little research on your
own, prepare a few questions ahead of time and then allow yourself
to digest their response. Make it clear where you are in your
discovery process and end with a gracious, “Thank You.”

*************Our Sponsor******************************************
Vendors and suppliers: Reach over 5000 readers:


You’re brand new to the industry and you need info regarding payday
loan software. Call a minimum of three vendors listed in our Payday
Loan Training Manual or our “Payday Loan Internet Report” and
arrange for a free demo. Prepare a list of open-ended questions for
the sales rep. Ask them and then simply sit back and listen. Let
her know you’re brand new!

We’re not going to cover every conceivable question but after
asking questions such as:

What features and benefits does your payday loan software offer
that your existing customer base most appreciates?

What states/provinces/counties due you currently have clients in?

Are you integrated with any ID validation services?

ACH providers?

Collection tools? Templates? Email integration?

Back-end accounting functions?

What other products and services will your software support?

Veritec integration?

CSO capability?

Web Based?

Lead integration?

NOW! Don’t hangup the phone yet! Ask for their thoughts on the
current state of the industry and about your specific
state/province. Ask them for the contact info for a couple of their
clients located in your geographic area. Ask them if they offer
clients of Jer and Trihouse Payday Loan Consulting a discount AFTER
you’ve already been quoted a price for their software solution. Ask
them about upcoming association meetings and conventions. Ask them
what they think it takes to get started in the business.

Finally, remember to thank them!!! And if you’re impressed with
their knowledge and helpfulness, let their boss know with a quick

Then, digest what you just heard. It’s rare (but possible) to find
an unbiased sales person. So… try to imagine what their agenda is
and weigh this when developing conclusions about what you were just
told about the industry and their product or service.

There really are some truly great and extremely knowledgeable
vendors, suppliers, and operators in our industry. Many of them are
specifically mentioned in our training materials. You’ve got to
learn to reach out to them and LISTEN!

Then, one day when you get that call from the “newbie” or seasoned
micro-lender asking for your help, remember!

Remember to give a little!!

Micro-lending is a profitable and fascinating industry. Now go make some MONEY!

Questions? Comments? Ideas?


Payday Loans: Ohio Still going Strong

Although Ohio voters supported a measure to reduce payday loan maximum Annual Percentage Rates to 28%, the payday loan industry is still going strong in Ohio.

Could it be that the VOTERS in Ohio are not the payday loan CONSUMERS?

Legislators, regulators and so-called “consumer protectionists” cannot legislate DEMAND for payday loan type products away. Consumers have always needed access to small, short-term, non-collateralized loans. And in today’s economy the need for payday loan type products is even greater!

In 2008, the Ohio state legislature voted to rescind the 12-year-old law that exempted payday lenders from the state’s usury laws — a vote Ohioans supported 2 to 1.

HB 545 was supposed to help consumers by creating a Short-Term Loan Act that gave borrowers at least a month to pay off loans. Additionally, the new law was supposed to drive down the costs.

Instead, many payday loan operators chose to close their stores and leave the state. Those that remain explored alternative approaches and as a result, are prospering due to less competition and creative tactics allowing them to remain in business.

The Short-Term Loan Act specifically capped the APR at 28 percent. As a result, payday loan lenders switched their licenses so they could offer payday clones under two parallel lending statutes, the Small Loan Act or the Mortgage Lending Act.

By adjusting the loan amount to just above $500, payday loan lenders double the loan origination fees from $15 to $30. The Small Loan and Mortgage Lending acts allow the fees on top of the 28 percent interest, something the new law doesn’t permit.

Last year, payday stores gave loans to customers as cash or an ACH into their bank account, but this year lenders present loans in the form of checks or money orders, which they then charge additional fees to cash.

As an example, when a payday loan was transacted previous to HB545 a payday loan customer paid $575 to receive $500 in cash.

Under the new HB545 licensing scheme with the check cashing fees added, customers pay the same $575 to walk out the door with $500 in cash.

Ohio lender CheckSmart Chief Executive Ted Saunders says that technically CheckSmart makes less on loans because customers may choose to cash their money orders elsewhere. Saunders said CheckSmart gives loan customers a discount on check cashing and ensures that customers don’t spend more now for loans than they did last year. For the borrowers who deposit or cash their checks at their own bank, their real cost for a two-week $400 loan is under $30, which is less than the $60 paid by them under the former payday loan law and less, according to the FDIC, than the cost of an overdraft at an FDIC bank.

Prior to HB545, Lenders typically charged $15 for every $100 borrowed. Now prices are all over the map. We expect this situation to flatten out with time in Ohio.

A First American payday loan customer indicted he previously paid $75 for a $500 loan, First American charged him a total of $90 to borrow the same amount after the law changed.

More than one Ohio payday loan company has structured their check cashing and loan operations as two separate entities to justify the fees.

Attorney General Rich Cordray said his office has found payday clones with APR’s ranging from 128 to 700 percent.

“It’s very problematic,” he said. “What we have is overlapping statutes. . . . I think it very clearly circumvents the legislative intent.”

Ultimately, there is a lot of confusion in Ohio as a result of the the attempt by fools to legislate away a product that millions need, want, use and demand!