Tag: payday loan business

31
Aug

Business Valuations for Lenders: Payday Loans, Car Title Loans, Installment Loans…

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At Trihouse Consulting, Expert Consumer Loan Valuations Determine the Precise Fair Market Value of Your Business

How to Value a Consumer Loan Business
How to Value a Consumer Loan Business

A business valuation for a payday lending, car title lending, or installment lending business by Trihouse Consulting will determine the fair market value of any business-to-consumer [B2C] loan company. Estimating the fair value is a nuanced procedure. 

Establishing the actual worth of your lending business is critically important. The valuation process, especially for the consumer loan industry, is challenging. It’s a highly regulated industry requiring intimate knowledge of the loan business environment on a national and state level. The process is not something artificial intelligence [AI] can calculate with a standard formula. After decades of experience, Trihouse Consulting has the practical knowledge necessary to estimate the value of any consumer loan business.

Before we proceed, and while we’re on the topic of acquisitions and investments, does anyone want to purchase a Georgia Pawn shop? Owner retiring; Baby Boomer lacking a family to take over the 25 year business. [A common situation!] Let me know! 

Want to invest in a BHPH operation? 

Do you have car title loan portfolios for sale? 

4 locations offering title loans and installment loans both online and storefront? 

10 locations offering title loans and installment loans both online and storefront?

35+ operation offering title loans and installment loans both online and storefront?

A $2MM+ portfolio backed 100% by a CD earning 10% to 12% annually?

What Is A B2C Loan Business Valuation?

A consumer loan business valuation is the process of determining the economic value of a business or business unit. What’s the company worth to a buyer and seller lacking undue, stressful motivation? 

Generally [WE EMPHASIZE “GENERALLY!], a <$1,000,000 consumer loan store is a multiple of SDE [seller’s discretionary earnings.] >$1,000,000 is typically a multiple of EBITDA. 

A business valuation to unearth the fair market value is necessary for many situations. 

Conducting a consumer loan business valuation to determine the value is essential when selling, buying, or closing a business. It can be a mind-numbing calculation EXCEPT to us! We get excited! We get pumped! To us, a valuation project is structured, disciplined, and exhilarating! Multiple valuation calculations exist for valuing a consumer loan business.

How Does the Trihouse Consulting Valuation Process Work?

Because Trihouse Consulting facilitates consumer lending business acquisitions and mergers, business valuation is in our wheelhouse. 

Trihouse Consulting expert appraisers focus on determining the fair market value of a consumer loan business. Our valuation process entails an in-depth analysis of your lending data, fundamental market analysis, geographic area [state], business model [online, storefront, blended], loan products & resulting margins [payday loans, car title loans, installment loans], and more. In addition to determining fair value, Trihouse Consulting helps identify favorable merger and acquisition opportunities to scale your business goals.

When Will You Need A Consumer Lending Business Valuation?

Lenders offering payday loans, car title loans, installment loans & line-of-credit loans need a valuation in multiple scenarios. 

[BULLETS] These include:

  • Partnership dissolution
  • Estate issues
  • Retirement planning
  • Divorce proceedings
  • Family disputes
  • General asset management
  • Acquisitions
  • Legal circumstances
  • Other cases include ownership changes, merger and acquisition opportunities, and banking credibility evaluations. Also, an objective assessment, establishing fair market value, helps with tax reporting.

The Business of Lending to the Masses Achilles Heel Is A Lack Of Understanding Of Financial Metrics

As an intelligent “lender to the masses,” it is time to stop running your business with your eyes closed. Knowing the worth of your business and how well it performs is enlightening in a life-changing way.

Unfortunately, this is not the consumer loan industry norm. There is an overwhelming lack of knowledge regarding actual loan performance. The majority of lenders operate in a vacuum. They fail to build a network of peers with whom they can share strategies and tactics. A few rely on industry trade shows and conferences. Trust us! You’ll learn more in the hotel bar than sitting in a conference room listening to the lawyers and vendors attempting to sell you their wares!!

Enter The Consumer Lending Industry With Decades Of Experience

Are you thinking about becoming a lender to the masses? The subprime? B2C lending? Do you want to participate and enjoy the > 100%, 200%, 300%, and higher APR loans typical of our industry? Trihouse Consulting will help you identify opportunities in the “business of lending to the masses.” With our assistance, start your path to subprime lending with a sophisticated, advanced understanding of key metrics and financial analytics. 

Trihouse Consulting has the network and connections to deliver profitable investments, acquisitions, and know-how to enable you to avoid typical start-up and acquisition pitfalls.

Benefit From Data-Backed Determinations Only Trihouse Consulting Can Provide

Having entered the business of lending to the subprime in 1998 as lenders ourselves, Trihouse Consulting has an intimate understanding of the analytics, key performance indicators, vendors, and platforms that serve our industry.

Customer acquisition, onboarding, underwriting, funding, collecting employee hires… we know the ropes!

Partnering with Trihouse Consulting means you can acquire the seemingly unattainable data analytics competencies you need to succeed and scale. No need for you to make rookie mistakes! [We already made them over the years!] 

 In short, Trihouse Consulting stands atop a mountain of priceless data from twenty-plus years of collecting detailed lending industry data affording Trihouse Consulting unique abilities and insights. Specifically, we understand past and present industry trends. As a result, we’ve developed data-backed strategies and tactics for clients based on tens of thousands of informed data decisions generated in forty states and ten-plus countries via our loan portfolios, the portfolios of the clients for whom we’ve consulted, and our network of 8,000+ readers of our free monthly Newsletter.

Trihouse Consulting provides expert B2C consumer loan business valuations. Ready to explore with us? Contact us [Jer@TrihouseConsulting@gmail.com] to get started today.

Ready to Enter the Business of Lending to the Masses? Payday loans, car title loans, installment loans… We thoroughly discuss all these loan products. Launch your lending business or improve your existing operation!

Your investment? $297.00 for our 500+ page Manual delivered to your Inbox in minutes.

How to Start or Improve a Consumer Loan Business: Storefront or Internet anywhere!
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27
Jul

PDL Business Intel: Get Your Competion to Spill Their Guts

Posted by / Trends & Tactics

How to get your competition’s employees to spill their guts!

Every installment loan lender, payday loan, car title title loan… consumer lending business owner needs information. As lenders in “the business of lending money to the masses,” I must know what my competition is doing!

I must know what’s working for other payday loan, title loan and installment lenders in my area!

Sit down with your competition’s employees and allow them to spill their guts.

How to “get the dirt” on your competition.

Try Craigslist.com. Run an ad.

How to Start a Consumer Loan Business: Installment Loans, Car Title Loans, Payday Loans, Consumer Loans

How to Start a Consumer Loan Business

Here’s a free template you may use to start:

Job Description

CONSUMER LOAN REPRESENTATIVE & AREA MANAGER

YOUR COMPANY NAME Loans is a short-term consumer finance company specializing in car title, payday loans and installment loans.

We are currently seeking a Loan Representative & an Area Manager to join our growing company and work in our YOUR CITY office.

We are actively recruiting candidates that are looking for a career opportunity with our company. We value the relationships we have cultivated in the communities we serve and expect our employees to be an example of honesty and respect when dealing with them.

YOUR COMPANY NAME Loans has a special approach to business and we only desire experienced candidates that can step up and work towards the exceptional customer service and image we represent.

Consumer Lending Daily Responsibilities to include:

• Providing customer service in person as well as over the phone.
• Processing loans and payments.
• Outbound collection calls.
• Managing defaulted accounts.
• Daily reporting.
• Daily deposits (no cash handling required).
• Handling heavy phone volume.
• General office duties.
• Marketing.

Job Requirements

To be considered eligible for our Loan Representative or Area Manager positions, you must meet the following requirements:
• 12+ months experience with a PDL/title lender (We guarantee we’ll be discreet).
• Excellent customer service skills.
• Computer proficient with full understanding of basic operating systems.
• Basic math skills.
• Excellent communication and organizational skills.
• Ability to multi-task and work in a fast-paced environment.
• Ability to handle heavy phone volume.
• Ability to advance and make serious $$.

Often, your competitors employees are unhappy. Why? Could be they have a crappy boss, maybe the commute is too long, often there is little opportunity for advancement, not enough money… any number of reasons.

So, by reaching out in creative ways to your competition’s employees, you can open a dialog with highly experienced, qualified personnel who are able to provide you with a much different perspective on your business and tactics that will increase your funded loans, improve collections, decrease first-time defaults… 

And, when I’m lucky enough to get a superior candidate, I often hire, collaborate or at least pay them a couple of hundred bucks for their time. It just feels right.

Thinking of starting a consumer loan business but you’re not sure of where to begin?

TrihouseConsulting@gmail.com

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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20
Feb

More Stupid Things Lenders Do

Posted by / Trends & Tactics

Stupid things payday lenders doMore Stupid Things Lenders do.

John Q. called me this morning. He owns a payday loan and car title lending store. He wants to “tighten up” his operation and open 3 more locations. I advised him to get a loan at “your biggest, baddest competitor in your market in order to copy and emulate their contracts, disclosures, licensing, and sales pitches.” In the past, this advice USUALLY helps. BOY DID I SCREW UP! Turns out John’s “biggest, baddest competitor” was CashCall operating in California. 

PRESS RELEASE DEPARTMENT OF BUSINESS OVERSIGHT

Lender CashCall to Pay Restitution, $1 Million in Penalties and Costs to Settle Case with DBO

SACRAMENTO – The Department of Business Oversight (DBO) announced a settlement with CashCall, Inc. that requires the lender to provide restitution to thousands of California borrowers, reform its business practices, and pay the DBO $1 million in penalties and cost reimbursement.

The DBO alleged CashCall used deceptive sales pitches and marketing practices to dupe consumers into taking out personal loans of $2,500 or more even though the customers didn’t need or want to borrow that much money. Here’s how the alleged scheme worked:

  1. In ads, CashCall said it provided personal loans of “up to” $2,600, $5,000 or $10,000. But when consumers called or visited CashCall’s website, they were told the firm did not make loans of less than $2,600.
  2. If consumers informed CashCall they wanted a loan of less than $2,600, CashCall told them they could just give back the amount they did not want in the form of a prepayment. That way, CashCall told consumers, they could net substantial savings on interest payments.
  3. However, CashCall failed to tell consumers that since the loan was for $2,600, the firm could charge unlimited interest rates. On loans of less than $2,500, in contrast, state law generally caps interest rates at about 30 percent. On the loans at issue, CashCall typically charged annual interest of 135 percent or more, and sometimes up to 179 percent.
  4. To make matters worse in these cases, the DBO alleged CashCall often failed to withdraw scheduled monthly payments from customers’ bank accounts. That had the effect of lengthening the loan term and reducing any interest savings.

“CashCall engaged in a large-scale predatory lending scheme,” said DBO Commissioner Jan Lynn Owen.

“This settlement holds the company accountable for its unlawful conduct and compensates the victims of these unscrupulous practices.”

The settlement resolves allegations filed by DBO last year that CashCall unlawfully deceived consumers, filed false reports with the Commissioner and made false representations to the Commissioner.

CashCall will pay wronged borrowers $125 each in restitution. The final number of eligible borrowers and the ultimate restitution total will be determined by a third-party auditor who will examine CashCall’s files.

CashCall’s preliminary review of its files indicates thousands of customers will receive restitution. CashCall must make the restitution payments within 90 days.

State law caps interest rates on consumer and commercial loans made by non-bank lenders. But the limits only apply to loans smaller than $2,500. The law imposes no interest rate restrictions on loans of $2,500 or
more.

To prevent similar violations in the future, the settlement requires CashCall to reform the way it conducts business.

In all ads that market non-mortgage and non-auto loans to Californians, CashCall now will disclose in a “clear and conspicuous manner” that the minimum loan amount is $2,600. Additionally, when customers say they want to borrow less than $2,600, CashCall now will have to tell them the firm does not make loans for less than that amount, that state law caps interest rates on loans of less than $2,500 at about 30 percent, and that the capped rate is lower than the rate CashCall charges. The firm will implement additional consumer protection reforms required by the settlement agreement.

Link to original press release: DBO

Guys, this is just plain stupid if true. Maybe CashCall decided it’s cheaper to pay the mickey-mouse fine rather than litigate. Who knows! Just don’t do stupid stuff!

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10
Oct

How to Survive in The Payday Loan Industry

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Here’s a portion of an ongoing “Thread” by Serge Milman at Optirate.com. You would think we were discussing the payday loan space:

Chase knows exactly what they are doing and has a clear plan on stealing customer base and wallet share from competitors in what-ever local market they enter.

Large Banks – assets > $50b – can easily afford this strategy, and for some, it actually makes sense. But not so for smaller Banks and Credit Unions. Smaller Banks CANNOT outspend larger banks on Branches. The Branch – as a marketing tool – is a failed strategy for smaller Banks (assets < $10b) and virtually every Credit Union.

As such, the only question that remains is how best to utilize limited resources to a) win new and profitable customers, and b) how to expand wallet-share of existing customer base. You are 100% correct that mobile is part of the solution for some demographic segments, but more importantly, Banks and Credit Unions need to develop differentiating products & services, price them appropriately, develop intelligent relationship management plans, and market the products. Seems like Business 101, yet…

The old ways of doing business in the small dollar loan space are just that: Old! Land mines are everywhere. And yet, 20 million+ borrowers are still out there. Will your Team figure out how to meet this demand?

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30
Apr

Payday-Loan-Installment-Loan-EZCorp-Earnings-Call

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Take Away from EZCorp F2Q13 Earnings Call:

Regarding consumer demand:
“The customers’ need for short-term cash is growing. Nearly every study we see, every empirical set of data that we look at agrees that our consumer is terribly under-served. What we also know to be true is that our customers are sophisticated in their choices. They correctly see us as the cheapest and best alternative. They’re well-educated, hard-working people that appreciate the product and services we provide…”

Regarding smart phone penetration:
“In the first half of this year, roughly 6% of our retail sales came from online transactions and over $6 million of our current loan balance was generated online. We expect both of these penetrations to more than double in the next 12 months and grow exponentially in the coming years. Their preferred method of communication with us is quickly moving to their smartphone. That is why we are investing in the technologies that will support our ability to be at the forefront of that communication for years to come.”

Regarding the U.S.:
“Moving to U.S. financial services, we now provide financial services in 490 storefront locations in 16 states and online loan products in five states. The planned expansion in U.S. financial services is on track that we intend to open a total of 65 to 75 locations this fiscal year and intend to offer online products in 12 to 15 states by the end of the year. Most of these states will be where we already operate storefronts successfully and the remaining states will be based on customer need and financial opportunities.”

Regarding Revenue:
“Inside our base business, we are growing our revenues. Total loan balances were $38 million, up 13% from the prior year quarter, of which the online lending portfolio balance represented over $1 million. Our balances inside of Texas grew 7% and our balances outside of Texas grew 17% driven by both new locations and new products in existing stores.”

Regarding product evolution:
“Customers continue to shift from first generation loan products, traditional payday and installment loans to second generation single payment, multiple payment and auto title loan products. Balances related to these products increased 57% driven by auto title loans. Loan fees were $42 million, up 3% from prior year quarter reflecting the shift to lower yielding products.”

Regarding Texas:
“The profitability of the financial services business was negatively impacted by over $1 million during the quarter as a result of ordinances enacted in Dallas, Austin, San Antonio.”

Latin America kicking ass…

U.K biz killed by lower gold prices.

Regarding Australia:
“Cash Converters International Limited, our strategic affiliate in Australia announced that it had achieved a 39% increase in net income during the first half of its fiscal year. Cash Converters’ outstanding performance resulted in a 43% contribution increase at EZCORP.”

You can access the entire earnings call here: EZCorp and here: Seeking Alpha.

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

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

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