How to Start Your Own Payday Loan Business

Oct 05

How to Start Your Own Payday Loan Business

As the demand of payday loans continue to rise, there are plenty of entrepreneurs that are able to take the opportunity to start a payday loan business of their own. It is a huge business opportunity and one that anyone could become a huge success at doing.

Payday loan business is in high demand because there are consumers in a variety of different countries such as Korea, Japan, The Bahamas, Australia, United Kingdom, and more!

Since there is a lot of fragmentation when it comes to the payday loan business, it is hard to tell the size of it. Sole proprietors and trading companies are the main type of businesses that own payday loan companies. With that being said there are millions of dollars that have been issued to these people to lend out loans to the consumers. To be precise each month the number is millions of people that are getting a payday loan. No one is keeping track of just how many of these transactions are going through each month.

Before you totally decide that you want to take on the business of payday loans, there are some things that you should first consider; steps that you will need to take for starting the business.

Licensing Model

Licensing implications need to be taken into consideration if you plan to go about the Brick-n-Mortar method for a payday loan business. Each state varies when it comes to the legislation of a payday loan company; you will need to check with the state that you live in to find out what these regulations are. What most of the regulations will state are the maximum funds that will be loaned, how many rollovers are allowed, outstanding balance time frame, and the amount of fees that can be charged. On top of this, the entrepreneur must decide which method he would like to go with when it comes to issuing the loans. Some of the options include:

  • Installation loan model
  • Sovereign Nation model
  • Offshore Model
  • Choice of law model
  • CSO model

Software

After you have taken action and have completed the above for starting your payday loan company, you would next need to decide on what type of software you plan to use to run your online company. For different types of loans there are different software programs available. It is important to choose your software wisely, because the software you choose can determine how successful your online payday loan business will be with attracting clients. With that being said, choose software that has an easy interface to navigate on.

Buy vs Build

Would it be best to buy a payday loan business that already exists, or should you start from scratch and build your own?

Marketing

When using the Brick-n-Mortar method for your payday loan store, you will be basically using the same marketing technique as the majority of online businesses. This would include:

  • Newspaper
  • Greensheets
  • Radio
  • Billboards
  • Business cards
  • Direct Mail
  • Televised Advertisements

There are some others that aren’t listed, but you have a large array of options for marketing purposes to choose from.

Author Bio: Larry Smith works for OnlinePaydayLoans.net a short term approach for families in need of loans.