THE BUSINESS OF LENDING

Money to Strangers.

Underwriting. Collections. Compliance. Technology. The Business.

THE COMPETITION YOU MAY BE UNDERESTIMATING

Your Next Borrower Already Has 5 Lenders.

None of Them Have a Storefront.

14 cash advance apps. $3,899 advanced. Approximately $368 in reported costs. And one uncomfortable question for every payday, title, and installment lender.

I've been lending money to strangers for a long damn time.

And I've learned something about competition.

The competitor that hurts you most isn't always the guy opening a new store across the street.

Sometimes it's the one already living on your customer's phone.

EarnIn. Dave. Brigit. MoneyLion. Cleo. Klover. Grid.

Different companies. Different products. Different fee structures.

But they're competing for something every storefront and online lender needs.

The consumer's attention at the exact moment that consumer needs money.

The Numbers That Got My Attention

I came across a website called Cash Advancement Apps.

Its author documented advances and fees across 14 different apps between September 25 and October 8, 2026.

Here are the approximate totals published in that comparison.

These are the source's published approximate totals, not audited figures or a representative sample of cash advance app users.

Now look at what the author reported paying.

Source: Cash Advancement Apps, October 2026 comparison. Figures reflect the author's reported experience. The ~ symbol indicates estimates; + indicates incomplete or minimum costs. The published totals are reproduced as reported. Cost per $100 is not APR. Actual fees, available amounts, subscription requirements, and repayment terms vary. The approximate total row should not be treated as an independently reconciled calculation.

Stop Staring at the Fees. Look at the Borrower.

The easy reaction is to start calculating APRs, complaining about subscription fees, and arguing about which of these products should be regulated as loans.

Those are legitimate questions.

But I see a bigger operating issue.

What happens when a consumer can access multiple cash advance apps before applying for your $500 installment loan?

Let's walk through it.

A customer walks into your store.

She earns $4,000 a month.

Your system verifies the deposits.

Credit looks acceptable under your policy.

Your loan officer approves $500.

Everybody's happy.

Except suppose three cash advance apps are scheduled to recover money from her bank account around payday.

Your income verification says $4,000.

Her checking account may be telling a very different story.

Now comes your first payment.

And suddenly you're wondering why a borrower with verified income couldn't make a $150 payment.

You verified how much money she made.

Did you verify how much was already spoken for?

That distinction may be the difference between a performing loan and a first-payment default.

Threat #1: They're Reaching Your Customer Before You Do.

Your storefront opens at 9 a.m.

Your customer needs gas money at 7:15.

Which lender gets the first opportunity?

The one with the best billboard?

The store with the best Google reviews?

Or the app already installed on her phone?

The consumer doesn't necessarily care what you call the product.

Cash advance. Earned wage access. Installment loan. Payday loan.

She has a problem.
She wants money.
She wants it now.

And whoever removes the most friction gets a serious competitive advantage.

Threat #2: They're Competing for the Same Paycheck.

For decades, lenders have spent enormous amounts of money verifying income.

Pay stubs. Bank statements. Employment verification. Income verification vendors.

All valuable.

But income doesn't repay loans.

Available cash flow repays loans.

If an applicant has several repayments, subscription charges, or other withdrawals scheduled around payday, those obligations may compete with your payment.

And not every one of those transactions will necessarily appear as a conventional loan on a credit report.

That doesn't mean every cash advance app is creating harmful debt.

It means your underwriting should understand what is actually happening to the account from which you expect repayment.

The applicant's gross income is history.

The available money on payment day is your future.

Threat #3: They're Changing What Borrowers Expect.

Once a consumer has requested cash on a phone and received a quick decision, it's hard to get excited about a 45-minute application process.

Your competitor may have spent millions developing that technology.

But your borrower doesn't care about your competitor's development budget.

The borrower cares about convenience.

How many screens does your application require?

How many documents must the applicant upload?

How long does it take to receive a decision?

And how many qualified applicants leave before funding because you made the process unnecessarily difficult?

You don't have to approve bad loans to deliver a better borrowing experience.

What I'd Do If I Operated 40 Stores Tomorrow Morning

I wouldn't start by asking marketing to buy another thousand leads.

I'd start with five questions.

1. How Many of My Borrowers Use These Apps?

I'd examine a representative sample of funded loans using bank transaction data we're legally authorized to access.

Look for recognizable cash advance deposits, repayments, and subscription charges.

Separate actual repayment obligations from transfers and unrelated transactions.

2. Do Those Borrowers Default More Often?

Compare first-payment defaults and 30-day delinquency rates.

New customers versus repeat customers.

One app versus multiple apps.

Then control for other risk factors. A correlation is not proof that an app caused the default.

3. Are We Losing Good Applicants Because We're Too Slow?

Measure application abandonment.

Measure time from application to decision.

Measure time from approval to funding.

Then identify the unnecessary delays that can be removed without weakening compliance or underwriting.

4. Are We Underwriting Income or Repayment Capacity?

Income verification is important. But knowing what remains after recurring financial obligations is potentially more useful for assessing affordability.

Test whether permitted cash-flow signals actually improve your ability to identify loans that will perform.

5. What Are We Giving Customers a Reason to Return For?

If you have a successful repeat customer, why should that customer have to start from scratch each time?

Could appropriate returning customers receive a more convenient experience, subject to current underwriting and applicable lending requirements?

Can you compete on reliability, customer relationships, transparency, and a repayment structure that matches the customer's actual needs?

Because if the only thing your company offers is access to cash, you're competing against every app that offers access to cash.

The Fight Isn't Over the Store Across the Street Anymore.

For years, storefront lenders watched competitors open across the parking lot.

We watched their prices. Their signs. Their hours. Their advertising.

Meanwhile, the competition started showing up inside the borrower's phone.

No storefront required. No drive across town. Potential access to cash in minutes.

Some of these apps may be more expensive than their marketing suggests. Some may be cheaper than traditional credit for certain consumers.

And some may be better suited to a small, short-duration cash shortage than a conventional installment loan.

That's not the point.

The point is that traditional lenders are no longer the only familiar option when a consumer needs money between paychecks.

You can lobby for more regulation. You can argue about the definition of interest. You can complain about subscription fees.

Fine.

But none of that answers the question your customers are asking.

Why should I borrow from you instead?

If your answer is simply "Because we've been here for 20 years," you've got work to do.

The winning operator will understand the competitive alternatives, modernize the borrower experience, protect underwriting quality, and deliver a product that actually solves the customer's problem.

One last question for your next management meeting:

If your best customer can solve a $200 emergency with three taps, what exactly are you giving that customer a reason to come back for?

That's the business of lending.

Until next time,

Jer Ayles

The Business of Lending
TheBusinessOfLending.com

Practical intelligence for payday, title, installment, and other subprime lenders.

The Business of Lending
Independent commentary and analysis for consumer lending professionals.

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