Here it is! Our newly updated 500+ page Manual. We thoroughly explain step-by-step how to start & operate a profitable consumer loan business.
The Course: “How To Start/Improve a Consumer Loan Business.”
If you’re worn out spending hour upon hour searching Google for consumer loan business strategies, know-how, software, licensing, consumer credit reporting, sample contracts, collection tactics, profitability, how much start-up capital you need, anticipated default metrics, and on and on and on… Our “Bible” delivers ALL THESE ANSWERS AND MORE! Answers to how profitable are they? How much do these businesses earn? Do you need a license? We update our “Bible” every 3 months.
NOTE: We are consultants for entrepreneurs who want to start or improve their payday loan business operations. We are not Lenders. We teach, consult, offer Courses and provide boot camps and phone consulting services enabling entrepreneurs with a desire to enter this industry to avoid failure. We opened our first location in 1998 in Garden Groove, Calif. Today we own stores and online lending portfolios. Additionally, we teach, lecture, speak, consult entrepreneurs and companies in “The Business of Lending to the Masses.”
In Canada, a payday loan is a short-term loan with high fees for solving immediate, short-term financial emergencies.
Payday loans are “expensive” money. Generally, depending on the Canadian Province, a payday loan consumer may borrow up to $1,500.
Borrowers must pay the loan back from their next paycheque. Failure to pay back these loans on the promised due date result in more fees and interest charges.
This will likely increase your loan principal.
Payday loans are designed to solve a cash shortfall until your next pay. Avoid using them for ongoing costs such as rent, groceries or utility bills. If you use them in this way, you may end up in financial trouble.
Both private and publicly traded companies offer payday loans in stores [brick-n-mortars] and online.
Here’s what you can expect if you’re considering opening a payday loan company.
Next:
Generally, payday lenders will require proof that a consumer has:
Before funding a payday loan, payday lenders will require borrowers to do one of the following:
In most cases, the payday lender will deposit money into your bank account via an ACH, a check or, in a storefront environment, give the borrower cash.
However, in some cases, payday lenders may require the borrower to take accept loan proceeds on a prepaid card. It may cost extra to activate and use the card.
Some payday lenders require consumers to repay the loan at the same location where they got the loan. Others offer online payment. We recommend and teach how a Lender can offer a multitude of payment methods both online and offline.
Make certain you employ loan management software to compute all fees, payment periods, loan principals, payment schedules, APR’s… We teach all this in our Course! Payday lenders must require their borrowers to sign an agreement that shows your loan costs, including interest, fees, and the due date. FULLY disclose EVERYTHING to the consumer! [Our Course offers names and recommendations to the best companies offering cloud-based software enabling you to run a payday loan business from anywhere in the world!]
A payday loan, installment loan, car title loan… Lenders can make great profits. There are zero guarantees because profitability depends on the Lender.
Payday loans are very expensive compared to other ways of borrowing money. This is because:
As a Lender, be aware that a payday loan business is not all “peaches and cream!” Whether online, storefront or “blended,” you will have costs, headaches, employees…
But, the potential for earning a SUPERIOR Return on your Investment [ROI] is tremendous.
After all, your inventory is MONEY! You are nor investing in and operating a fruit stand experiencing rotting inventory 😆
With hard work, knowledge, implementation of the latest technology and tactics, Lenders can grow big, earn extraordinary profits and achieve a very nice lifestyle. BUT, at least in the beginning, IT WILL BE HARD WORK!
Figure 1: Comparing the cost of a payday loan with a line of credit, overdraft protection on a chequing account and a cash advance on a credit card (Based on a $300 loan for 14 days)
The costs shown in this example are for illustration purposes only and are based on the following assumptions:
There can be serious consequences if borrowers don’t repay their loan by the due date.
They may include:
If you can’t make your payday loan payments on time, it can be easy to get stuck in a debt trap.
Infographic: Payday loans: Make sure you pay on time!
What to know to be a payday lender
The total cost of borrowing you can charge. Be sure to find out:
Understand that:
Ask if there is a “cooling off” period. This is a period, often a day or two, during which a borrower can cancel the loan with no explanation and without paying any fees. The laws in many provinces protect this right. Make sure to know the “cooling off” period information.
Payday lending rules
Each province and territory has different rules and restrictions around payday lending. However, many online payday lenders aren’t licensed and don’t follow provincial rules designed to protect borrowers.
Many provinces regulate payday lending fees and penalties.
NOTE to Payday Loan Lenders! Laws, rules, compliance, regulations are in constant flux! The information below is almost CERTAINLY not current as you read it! Invest in our Course for the latest, most current information!
Province | Maximum cost of borrowing for a $100, 2‑week payday loan | Cooling off period to cancel the payday loan | Maximum penalty for a returned cheque or pre-authorized debit |
---|---|---|---|
Alberta | $15 | 2 business days | $25 |
British Columbia | $15 | 2 business days | $20 |
Manitoba | $17 | 48 hours, excluding Sundays and holidays | $20 |
New Brunswick | $15 | 48 hours, excluding Sundays and holidays | $40 (default penalty) |
Nova Scotia | $19 | Next business day | $40 (default penalty) |
Ontario | $15 | 2 business days | n/a |
Prince Edward Island | $25 | 2 business days | n/a |
Saskatchewan | $17 | Next business day | $25 |
In the following provinces, a payday lender can’t extend or roll over a payday loan:
A payday lender can’t ask a borrower to sign a form that transfers your wages directly to them in the following provinces:
Provincial laws define what a payday lender can do when trying to collect a loan. This includes when and how often a payday lender can a borrower and what tactics you can use to get you to pay.
These laws exist in the following provinces:
Canadian Entrepreneurs: