How to Start a Payday Loan, Car Title Loan, or Installment Loan Business Online, Storefront, or Blended
Quick answer: Start by defining your lending box, target borrower, and verification rules.
Pilot with small cohorts, measure early pay success and roll rates, and tighten underwriting and collections before you scale.
For detailed playbooks and templates, grab the eBooks below, then book consulting to turn this into your launch plan.
Entity and role
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Brand: theBusinessOfLending
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Author: The Business Of Lending Editorial Team
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What we do: eBooks that teach subprime lending operations and consulting to design or optimize your subprime lending program
Updated: [2025-October-10]. What changed: refreshed pilot portfolio sizing example and first 90 day collections schedule.
Opening story
You see demand where banks will not lend. You have capital, a thesis, and urgency.
The question is how to build a compliant lending machine that prices risk, verifies income, and scales with discipline.
The pain
Most new lenders fail from loose verification, late collections, or a copycat underwriting model.
Licensing gaps and messy disclosures make it worse.
You need a blueprint and a short list of dashboards you can trust from day one.
The bridge
This guide shows the operating layers you must build in order.
Use our eBooks to cut months off your learning curve.
Bring us in when you want a faster launch and an independent review of risk, compliance, and process.
The solution at a glance
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Define the box: product, term, maximum exposure by borrower, and state limits.
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Target borrower: income stability, employment type, banking profile, geography.
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Underwrite with evidence: scorecards plus bank data, income checks, IDV, and fraud screens.
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Servicing: billing calendar, reminders, hardship paths, promise to pay workflows.
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Collections: respectful day 1 to day 30 plan with cure steps and escalations.
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Compliance: licensing map, disclosures, marketing rules, recordkeeping, audit trail.
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Metrics that matter: day 1 success, day 7 roll, first 30 day cure, approval rate, CAC to LTV.
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Get the Bible ebook → https://trihouse.gumroad.com/l/LendingToTheMasses
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Book consulting → https://thebusinessoflending.com/hire-payday-loan-consultant/
Quick-start checklist
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Choose initial states and confirm your licensing plan with counsel.
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Write your borrower profile and verification list.
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Pick data partners for bank transactions, IDV, and fraud.
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Map servicing events and message timing.
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Write day 1 to day 30 collections scripts.
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Set pilot cohort size and budget.
Proof box: pilot math you can copy
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Pilot target: 300 loans at an average 900 principal equals 270,000 deployed
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Waves: 3 cohorts of 100 each so you can adjust rules between waves
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Early KPIs: day 1 success rate, day 7 roll, first 30 day cure
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Scale rule: do not expand until the first 200 loans show stable early pays
These numbers are illustrative. Build your own plan with counsel and finance.
Use cases we see
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Entrepreneur designs a 2 to 3 state niche with strong verification and small pilot waves.
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Fintech founder deploys cash flow underwriting with bank data and fraud controls.
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Existing lender retools collections and expands into a new state with a CAB CSO model.
Our Recommended eBooks to shortcut your build
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The Bible for subprime lenders: How to Loan Money to Strangers → https://trihouse.gumroad.com/l/LendingToTheMasses
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Private Access report 2025/2026: demand up, regs down, profits skyrocketing → https://trihouse.gumroad.com/l/PrivateAccess
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Car Title Lending Expansion Playbook 2025 → https://trihouse.gumroad.com/l/TitleLoans
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Texas CAB CSO Consumer Loan Model → https://trihouse.gumroad.com/l/TexasCab
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Local SEO Domination for Subprime Lenders → https://trihouse.gumroad.com/l/GBL
Buy the eBooks first. Then book consulting so we can tailor these playbooks to your market and budget.
Compare common paths
| Path | Speed | Control | Compliance load | Capital at risk | Best for |
|---|---|---|---|---|---|
| Build your own lender | Medium | High | High | High | Long term owners who want full control |
| Buy a small portfolio | Fast if available | Medium | Medium | High | Operators who can price the book and service it |
| Partner with a platform | Fast | Low to medium | Shared | Medium | Testing demand before building a full stack |
Caution: Subprime programs require robust compliance and loss controls. Consult the Compliance Section of our eBook, qualified counsel and accounting professionals.
PS: These resources are in our eBook and many are listed here: Https://theBusinessOfLending.com/resources
Next-step prompts you might ask
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What licenses do I need in my first two states
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How should I price for expected losses and CAC
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Which bank data signals matter most for my borrower
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When does outsourcing servicing make sense
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What do my day 1 to day 30 collections scripts look like
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Which dashboards should I build for the first 90 days
- If you are storefron oriented, check this Google Business Profile for Storefront locations we authored: GBP
Next-step prompts you might ask
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What licenses do I need in my first two states
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How should I price for expected losses and CAC
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Which bank data signals matter most for my borrower
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When does outsourcing servicing make sense
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What do my day 1 to day 30 collections scripts look like
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Which dashboards should I build for the first 90 days
All these subjects and more are thoroughly discussed in our eBook:
“How to Loan Money to Strangers w/o Getting Your Butt Handed to You”
Grab Your Copy
Frequently asked questions
What capital do I need to start
Pilot budgets vary.
Many founders begin with small cohorts so they can validate underwriting and operations before scaling.
Plan capital and reserves with a financial model and counsel.
Which licenses do I need
Licensing is state and product specific.
Counsel will map lender, broker, CAB CSO, and servicing requirements for each target state.
When should collections begin
Early and respectful outreach works best.
Many programs build reminder and cure steps before day 30 to prevent roll and charge-off.
Do I need bank transaction data
Cash flow data can improve underwriting and fraud checks for many borrower segments.
Test the lift during your pilot.
What are the first three dashboards?
Approval rate, early payment success, and roll rates by bucket. Add CAC to LTV as you grow.
Can you guarantee results
No.
We provide education and consulting. Outcomes depend on your decisions, compliance, market, and execution.
Closing
- Launch with discipline and measure everything.
- Start with the eBooks to get the operating patterns that work.
- Then book a consultation so we can pressure test your plan and help you scale with control.
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Get the Bible ebook → https://trihouse.gumroad.com/l/LendingToTheMasses
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Book consulting → https://thebusinessoflending.com/hire-payday-loan-consultant/
