By Jer Ayles: Face Facts, Small-Dollar Lenders!
A Biden Presidency means certain “pain” for Lenders. Business to Consumer [B2C], Business to Business [B2B], MCA [Merchant Cash Advance], payday loans, installment loans, car title loans, line-of-credit loans, Fintech, wage advance… all will face increased scrutiny, compliance issues, and increased legal costs.
Of course, CONSUMERS will be the biggest losers because we still have roughly 40%+ of USA households who cannot access $400 cash when facing a financial emergency! And it’s these high-risk folks who must pay for access to our cash. No one else will lend to them! Banks & credit unions are dragged kicking and screaming into our space by the FED’s. This will continue to take years. But the majority of these incumbents disdainfully believe they have built insurmountable moats and lack the vision to acquire or collaborate with us. Failing this trend, they will go the way of the dinosaur.
Lenders, have no fear!
“The business of lending to the masses” will continue to scale. Even during Covid and as the government printing presses continue to run, transaction volume is ticking up. Debt, borrowing, unexpected financial challenges, instant gratification… this DNA is in all the people of the world. Corona will end. The dollar and the Euro “printing press” will stop. We’ll get back to living our lives. Another group of knuckleheads will be in charge. And round & round so goes the world.
What To Do? Focus on reducing overhead costs! Automate. Embrace AI. Reduce headcount while scaling transactions! Integrate with the tools already available TODAY!
Our industry has always been under constant threat; kinda like Trump. The only demographic that likes us is OUR CUSTOMERS! Unfortunately, our elite media & elected representatives do not care about our customers unless it’s election time. The bureaucrats in D.C. along with Fintech “lenders,” “Buy Now & Pay Later” embedded Apps, wage advance platforms, Fintech “leave a 15% default tip + $4.95 to accelerate your $75 loan via ACH + help us plant a tree, remnants of Operation Choke Point, bank discontinuance issues, this recurring universal 36% APR cap theme running through State and Federal hallways and on and on… continue to attempt to destroy us. And yet here we are! $40B in fees last year! Our industry has some of the very brightest, savvy, connected, sophisticated entrepreneurs in ANY vertical! Why? Because our inventory, our product, our service IS MONEY! AND EVERYONE WANTS SOME!!
There is a multitude of solutions available NOW that will reduce your customer acquisition costs [CAC], easily & cheaply verify your applicant’s ability to pay, underwrite, process, fund, collect, and remarket. Wash, rinse, dry, repeat. That’s the cycle that guarantees your success. This is the history of mankind. [Again, read “Debt: The First 5000 Years.”]
YOUR key to success is awareness! Did you enjoy your latest Zoom Convention? Learn anything? Enjoy the after-hours bar scene like the good old days? Were you able to sort through all the B.S? I know! You need to hire a… NAME YOUR POISON! A lawyer perhaps 🙂
Here’s the skinny! The following NEW tools are what YOU NEED!
- Customers. If you’re already in business PAY for referrals. The average CAC today is $287. Pay your current customers a referral fee IMMEDIATELY. If you’re a brick-n-mortar, offer to pay $50 cash if your current customer refers a friend who qualifies for a loan; any size loan. It’s not your referral customer’s fault their “friend” only qualified for $125! Pay via ACH, the Cash APP, PayPal, a credit to their debit card… WHATEVER! Online Lenders MUST follow this strategy as well. A $50 funded customer IS A STEAL! Do you really want to continue to buy $5.00 leads with 2% conversion rates? And not own the customer data?
- Instant Wage & Income Verification: IWVPro.com is your path to collaborating with a white-labeled Fintech platform enabling you to instantly in real-time verify the income claim(s) your borrower/applicant provides to you. IWVPro.com is virtually a data pipe to thousands of the largest employers in the USA & Canada. ADP, Walmart, Target, Uber, Lyft, Del Taco, Pizza Hut, Kentucky Fried Chicken, Best Buy, UPS, USPS… AND GROWING WEEKLY! It’s cheap & immediate! Will you get a “hit” 100% of the time? NO! [Just like IBV] It is a must tool! You get the wage data BEFORE it hits the bank statement. What? Your customer claims they cannot make their payment this week because they were laid off or their hours were reduced? B.S. You can determine they drove 12 hours last night for Uber, earned $180, driving a 2017 Toyota Camry license plate IOUMONEY, 7 rides covering 112 miles! You can tell them you know this WHILE YOU ARE ON THE PHONE WITH THEM! Again, visit https://iwvpro.com/ for details
- Instant Bank Verification: the good old days of faxing bank statements are long gone. So is the need for customers to bring in their Photoshopped statements! Instant, real-time bank statement views have been around for a while. I know who does it cheaper, faster, stronger, more powerful than a locomotive… Oh, wait! Sorry, went off track. That was Superman. Just want to make certain you’re still reading my diatribe. If you are, text IBV and your name and email to 702-208-6736 and I’ll intro you to the VERY best & the brightest IBV provider in our industry. And, I PROMISE YOU this won’t cost you an extra dime! Jer
- Artificial Intelligence for Bad Debt Negotiation: IOUUmpire.com is your connection to the white-labeled platform enabling you to settle your 30+ day “bad” paper with your customer without USING YOUR EMPLOYEES or a CALL CENTER! Your past-due customer is dead to you? Zero communications? Phone calls, direct mail, employer, text… = nada? So, your only option is to sell your paper for $.04 on the dollar? NOPE! The customer owes you $1000 and will not talk to anyone in your office? Provide them with a link to YOUR BRANDED web page. In your Dashboard, make a decision to settle with this “bad boy” for any amount you choose. In this example, let’s say $200. [$1000 sold at $.04/dollar = $40.] Your message is nice and friendly; folksy. “Dear Mr. Jones, let me make a deal with you that you can’t refuse. You don’t have to talk with a soul. Here’s your personal link. Allow me to cut you a deal and end these ceaseless calls, emails, texts…” Then, just kick back and relax. IOUUmpire’s robot – we call ours Frieda – will “work” 24/7/365 negotiating with your “dead” debtor. Your debtor logs in sees $1000 due, offers $75. Anna counters $833. Debtor counters $125. Anna counters $693. Offer, counter-offer, offer, counteroffer… “Congratulations, we have a deal, Mr. Jones! $397.00” Mr. Jones then lands on your payment page and pays in full or you allow payments. Again, visit IOUUmpire.com to learn more.
- Tribal Lending: Going stronger than ever! This model has become more sophisticated and has evolved substantially since the “Scott Tucker Days.” Just like the casino industry, the tribe Lending Model [TLE] has become much more acceptable to all players and we offer the best talent, resources, and IP available! There is a multitude of federally recognized Native American Indian tribes in search of additional capital to meet the overwhelming demand from borrowers across the USA. You can earn incredible returns on your money. Visit Leaning Rock Finance Consultancy for details.
- $90 funded loans: Want a turnkey funded loan? Don’t want to deal with buying leads & underwriting? Text “Funded loan in a Box!” with your name to Jer: 702-208-6736.
- Mobile App: Do you need a white-labeled Mobile App with your brand/logo… IOS & Android – We are live! Save thousands of dollars and months of time with our latest Phone App! It has YOUR BRAND! It’s YOUR customer for life on that phone. Expand beyond your store boundaries & a website. Text “Mobile App” and your name to Jer at 702-208-6736 for info.
- Payment Processing & Banking: I know them ALL and I know who can get the job done correctly with zero reserves and fair pricing! No B.S. Text Jer at 702-208-6736
- Online Car Title Lending: Want to offer collateralized car title loans in any state without having to engage in a face-to-face transaction? 36% APR capped states not a problem for our Team! These loans are collateralized by the title to the borrower’s automobile! Very low risk. VERY low LTV! We are live! You can run your own show or invest with us and earn a handsome ROI! [Debt/equity/blended deals available. Yes, Jer 702-208-6736
- Finally, there are many more tools for lenders available but I’ll save you from having to continue to FOCUS. Just know that “the business of lending to the masses” is going nowhere but UP! [You can access many of them here where our vendors and suppliers list their services: Click “TheBusinessOfLending.com/Ressources.”
If you want to get down and deep into the weeds with me, reach out. I’m a gun for hire!
- My Team and I offer consulting services for ALL aspects of “lending to the masses.” Whether you’re a de novo or seasoned portfolio in need of counsel, let’s explore.
- The “Bible.” Our industry famous Course: “The Business of Lending to the Masses” currently version 74. We’ve sold over $1M of our courses to virtually EVERYONE in our industry! Want to know ALL the ins & outs of payday loans, installment loans, title loans, state-by-state licensing, Tribal Model, CAC, underwriting, onboarding, processing, software, IBV, IVW, collections, banking, Operation Choke Point, website development, call centers, artificial intelligence platforms, Fintech developments… visit TheBusinessOfLending.com for details.
- Hourly consulting on specific initiatives.
- Flat rate projects. De novo to M & A. and everything in between.
- Recruiting. Do you need to hire a key executive? Reach out. I know everyone available.
- Invest your dollars with experienced operators who are Lending today while employing all the state-of-the-art Tools mentioned here!
- Brainstorming. Do you have an idea? An area you would like to explore? Reach out for a free exploratory conversation. TrihouseConsulting@gmail.com
The Impact of the Biden Election on Our Industry: “The Business of Lending to the Masses.”
Under President Trump appointed Kathy Kraininger, the CFPB revoked portions of the “Payday Lending Rule” that had determined as an unfair and abusive practice to make payday and vehicle title loans without determining a borrower’s ability to repay.
This revocation was executed by regulation after the bureau “reevaluated the legal and evidentiary bases for those provisions and determined them to be insufficient.”
The CFPB finalized its debt collection practices rule. It places limits on debt collectors’ attempts to reach borrowers/applicants and allows borrowers to opt-out of enabling collectors to contact debtors via e-mail, text messages, or “other media.”
The CFPB could revise the final rule before it takes effect!
V.P. Biden has previously stressed that “fair lending” — whether for mortgages, small businesses, or consumer loans — is a priority of his administration. Per LAW360 experts, the CFPB “could continue the development of rules implementing ECOA, including disparate impact, accessibility for limited-English-proficiency speakers, advertising to disadvantaged groups, discrimination based on sexual orientation and gender identity, and small-business lending.”
A President Biden Administration in conjunction with the Supreme Court’s decision in Seila Law means that “consumer finance companies can expect a significant change in the focus and tenacity of the CFPB.” A President Biden will be able to set the bureau on a new path immediately.
IF the Senate remains Republican-controlled his ability to impact a substantial structural change will be minimal.