What is CAC: Customer Acquisition Costs 101 for Lenders

For consumer loan companies, what is CAC?

Customer acquisition cost, or CAC, is the amount of money spent on sales and marketing required to fund a new customer’s loan. It is calculated by summing a consumer lender’s total sales, and marketing spend and dividing it by the number of new customers acquired.

Lenders can calculate CAC for a given time period or all time and is helpful to compare the effectiveness of different marketing tactics and strategies.

Of course, a lower CAC is better, as it suggests your marketing and sales teams are effective at targeting your customer avatar efficiently.

What is the purpose of customer acquisition?

The purpose of customer acquisition is to find a repeatable, methodical way of attracting customers to your lending business. Your goal is to increase your “book; your portfolio. Consumers by the millions are applying for small-dollar loans daily. You’ve got to get more than your share! You cannot wait for borrowers to naturally come to you.

Your goal is to create an efficient,  systematic, ongoing strategy to acquire new borrowers, service existing borrowers, and grow your “money on the street” in order to scale loan fees generated.



How to Start a Consumer Loan Business: $297.00

Here it is! Our newly updated 500+ page Manual. We thoroughly explain step-by-step how to start & operate a profitable consumer loan business. 

How to Start a Payday Loan Business

The Course: “How To Start/Improve a Consumer Loan Business.”

  • Our 500+ Page Manual: $297.00
  • Topics covered:
  • How to launch a consumer lending business
  • Installment Loans
  • Payday Loans
  • Small Dollar Loans
  • Car Title Loans
  • Personal Loans
  • Signature Loans
  • Non-Secured Personal Loans
  • StoreFront Lending
  • Internet lending
  • Smartphone lending
  • Licensing? State/Province
  • What loan management software to use?
  • Capital required?
  • Profitability?
  • Collections?
  • Borrower Underwriting?
  • Store & Internet Lending tactics & strategies
  • Sample contracts, License apps…
  • Tribe model [“sovereign nation”]
  • Texas CSO/CAB model
  • $297.00 PDF Immediate Download
  • 100% Refund Policy [If you are not happy FOR ANY REASON with our Course, simply email for a 100% refund.]

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.


Subprime Loan Originations Expected to Soar After Q3

A new Bank Rate study is out! [Link below.]


“As the job market cools down and inflation heats up, a new survey from Bankrate indicates that side hustles are a necessity for a growing number of Americans. Former top motivations for side hustling, like paying off debt and saving, have given way to a more pressing need: making ends meet.”


“Unfortunately, due to high inflation and other financial burdens, more side hustlers are working a side job just to make ends meet,” said Ted Rossman, Senior Industry Analyst for Bankrate. “Instead of using this income to boost savings, knock out debt or pay for a vacation, there has been a big increase in people who simply need these funds just to pay for everyday living expenses.”


“41% of U.S. adults who have a side job in 2022 need the extra income to pay for everyday living expenses as compared to 31%in 2019 (the last year of polling), according to a new survey from are putting this money towards savings(17% vs. 24%in 2019) and using it for discretionary spending (26% vs. 36%in 2019).”


Bottom Line? The near-prime will soon be the subprime. Demand for loans is trending up and will continue to scale rapidly. Opportunities abound for Lenders!




Thanks for being a loyal email subscriber. I appreciate hearing from you. Let me know if you ever have any questions. And, you can click on the image to schedule a call!


WANTED: Portfolio/Platform Acquisition

WANTED: Portfolio/Platform Acquisition: We continue to aggressively pursue $10MM+ collateralized loan [vehicle title] portfolios! Reward! Email Jer



A 36% APR on a 2-week loan = customers pay $1.38 per $100 borrowed.

Learn how to start a consumer loan business! Your inventory is MONEY! What could be better? Zip!


Consumer Loan APR Rates

By: Jer Ayles

FALLACY #1: Payday lenders, car title lenders, installment lenders, and all small-dollar loan lenders can earn a profit under a state-imposed 36% annual percentage rate cap.

FALLACY #2: Small-dollar loan customers should simply go to a bank rather than me. My worst critic knows that banks DO NOT WANT my customer! Banks think my customer is a giant PAIN! My customers are not comfortable inside a bank. If you’ve visited a bank lately, you know it requires an act of god to even talk with a banker. Fuhgeddaboudit!

FACT: A report by Professor Victor Stango, “…a 36 percent cap eliminates payday loans. If payday lenders earn normal profits when they charge $15 per $100 per two weeks, as the evidence suggests, they must surely lose money at $1.38 per $100 (equivalent to a 36 percent APR.)”–Economists Robert DeYoung, Ronald Mann, Donald Morgan, and Michael Strain, Federal Reserve Bank of NewYork  

So-called consumer protectionists and competitors [think pawn shops, banks, credit unions, and lenders servicing 640+ FICO consumers via long-term, $3000+ loans] lobby hard for capping interest rates at 36%.

A 36% Annual Percentage Rate Cap in the real world =

  • $100 borrowed would generate $1.38 per month in interest.
  • That’s equivalent to $.10 per day.
  • A $100,000 “book” [portfolio – “money on the street,” would earn $36,000 per year in top line revenue.
  • In other words, $36,000 per year or $3000 per month GROSS.

The Reality?

  • I cannot pay my storefront rent with $3000 in monthly fee revenue with a $100,000 portfolio!
  • I need 2.5 employees. [How much $$$$ in wages and benefits is that in your locale?]
  • My average cost of capital is 12%.
  • Bad debt. My net chargeoffs are 18%.
  • My CAC is $185.
  • Additional line item expenses include insurance, security, underwriting, phones, utilities, licensing, state audit fees, collections, text messaging fees, and loan mngt. fees, office expenses…
  • Taxes.
  • Accounting, legal & professional fees.
  • Unlike credit unions, various community groups & banks, my business is NOT subsidized.
  • While my competitors technically provide <36% loans to a limited pool of subprime consumers, they evade the 36% APR cap by selling expensive insurance products to their customers, products that are NOT included in the loan’s APR calculation. The result? 180%+ APRs.
  • My customers WANT & NEED my loan products! They know my loan product is expensive. I tell them it’s expensive. The fees I charged are plastered all over the walls of my store and on my website. My team doesn’t hide our fees. EVER! There is no need.
  • My customers desire loans of $100 – $500. Who is going to take a chance on them? Not a bank? Not a credit union. Their friends and family, who my customer is too embarrassed to ask for a loan, are OFTEN in the same boat. Where to turn in an emergency? Food, Car repair, medicine, rent…
How to start a loan business

Limited time "inflation Finder Discount!

500+ page Course: “How to Loan Money to the Masses Profitably.” Immediate PDF delivered to your Inbox.

How to start a payday loan business, an installment loan business, a car title loan business...

Look Out! Subprime Lenders Facing Turbulent Times

The Future of the Small-Dollar Micro-Lending Industry

We define small-dollar micro-lending products as relatively small loan principals of $50 to $5000 for seven days to 48 months having APRs of 30% to 1500% or more. These products include payday loans, car title loans, installment loans, line-of-credit loans, pawn, rent-to-own and similar products not yet envisioned.

Sub-prime, small-dollar micro-lending products are a normal market response to demand for short-term liquidity from borrowers with jobs but little access to other sources of funds. These financially challenged consumers lack access to credit cards, banks, and credit union funding. Their friends and family cannot help because it’s not only embarrassing to ask, but their peers are in similar circumstances.

Lenders must create a business model that:

  • Will survive and thrive under the current wave of competition.
  • Gain access to a sustainable cost of capital
  • Can compete with alternative loan products entering the subprime market weekly [buy-now-pay-later, early access to wages, look-alikes, collateralized loan products…]
  • Can cope with new and existing regulations.
  • Can maintain bank relationships.
  • Can integrate with consumer credit-building opportunity platforms.
  • Anticipate consumer desires and their preferred debt vehicles
  • How and where consumers want to access loans
  • How to structure loan products

The business of lending to the masses.

Demand for subprime, micro-lending loan products continues unabated. As the middle class expands and high FICO (U.S.) consumers debase and decline into lower credit tranches, the demographic for subprime loan products will continue to scale! Study after study consistently concludes that consumers need access to quick, no-hassle, small-dollar loans to meet temporary financial emergencies.

Today’s inflationary environment drives demand for small-dollar loans as well.

Defaults: Price increases this year!

gas: +49%
used cars: +35%
hotel room: +29%
airline tickets: +24%
car rentals: +23%
bacon: +18%
oranges: +18%
furniture: +17%
peanut butter: +16%
crackers: +16%
steak: +16%
suits: +15%
butter: +14%
milk: +13%
lamps: +12%
coffee: +11%
cereal: +10%

My point? Defaults will soon prove to be an issue for lenders. Lenders need tools that provide instant, real-time financial data about their borrowers and applicants. Reach out immediately if you do not have access to the following instant alerts via your loan management platform:

  • Your customer gets paid
  • Your customer receives an IRS check
  • Your customer closes their bank account
  • Your customer’s bank account is negative
  • Your customer receives a loan from a competitor
  • Your customer’s job situation declines
  • Customer payment reminders
  • Ping nearly 50,000 financial institutions, including Cash App, money transfer apps, crypto apps…
  • And much, much more…

Why does this matter? Inflation is rising dramatically. Defaults will soar. Demand for loan products is scaling. He who can qualify, approve and fund a loan fast will win BIG in this new environment. The tool is here today. To learn more:

The Internet and mobile technology continue to impact the small-dollar micro-lending industry profoundly. Consumers residing in states and provinces that do not allow payday loan products to exist routinely obtain them online. Imagine a web that isn’t focused around a computer but is everywhere, on every device, every person, accessible at every location. It’s not a place you go; it’s a layer behind everything you do.

The phone! Enough said! That’s where the action is. EVERYONE does business on their phone today!

Email is less and less likely to be opened by your customer on their desktop or laptop computers. Email “opens” in mobile devices now dominate. This is huge. Micro-lenders who are slow to adapt to this revolutionary reality will experience reductions in loan portfolio size and fail to achieve velocity.

Regulation will continue to dominate the small-dollar micro-lending landscape for the foreseeable future. In every country small-dollar micro-lending products enter the fray, they meet resistance from competitors, including banks and credit unions, so-called consumer protectionists, credit card companies, legislators, and competing Fintech platforms. Many licensing models, including choice-of-law, sovereign nation (tribe), offshore, state-by-state, and province-by-province, continue to “muddy the waters.”

On a local level, more than a few cities, townships, and counties are capping or restricting the number of payday loan financial service centers allowed. Brick-n-mortar operators must continually meet with and educate local politicians and city council members regarding their business and customers. Remind these politicians that our industry pays taxes, employs thousands of their constituents, contributes to the community, and pays leases and property taxes.

Regarding the CFPB (U.S),  we have personally met with the head of the CFPB and various Asst. Directors of the CFPB. Our takeaway is that they are focused on transparency and disclosure of all fees rather than some Machiavellian legislative initiative.

International entry into small-dollar micro-lending continues. Payday loans, installment loans, car title loans, line=of-credit loans, etc., are offered in the U.S., Canada, the U.K., Australia, Poland, Latvia, Mexico, Latin America, South Africa, and more. Interestingly, companies with international small-dollar micro-lending success are entering the U.S. despite the perceived regulatory climate.

Payment Processing may be the most dynamic area today for the small-dollar loan industry today. Crypto and the lightning network are already upending our sector. Signup for our free monthly Newsletter for breaking news about vendors offering state-of-the-art platforms that eliminate chargebacks, ACH fees, and deliver instant funding for pennies.

Bottom line: This is the time to be a lender to the masses. Opportunity is the word of the day. For those of us willing and able to envision what new loan products and delivery systems should look like, the “world is our oyster.”


62.5 Million Households Need Access to $400 Cash Fast

Approximately 50% of U.S. households [PEW] cannot access $400 cash when faced with a sudden financial emergency! That’s 62,000,000 million households! 🙄 And this trend is getting worse!!


Stuff happens. The get-to-work car breaks down. You need to fill a prescription. Your bank dishonors your check to one of your utility companies. Your check bounces! You owe the bank $37. You owe your utility company for last month. They charge a late fee, a reconnection fee, and threaten to turn off your electricity, water, gas… Maybe you’re self-employed. You’re a small contractor. You got the job but you gotta make payroll 2X before the homeowner pays you. Unable to make payroll, your crew will revolt! Yada, yada, you need cash ASAP for any number of reasons. What to do?


Again, that’s the question roughly 62,5M U.S. households – and growing – face every year!


Solutions? Beg, borrow, steal from friends, family, strangers… Your credit card – if you even have one – is maxed. You’re too embarrassed to borrow from friends and family again. Plus, they are in the same boat you are. Church? Maybe.


My readers likely can’t relate to any of the above situations. But, millions of good folks face these situations every year.


So, as an entrepreneur and an investor, how do you fit into this picture? How do you serve this 50%, help them solve their money challenges, help them keep their dignity, and earn a superior ROI on your inventory: MONEY!


That’s right. MONEY! Your inventory is CASH. Not flowers that die. Vegetables that rot. Not ice cream that’s messy and melts. Not greasy mechanic shops, a franchise you must pay up 8%/month to your Franchisor. There are zero better businesses to be in than lending money to the masses.


Here’s why. Next Post coming this week. Signup to be on the list:


How-to: Installment Loans for the Subprime Demographic

Example Nevada Installment Loans

There is a national trend by regulators to mandate a 36% APR [Annual Percentage Rate] cap throughout the USA.

Many national Lenders have been transitioning to a multitude of financial loan products in an effort to continue to serve subprime borrowers while still achieving superior ROI. Witness Avant, CURO, WRLD, ENVA… You only need to refer to their latest earnings call to comprehend the extent of this transition away from single-payment products. Enova’s progeny is back in the late ’90s. At the time, they offered singularly payday loans having 400% – 700% APR payday loans. As per their latest Q4 earnings call, these single payment [payday loan] products made up a mere 2% of loan originations. Obviously, they see the writing on the wall.


Nevada, in addition to approximately 25 other States, has Implemented a state database. This demonstrates a death knell for the single payment product!

Luckily, we Lenders have time to evolve our Loan product offerings AND, more importantly, integrate with Fintech platforms that enable us to reduce headcount, and employ artificial intelligence [AI] to acquire, underwrite, service & collect funds without the aid of human intervention; thus reducing our G & A expenses. [Examples: for 24/7/365 debt negotiation & for wages & income verification.]


Grab a copy of our latest version of “How to Lend Money to the Masses Profitably.” 500+ pages of real-world, how-to start, scale, improve and succeed lending cash to the 50%+ of USA households who are FAST running out of money and cannot access $500 cash in order to solve a sudden financial emergency. [Fix their car, keep the lights on, pay for a prescription, make payroll for their construction crew until paid by the homeowner…] For a mere $297.00, you can download our 500+ page PDF and enter/improve/scale a consumer loan business! The business of lending to the Masses. The oldest profession 🙂

How to Start a Payday Loan Business


Fintech Loan Executive Available

Experienced Online/Fintech B2C Leader Available. 

I enable my partner clients to create high-performing, user-friendly lending systems and platforms with a focus on digital lending and multi-channel delivery via both State & Tribal lending models.

I have nearly 10 years of successful experience building tribal & state-licensed online lending models as CEO, COO:

  • Launched & managed multiple multimillion-dollar [USD] online B2C small-dollar, subprime short-term installment loan portfolios.
  • Highly competent in managing Tribal Council relationships & building infrastructure.
  • Skilled at capital raises.
  • Highly proficient at enhancing portfolio ROI’s via AI [Artificial IntelligenceI] machine learning, and transitioning storefront lenders to online lending.
  • Omnichannel marketing/customer onboarding/retention.
  • Data analysis & Modeling (KPI). Segment ROI. Risk vs Profitability.
  • Risk management & regulatory compliance for all federal, tribal & applicable state laws.
  • Call center operations.
  • Payment processing
  • Banking & law firm relationships for subprime lenders.
  • 3rd party vendor vetting & negotiations…  
  • I will consider both full-time, remote & on-site collaborations. Open to relocation.

Let’s jump on an introductory call and explore! 


→ Limited time inflation relief pricing: Save $147.00

Limited Time Inflation Relief Pricing $147 Off ends in