Author: Suzzy

While setting up a lending business, one of the challenges you will have to tackle is that of finding suitable premises for the enterprise. This is not the sort of business you can run from your garage or from your basement. You need to have a certain level of credibility, and this you can only get if you invest in proper office space. There are three key ways in which you can go about finding suitable premises for the lending business: Through the local realtors: in this regard, you can visit the local realtor’s offices, and contract the realtor to find suitable premises for you. The realtor will charge you something for this service. But it won’t be much. Furthermore, engaging a realtor for this sort of task saves you…

One of the ways in which you can enhance efficiency in a lending business is by automating operations. In today’s article, we will be looking at the steps you need to follow, if you wish to automate your lending business’ operations. And that is where, without any further ado, we come to learn that if you want to automate a lending business, you need to: Identify the business processes that can be automated: you need to focus on simple repetitive processes that don’t require much intelligent human input. Identify the specific ways in which the processes can be automated: so this is a question of looking at each single process, and trying to think about it critically in order to figure out how, for instance, it can be reduced into a…

The success of a lending business depends to a great extent on its reputation. This means that having established a lending business, you need to do everything to protect its reputation. The moment you start losing your reputation/developing a bad reputation is the day your lending business will start to fail. Yet it is not always easy to maintain a good reputation while running a lending business. Sometimes, people will borrow money and then refuse to repay – sometimes leading to a situation where you have to use strong-arm techniques to get your money back. And you also have to be aware of the fact that this is a business where competitors often seek to tarnish each other’s reputations, as they seek to gain a upper hand. Yet in spite…

Every lending business needs to have some debt collection capability. This is because some of the people who borrow money will inevitably fail to repay on time. In fact, some of the people who borrow money will simply vanish, with no hope of them ever repaying their loans willingly. They therefore have to be compelled to repay. And that is where the need for debt collection capabilities comes in. There are two ways in which a lending business can deal with the debt collection challenge: The first option is where the lending business can create an in-house debt collection department. So this is where you hire folks who know how to go about the debt collection work. You can then pay them a salary or you can pay them on…

One of the ways in which you can prosper in the lending business is by advancing loans to small scale traders. This, in more sophisticated terms, is all about lending to the small and micro enterprises (SMEs). It is true that the small scale traders are likely to have limited capacity to absorb loans individually. But collectively, they can end up borrowing much more than what you’d have lent to a few large scale businesses. And as you are likely to discover (once you start working with them), the small scale traders tend to take loan repayments very seriously. They are unlike the large scale traders, who have a detached attitude towards loan repayments: knowing that they can always seek bankruptcy protection the moment they have difficulties repaying their loans.…

One of the ways in which you can improve your lending business’ earnings is by starting to lend people who have poor credit ratings. They are a huge, untapped market. True, lending people who have poor credit scores is risky. But it can also be very profitable. This is because such people, who have low credit scores, tend to have very few places they can borrow from. Because they lack options, they are often willing to bear very high interest rates. And such high interest rates potentially translate into higher profits for the people who take the risk of lending to folks with poor credit ratings. It is important to understand that a poor credit score doesn’t always translate into lack of creditworthiness. Some of the people with poor credit…

As your lending business grows, it will soon get to a point where you have to hire professional managers, to help you run it. Take, for instance, a case where your lending business expands geographically, with the opening of new branches. That would necessitate the hiring of branch managers, to help you run the new outlets. We may also be looking at a case where you have to hire line managers for your lending business. Like, for instance, if the number of staff grows beyond a certain number, you have to hire a HR manager. Or if the financial resources grow to a certain point, and you find yourself having to hire a finance manager (or financial controller). Now the success of your lending business will be greatly influenced by…

If a lending business is to grow and thrive, it needs to be marketed. It is through the marketing effort that you would be able to get new customers (potential borrowers) to know about the lending business. Further, it is through the marketing effort that you would be able to retain old customers in the lending business. So one of the ultimate objectives here would be that of getting new people to take up the loans offered by the lending business. The other ultimate objective would be that of getting the people who have been taking the loans offered by the lending business to continue doing so. Some of the ways in which you can market a lending business include: Through mass media adverts: so this is where, on behalf…

Before starting a lending business, you will need to obtain a license. You can’t establish a lending business without a license. Even if you manage to get a lending business going without a license, you would not have peace of mind. For running a lending business without a license would mean always being on the wrong side of the law. Furthermore, running a lending business without a license would mean that you would be confined to ‘underground’ operations. That would in turn limit your operations. It is therefore very important to make an effort, and get a license for your lending business. To get a license for this sort of business, you will need to: Identify the relevant licensing agencies: there are certain nations where operators of lending businesses are…

One of the ways in which you can succeed in the lending business is through the use of the commission model. In today’s article, we will be trying to understand how the commission model works, within the lending business model. We will also be highlighting the steps that you need to follow, if you wish to run a commission-based lending business. How the commission model works, within the lending business To succeed in the lending business, one needs to have two basic things. Firstly, one needs to have money to lend. And secondly, one needs to have borrowers, who would borrow the money, and then repay it with interest. The interest is the profit. Now getting the money to lend isn’t too hard, as long as one is connected to…