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 of all these caveats, you still need to do your best in protecting your lending business’ reputation.
Some of the specific ways in which you can protect your lending business’ reputation include:
- By seeing to it that you only lend people money that they can afford to repay comfortably
- By giving all ‘friendly’ debt collection methods a try, before turning to adversarial methods
- By providing good customer care to the people you lend
- By seeing to it that you don’t charge usurious interest rates
- By ensuring that you conduct the entire lending business within the confines of law
In practical terms, you need to establish good systems and procedures, through which you would be carrying out the lending business. Then you need to get your employees to understand these systems and procedures thoroughly, and ensure that they abide by them consistently. If you let your employees to do things in a haphazard manner, they will almost inevitably make some poor decisions. Those are the decisions that would in turn cause your lending business’ reputation to deteriorate.