The majority of us are unaware of the multitude of ways an entrepreneur can make money with payday (PDL) and small dollar loans. Often, we’re so focused on our own passion, skill and knowledge base that we fail to comprehend other methods of monetizing our expertise and understanding of this dynamic industry. This brief discussion will cover a few of the ways we can develop multiple revenue streams all utilizing the payday/small dollar loan products. If you and your team are uncomfortable or unwilling to actually fund loans, be advised there are a multitude of ways to make a “ton of money” in the small dollar loan industry. (Note, this list is in no particular order.)
* Funding Loans. Of course this is the obvious method most of us employ to maximize our returns. We form a corporation, get a license where appropriate, we open our store, utilize advertising and signage to draw customers and fund the payday loans ourselves. This “brick-n-mortar” model still works very well. And fortunes are still being made with this approach.
* Utilizing the Internet. Consumers in the USA, Canada, Australia, New Zealand, the Caribbean, England, Ireland, and more demand access to our payday loan product. However, not all consumers have the ability to simply walk into their neighborhood cash advance store and receive one. We are all aware of states having unfavorable payday loan legislation. Millions of payday advance consumers are forced to use call centers and web sites of companies outside the protection their state may offer or the “best-practices” promoted by CFSA.net and FISCA.org. And, let us not forget the value in combining a “brick-n-mortar” payday loan operation with web sites. The “big guys” in our industry have figured this out and purchased existing payday loan Internet companies. We perceive the major value in their taking this approach was the fact these payday loan Internet companies had pursued and secured multiple state licenses. In any event, it only makes sense to use a web site in conjunction with your “brick-n-mortar(s). Fund the loan applications submitted via your web site by residents of your state/province and simply sell those from locales you prefer not to do business in. (See Affiliates)
* Loan Leads. There are millions of dollars being made collecting and brokering small dollar loan leads and applications. (See Affiliates)
* Consulting. There is a tremendous demand by entrepreneurs to get involved in the PDL industry. Their thirst for knowledge regarding software, licensing and legislation, store location, web site development, ACH processing, stored-value and prepaid card deployment, compliance, and on and on has no end.
* Affiliates. There has never been more money being made in the PDL industry by entrepreneurial companies and individuals that never fund a single cash advance! Ten’s of thousands of dollars are made monthly by simple creating a web site to gather PDL leads and applications and selling them to PDL companies willing to actually fund the loans. Today, these leads and applications sell from $3.00 ea to as much as $100 each depending on volume, filtering, quality, source, and any due-diligence performed prior to the sale. Just one example is that of a payday loan lead generation entity selling 50,000 payday advance applications per month at an average of $9.00 each. And the buyer claims to be funding 40% of these leads! We estimate less than 10% of the payday loan web sites on the Internet today actually fund payday advances! It is extremely easy for an entrepreneur to simply build a web site(s), become an affiliate at http://www.cj.com to immediately begin selling payday loan leads to advertisers. Additionally, one can set up a Google AdSense account and earn approximately 30% to 50% of the income Google receives for each click (currently $7.02 per click for position #1). Last month 294,000 searches were performed at Google for the term “payday loan.” Of course, this count does not include all the other permutations for “payday loan” such as “payday advance”, “cash advance” “payday loan cash advance”, “no teletrack payday loan”, and many, many more. Nor does this include searches performed at other search engines such as Yahoo, AOL, Earthlink, MSN, etc. Our research yielded more than 1,000,000 searches last month for the term “payday loan”!
* Vendors. There is no limit to the various products and services one can offer to PDL operators and consumers of cash advances. Creativity is the key to developing continuing revenue in our industry. PDL operators need creative solutions for meeting compliance issues, creating complementary products, advertising and marketing, collections, solidifying relationships with PDL consumers, customer identification, customer employment validation, bank account and ACH verifications, security, insurance, store layout, web site and software integration.
* Investors. Astute individuals and organizations with a desire to put money to work at favorable interest rates do exist. We receive inquiries from them daily. Those deals involving no equity typically earn returns of 2% to 5% interest paid monthly. The key for both the PDL operator in need of funds to meet demand and potential investors is to research and understand the PDL product thoroughly, develop specific criteria for the investment or use of the funds, and a complete assessment of the ability of both parties to work together. Finally, all agreements must be put in writing.
* Education. Opportunities for helping payday loan operators to increase revenues and meet compliance and legislative issues abound. Again, topics covering marketing, advertising, collections, compliance, accounting, insurance, fraud, investing, debt servicing, complementary products and services, customer relations, legislation ( http://www.PaydayLoanLegislation.com ) are just a few of the subjects payday advance operators are in need of.
* Franchising. Entrepreneurs are clamoring for information regarding how to get started in the PDL industry. Independents desire a strong brand and well-organized operations offering terrific and timely support. Turnkey payday advance models will yield the greatest monetary success.
* Trade Organizations & Magazines. It is shocking to realize how many existing and prospective PDL operators, vendors and suppliers are unaware we have trade organizations and magazines. Visit and support Fisca and CFSA. And, do not forget our trade magazine, Cheklist(sic). Cheklist Magazine maintains a list of state payday loan and check cashing associations.
The bottom line is this: entrepreneurs, training organizations, vendors, suppliers, educators, consultants, and more all have an opportunity to earn substantial income and recurring revenue streams by participating in the PDL industry. Success will come with proper research, a good plan put into action, follow up and adjustments in combination with integrity and honesty.