10 Marketing Steps — How to Start New Payday Loan Business
Payday loan businesses provide short-term loans to customers short on cash between paychecks or if they need quick loan to fix a pressing need. Each paycheck is used as a security on each loan.
by Vit Arnautov, TurnKey Lender
There have been a few advancements in the Payday loan businesses over the years such as the social media factor and different Payday Loan Software’s being introduced, which have made loan management a whole lot easier and also, very secure. Setting up a brand-new business can seem daunting if you are new to the payday loan marketing world. There are a number of feasible options that can allow you to get started with your own business.
Step 1: Think about your business structure
Firstly, think about your business structure before beginning. In the payday loan business, it actually takes money to make money. You need to make a business plan beforehand to think through all the details. If you are a beginner in loan business, there is good solution: you don’t need to have a full payday loan business online in order to make money today. There are many payday loan companies that have certain affiliated programs in place where they’ll pay you some fixed amount to guide customers to them. This will help you give a payday without having to worry about the capital requirements. That’s much easier to organize the process, however, it’s unlikely that you will be able to earn a lot on this.
Step 2: Have a Secure Commercial location
It is necessary to set up a secure and easily accessible outlet from where to operate. Your commercial location is going to help protect your business interests and your employees. Look in finding a location for your business near transport areas so those without their own vehicles or those who are considering a payday loan to get their new car out of the shop can easily avail your services. If you don’t have running costs such as a building or a lot of overheads to launch your business, you can literally set up your payday affiliate business from the comfort of your own home.
Step 3: A Business plan
Write a strong business plan. Contact an accountant or use a business plan template to guide you. Following things need to be accounted for while writing your business plan to achieve the goals you require:
• Detailed Market plan. You should know demographic, geographic and psychological factors of your target audience. If you have limited budget, do the research on your own — before you begin wasting resources on advertising, you’ll want to analyze your market and your target audience.
• Company’s detail description. Explain the purpose of the business, your target market, and the market needs your lending business will satisfy. Emphasizes your store’s commitment to privacy and ensure safety.
• Obtain customer data. Find out what customers would think about your products and services by conducting online surveys or focus group sessions — whatever works best for you. How do you find consumers to obtain data from? Simply placing an ad online, on local listings, and offer small compensation and you’ll get plenty of willing subjects. Just make sure that they belong to the demographic you are targeting.
Step 4: Form a corporation
Most states in America require payday loan businesses to be legal corporate. It is also a good decision to form an LLC (limited liability company) for protection of your personal and business interests. Furthermore: purchase a surety bond, in order to protect your business from getting sued. Not to get in troubles, it’s better to hire a lawyer for a consultation. You’ll pay only once and be in safe the rest of the time.
• Examine your net worth. Your company may be needed to meet the requirements to lend money to customers. Organize all of your assets, such as lists of real estate and office equipment, stocks, bank account balances and annuities if you have them. Attach this information to your license application.
Step 5: Hire a full-time lawyer
Every loan that you agree to hand out is a contract if there are any loopholes in your contract language, a customer could use them to get out of paying you back. A lawyer will be a great asset. The attorney will research and answer any questions you have. He or she will also help you out with all the legal stuff as there are always some hidden clauses or rules behind running a payday loan business. In any case always obey state lending law.
Step 6: Launching Your Own Payday Affiliate Site
You could build your very own payday brand and have your own website. People search for payday loan information every second of every day, so if you can provide relevant information that they are looking for then you will gain traffic to your site. Getting a new website up and running is a fairly simple process but you will need to take the necessary steps:
I. Register a domain name (employ a design agency or if you are on a budget, you could design it yourself)
II. Create a blog and use this to post articles on the site
III. Search Engine Optimization method (you can utilize other marketing channels for affiliate marketing)
IV. Get the traffic (people will apply for loans via your website instead of through other competing websites online)
Step 7: Market Yourself
Firstly, customers seek out payday loans to meet their short-term financial needs. Marketing materials should emphasize that a loan from your store can fix these short-term problems. Secondly, ensure all store signage and marketing language emphasizes your store’s commitment to privacy. Then, offer a discount (of your choice) for every new customer referred to your payday advance store. Lastly, they want the payday loan application process to be fast and simple so offer the ability to submit applications or supplemental documents online.
Step 8: Pay Day Loan Software
There are various pay day software’s now in use which make loan management a whole lot easier and also, they are very secure so using them gives the owner a pretty big advantage. It’ll help you to originate and manage payday loans hand to hand. Create loan approval workflows, accept cash payments, generate cash statements, management everything, and collect on defaulted loans. Payments can be accepted easily online in several minutes. It’s always better to use proven leaders in the market like Turnkey Lender. It is an intelligent cloud system capable of making a correct evaluation of a borrower, and finance decision making. It also includes payday loans management. Their newly proposed rulings could lessen interest rates and extend the term to repay.
Step 9: Advertise your business
It will be worthwhile to advertise regularly. It is essential you set aside some money every month towards advertising costs and try to get in contact with local people who have a decent amount of social following. Posters, fliers and other printed materials are the most costeffective ways to advertise your payday advance loans. Design and print these advertisements and distribute them in locations your frequent customers are from.
Step 10: Communicate with customers, know about them
Your customers must exactly know what they are agreeing to take on in the payday loan business and you must also know who’re you lending money to. There must be no confusion in the minds of customers. This will help limit liabilities in the future. Good communication means good business. They will reach out to you more and consult you in case of a problem. Most customers are needy and they seek help by borrowing, so good communication will ensure them safety.