Forums: Discussions for entrepreneurs and small business.

Hi guys, I'm new to this forum, but hopefully I can join your ranks as a small business person in your community :-)

I would like to start a Payday Loan business in California - I have the capital required, but I don't have a great knowledge of the day-to-day operations of one of these establishments. I have a decent knowledge of the business model and I have calculated returns, costs, risks, etc., but I don't really know where to start. Does anyone here have experience with Payday loans, check cashing, title loans, etc.? I have visited a few brick and mortar stores, and they have other services available such as bill pay, pre-paid debit cards, etc., does anyone have experience with these as well?

Basically, I need advice regarding:

- Where to start

- Day to day operations: how much money should I keep on hand? am I screwed if I'm not fluent in spanish (I speak a little, not much though)? should I hire an employee to help me out, or just start by my self? What documents do you usually collect from your clients before giving them loans?

- Software: What company has the best software for this type of business? Can you automate collections, like if someone doesn't pay can you automatically deduct the amount from their bank account? How much of this business can be automated and at what cost?

- California Certification: I have looked up most of what is required in California for becoming certified for this business, but is there anything I should know before starting this process?

Thanks for your help everyone, I hope I didn't go on for too long, but I appreciate any advice you can give me!

Given your questions, wouldn't your likelihood of success increase if you pursue something that you are a bit more familiar with?

Barring that, you should go work for a payday lender for 6 months or so to get a better understanding of the business. Even McDonald’s requires prospective franchisees to work at a store before buying,

Many people start businesses that they have little or no experience in - that should not stop you.  But, you should quickly learn all you can about the industry - and as pointed out above - get a job with one and learn.

Just because you have no experience now - does not mean it is impossible - you just have to work a little harder in the beginning.

to: cw31088

Some of the common challenges are regulatory filings, licensing and franchise related taxes.  The banks do not like short term loan companies and they are doing their best to promote legislation against.  You should consider an online business instead of storefront.  Easier to manage, cover most of the nation instead of just one small geographic area, and it's the fastest growing business sector in the financial industry. 

If you would like information on how join our national "private membership association" and be exempt from all regulatory filings thus get up and running on the web very fast, let me know and I'll get you some info.

Best of luck, good business choice.

Those types of businesses are at a great deal of risk in terms of civil liability. There are many free legal service organizations dedicated to punishing "payday lenders" who step just one inch over the regulatory line.

You must ensure that you follow all appropriate credit, interest and debt collection procedures carefully.

Organize as a business entity with liability protection

Be careful to follow all organizational formalities, keep the business affairs separate from personal and maintain careful records. Failure to do so may eliminate any liability protection your business entity may provide.

Also, have good liability insurance and a lawyer on hand to consult regarding any questions that may arise. 

If you would like to discuss your matter further over a free and confidential phone consult, please contact me at your convenience.

Regards,

Michael J. Duffy

Duffy Law, LLC

1-888-414-5773

www.mduffylaw.com

mduffy@mduffylaw.com

Please note: The information provided here is for general informational purposes only and should not be construed as legal advice or legal opinion on specific facts or circumstances. You should consult an experienced attorney concerning your particular factual situation and any specific legal questions you may have. 

These payday loans blogs have helped us in a great manner and there is no doubt that one can get large number of advantages by reading them.

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