How to set up a loan house
The dizzying pace of consumerism in which we live leads us to want more and more things. We even come to feel that we need them and that our happiness lies in having them. However, the story does not end there, but the urgency is also a protagonist and we want everything and everything now. Since, unless you are very rich, that is simply impossible, we are increasingly going to a Loan House, to get a little closer to our dream of happiness.
In this article, we will be going over all the points we need to take into account to open a Loan House and teach you how to fulfill your dream of a profitable business by making others fulfill theirs as well .
Why a Loan House?
You are probably wondering why you should open a Loan House, since banks offer the same service. What happens is that the latter request some requirements that, for some clients, is impossible to fulfill, since they demand very committed guarantees or, what is very ironic, they require that the client demonstrates that he has goods or savings of the value of the loan that requests or still superior. As if this were not enough, they do not make small loans.
For these reasons, a new concept in lending has emerged in the market: the Loan House. This business provides money solutions at a more popular level and can be very profitable if well managed.
Requirements to open a Loan House
The Loan House is governed by the laws of each country that regulate the movement of money, especially those with interest, since obviously you will charge them because in them lies the profitability of your business, you can not stipulate them arbitrarily, but you will have to take advice from a lawyer to guide you in this part of your business.
This professional will also be in charge of warning you about the guarantees that you will have to ask the client for, because although it is a more flexible option than a bank, you can never be left without a guarantee in case the client does not pay.
How to start this business?
Investment
-You’ll need to put together some start-up capital with which to start making loans. You will also need the investment capital for the premises, advertising and staff, together with what you will have to pay for the opening of the company before the regulatory body.
Remember to take into account the requirements and conditions that your Loan House must have, according to the regulations of the bodies in charge, since in addition to allowing you to operate, they will also mean an amount on your investment.
Market study
-It is also necessary to analyze the competition and the state of this business in the market to give you an idea of its current profitability.
-Market research also involves investigations related to interest rates that are occurring in the market, payment facilities and strategies.
-Last but not least, analyze the areas where your potential customers are most concentrated, this way you will have signals to promote your business.
Legal aspects to be dealt with
Once this is done, it is extremely necessary to register your company at the state level, complying with all the pertinent procedures and requirements so that your business functions in accordance with the law.
What you will offer
It is very obvious that a Loan House offers people money to borrow, but there are many ways to do this. For example, you can think of strategies that will make your Loan House stand out from the crowd of companies that offer the same thing. How? Very simply, for example by offering a loan that, if the client pays all the fees on time, the last one is free. Another example could be to offer the loan and have the client start paying after two months. There are many other strategies, but you have to think about covering your profit, that is to say, if the last payment is free, you will have already received your profit by then from the interest fixed in the payment installments.
Advantages of having a Loan House
The first advantage of working with this type of business is the access to money, because the money that is needed to satisfy the day to day needs is always coming in, besides the loan model always brings a percentage of interest so you will always be earning money in this type of business.
In addition, it is a business that can be started from a home office, with small percentages and expanding progressively, this makes the loan business more viable for investors who do not have enough capital. It is a relatively comfortable and simple business to run, depending on the
customer volume and the business management system imposed by the guideline.
Success stories
A success story that can be seen is the loan company ASNEF, located in Spain, a company attached to the bank CIRBE of Spain and more commercial entities, being a friendly platform where to ask for loans under flexible clauses and without much documentation, facilitating the speed of the loan to users of the platform.
Another successful company is the fast loan, offering loans in a simple way without guarantees, under friendly conditions of payment, being a successful loan house in Spain, located in Madrid, which are presented as strong competitors in the world of loans, and are usually great allies for users who have solvency problems at the time of collection of their invoices or commercial obligations, giving a financial relief at the time.
Problems that may arise: As an owner of this type of business, you will find different people who need one of the loans you offer, likewise, some of them can be hung in the installments or maybe you will do very well with all your customers, however, it is best to have the business insured and allow you to get your money without your customers can take it. Non-payment of fees or delay, could put your business investment capital at risk.
Final recommendation: The security of the business is an aspect that we should definitely consider. Make sure that your business is very well located and makes it easy for your customers to borrow money of different values, it will be a good way to offer the amount closer to what they need. Remember that you are the first choice of people before going to a bank, given the facilities you provide for the loan, so it will be necessary to take advantage of this value and promote our business as we build them with much patience and commitment.