If you have decided to start a money lending business, you should decide the kinds of loans you will provide. The kinds of loans include payday, mortgage, installment loans, etc. You also have the choice of starting a lending business by using your own money or pooling in money from a group of investors. To start a money lending business, you will need to develop a business plan and receive all the necessary government licenses.
Preparation
Choosing the name of the company
You will have a sturdy mind to choose the best name for your company. So choose a company name and choose a corporate address. Having a fax number and a phone number in the name of your company is also very essential. To do this, you have to search the state’s business filing office and find out whether the name is already taken by some other one.
Draft the business plan
Under this, you will be thinking about the current growth as well as the future growth opportunities of the business. Having a big picture of the business plan will help you to correctly strive towards your goals. A typical business plan will include the Executive summary, Company Description, Market Analysis, Product Line, Market, and Sales.
Executive summary
This includes the description of the nature of the business and the reason why it would be successful. It should contain the mission statement as well as the company information. When your business is a start-up, you have to explain how your experience as a money lender and the background can contribute to the success of the business.
Company Description
Company description will have the information about the nature of the business, intended market and the market need that your business is going to satisfy.
Market Analysis
As a money lender, you should explain the size and distinguishing characteristics of your target market.
Product Line
You should explain the kind of loan you are going to provide and the advantages of the loans.
Marketing and sales
Under this, you have to mention the overall sales strategy and include your plans for growth.
Financial Projections
With the market analysis as the base, you have to forecast your projected finances for the upcoming 5 years.
Settle on financing
One of the most important components of the business plan is funding. It is also a very important legal mandate. Take a good time explaining how you will be funding the loans that you are going to extend to the borrowers.
Draft underwriting criteria
As a money lender, you cannot lend money to anyone who walks in. An applicant has to be evaluated according to the predetermined criteria. This aspect is called underwriting and you have to draft these underwriting criteria before you start giving the loans. The process will also include the risk assessment by gathering information about the loan applicant’s financial history.
Attend seminars
You can have a thorough discussion and advice from those people who are already successful in this business like the Lender SG Site. There are seminars and national conferences that are conducted by every kind of industry. You have to attend these without fail so that you can build a network and get invaluable advice from the experts.
Meet a lawyer
When you are getting into the business of money lending, you will have to hire a lawyer. They can answer any of your legal questions and clear all your legal doubts. You can finish the incorporation process easily and fill out the essential paper as well.
You can find out an experienced lawyer by visiting the state’s bar association which should be running a referral program.You can look for an attorney as well by looking at their website directly. Prefer an attorney, as he/she will have the experience in real estate, banking and lending as well.
Purchasing the domain name
After analyzing the scope of your market, you can decide the correct degree of marketing that is required. But, a website is very important for any business, irrespective of the business size. There are many registrars from whom you can purchase your domain name.
Registering your business
Incorporation
The very first step in the process of registering the business is to complete the incorporation. There are many corporate forms like corporations, sole proprietorships, etc. You have to spend time with your attorney and decide which kind of form would suit the money lending business. The process will require you to file the article of incorporation with your state. You can get them from the Secretary of the State.
Apply for licenses
The state has to permit you to legally start a money lending business like Lender SG Site. They would permit by availing you a license for money lending. The attorney can get you the form or you can even download it from the respective website.
Launch the business
Under this, you will have to take an office space for rent, open a bank account, create contacts and finally advertise.