Everyone wants to have a business. Starting a business is easy but maintaining it is a bit difficult. Today’s article is about how to grow a money lending business.
We will get insights on how to boost that business you have started or thinking about starting. But let’s get a few facts first.
What is a money lending business?
It is a simple transaction that involves two or more parties where one is the creditor and the other is the debtor. The creditor gives money and other resources to the borrower for a period agreed on and expects it back with something extra- interest.
The extra money can also be from fines due to late payments.
Is the money lending business legal?
Yes, it is regulated by certain laws. Also, before conducting the business you ought to have registered it and got the permits and licenses.
It is a business like many other businesses, besides before going live the terms and conditions must no surpass the country’s laws.
Is the business profitable?
Yes, if banks can lend you can too. It has become lucrative for being able to provide loans and money assets faster than banking and other financial institutions.
But also it comes with risks. One ought to be careful when starting and running this business. There many malicious people and organizations that can bring the business down fast.
Who is eligible to have the business?
Everyone over the age of 18 years, and documented if they don’t reside in that country. They too should have a reputable name.
They too should have a credit good score and have a good source of income to start and run the business. Should also be law-abiding citizens.
How to start a money lending business?
It’s effortless; you need to have the following:
- A plan
- Source of income
- Read more on this here.
Here is how to grow a money lending business:
#1. Staying local
Invest in what you know and where you know; it is a good place since you know how the economy and market trends.
Also, you know your clients and the type of business and resources they need. Besides, this builds your reputation and trust.
#2. Focus
Specialize in what you offer and the operations: the loan types, interest rates don’t just say you offer all loan types and that it’s nationwide.
This is vital because once you start the business you need to keep it running and profitable. One can focus on the following:
- Marketing- this is selling your business to attract more clients. One needs to have a structured plan to use to reach out. Often the word of mouth is the best, always treat your clients the best way you can.
- Networking- this is the best way to get ideas on where to improve your business and more information to keep the business running. Getting people together and sharing helps one gather reputable information to boost the business.
#3. Transparency
Clients prefer one who is always honest. One who is always open about what they can and can not offer to the clients.
- Refer don’t broker- well if a certain product or service isn’t available in your business refer clients to a trusted source. Don’t send them to brokers who will create a chain that might take long and also not end up with the right details.
#4. Coaching and Mentoring
This approach is essential for it opens your mind up. Reading books and having a mentor to guide you through them will help you stay focused.
Besides reading you can also watch entrepreneurial talks. There are so many resources that are available on the internet.
#5. Keep your books in order
Keep all transaction records in order. Make it easy to file taxes and also check-up on clients’ transactions.
Keeping them in order makes the business look professional. It also helps one calculate how the business is running on finances.
#6. Find your niche
Run through the books and check where the loans are falling. If the clients’ loan falls between $15,000- $50,000 it’s the best marketing niche.
‘This also helps one plan the funds and how to disburse them.
#7. Speed
Providing the best services in a short time is the best structure to use. Besides everyone wants to do their transactions fast and easily
.Always find ways to save the client some time and automate their transactions for this will gain the business trust and respect.
#8. Stay Informed
Know the different market trends. Keep tabs on how different trends are changing. Also, strive to know more about your opponents.
Don’t let any important information pass you. Keep in touch with clients and always ask for feedback.
- Keep your clients informed too- Always update them on changes and trends through social media and the website too.
#9. Grow your savings
Savings come in handy. They also help you when you run into money issues with the business. Cultivate a culture of saving by doing the following:
- Invest in stock- stocks are best for they are intangible and their prices appreciate with time.
- Set a goal- once you have a goal you already know what to work on. One will work hard to reach it.
#10. Good Support and Customer Service
Customers are responsible for keeping the business running. Maintaining a good working environment with them makes it easy for the business to grow and expand fast.
As we all know that word of mouth is the best way to create awareness. Good reviews give the business more clients.
Well, now you got insights into how to grow a money lending business. Here is a system to help you reduce the workload. Here is Jisort, accounting software for financial institutions.
Jisort is web-based software for Banks, SACCOs, Credit Union and other financial institutions used to manage their clients’ information, keep track of their transactions, and generate reports and business statements.
Jisort has been operating for over 6 years, both locally and internationally. It has specialized in the development of core banking systems and applications by applying the latest technology.
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Learn more about Jisort here.