THE BLOG

22
Feb

California Car Title Loan Laws

Posted by / Uncategorized
Car Title Loan Business Profits: How to start a car title loan company

Key Regulations for Subprime Lenders in California (Post-AB 2953 Enactment)

Car Title Loans (Regulated under the California Financing Law – CFL)

Car title loans are nonpurchase money loans with a bona fide principal amount of $2,500 or greater, where the lender obtains a security interest in a motor vehicle.

The following regulations now apply, incorporating the changes from AB 2953:

Interest Rate Cap

  • Current Regulation (Post-AB 2953):
  • CFL licensees are prohibited from charging more than 3% per month (equivalent to 36% APR) on the unpaid principal balance of title loans of $2,500 or greater.
  • This cap applies uniformly to all title loans, including those above $10,000.

Administrative Fee Cap

  • For loans above $2,500, administrative fees are capped at $75 (Section 22305).

Loan Term Restrictions

  • For loans under $5,000, the maximum loan term is 60 months plus 15 days (Section 22334).

Payment Structure

  • For loans under $10,000, payments must be structured in equal, periodic installments (Section 22307).

Collateral Restrictions

  • Secured by a motor vehicle (personal property); prohibition on requiring real property as collateral for loans under $5,000 (Section 22330).

Delinquency Fees

  • For loans under $5,000, delinquency fees are capped at:
    • $10 for loans 10 or more days delinquent.
    • $15 for loans 15 or more days delinquent (Section 22320.5).

    Additional Restrictions

    • For Loans Under $5,000:
    • Prohibition on compound interest or charges (Section 22309).
    • Requirement to prominently display a schedule of charges to borrowers (Section 22325).
    • Prohibition on splitting loans with other CFL licensees (Section 22327).
  • For Loans Under $10,000:
  • Limits on conducting other business activities at the loan premises (Section 22154).
  • Standards for selling insurance to borrowers (Sections 22313 and 22314).
  • For Loans of $10,000 or Above:
      • While general CFL restrictions are minimal, the 36% APR cap now applies to title loans in this range due to AB 2953.

    Pilot Program for Small Dollar Loans (CFL Sections 22365 et seq.)

    • Applies to loans between $300 and $2,500 (less relevant for typical title loans above $2,500).
    • Interest rates are capped at approximately 36%:
    • Specifically, the lesser of 36% or 32.75% plus the prime rate for up to $1,000.
    • 35% or 28.75% plus the prime rate for amounts above $1,000.
    • Includes underwriting requirements (e.g., borrower’s debt service must not exceed 50% of gross monthly income).

Context and Implications of AB 2953 Enactment


Uniform APR Cap for Title Loans

  • The 36% APR cap now applies to all title loans of $2,500 or greater, aligning California with 25 other states and the District of Columbia that have similar caps or prohibitions on title lending.
  • This cap incentivizes lenders to conduct ability-to-repay underwriting to reduce defaults and repossessions, as high default rates are unsustainable under the capped rates.

Impact on Business Practices

  • Lenders must adjust their underwriting standards to ensure borrowers can repay loans without relying on high APRs to offset default risks.
    • The cap will reduce the availability of title loans for higher-risk borrowers, potentially shifting demand to other credit products or unregulated lenders.
    This overview reflects the current regulatory environment for subprime lenders in California following the enactment of AB 2953.

    It highlights the new 36% APR cap for car title loans while maintaining the existing payday loan regulations under the DDTL.

Questions? Need help? Introductions? 

Reach out to Jer at : Jer@theBusinessOfLending.com

4-WAYS I CAN HELP YOU!

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04
Feb

Breaking Free: A New Dawn for Consumer Lending 

Posted by / Uncategorized

HOW TO LOAN MONEY TO THE MASSES without getting your butt handed to you

Title Loan Franchise

The Winds of Change 🌪️

Hold onto your lending portfolios because a regulatory tornado just swept through Washington! Scott Bessent has taken the helm at the CFPB, and folks, this isn’t just another bureaucratic shuffle – it’s the financial equivalent of a prison break for our industry!

Picture this: The ink on Bessent’s appointment papers was barely dry when he fired off an email that sent shockwaves through the regulatory landscape. Like a master conductor stopping an orchestra mid-performance, Bessent directed CFPB staff to halt ALL rulemaking activities. Those pending regulations that had compliance officers stockpiling antacids? Suspended! The enforcement actions that were hanging over the industry like storm clouds? Frozen in their tracks! Even the CFPB’s research papers and public communications – poof! – all placed on immediate pause.

This isn’t just a change of guard; it’s a complete reset of the regulatory chess board. In one bold move, our new Acting Director has pressed the pause button on the entire regulatory machine.

Those handcuffs that have been limiting your lending innovation? Consider them unlocked. That regulatory sword of Damocles hanging over your business plans? It just got a whole lot lighter!

What This Means for Your Business 📈

Let’s break down this golden opportunity:

  1. Freedom to Innovate: Remember all those creative lending solutions you had to shelve because of regulatory red tape? It’s time to dust them off! The new CFPB leadership is signaling a clear shift toward market-driven solutions.
  2. Expanded Market Access: With 54 million “credit invisible” consumers out there (yes, that’s a real CFPB stat!), we’re looking at an ocean of opportunity. These aren’t just numbers – they’re real people who need our services.
  3. Streamlined Operations: Say goodbye to those redundant compliance procedures that were eating into your profits. The new direction suggests a more business-friendly approach to oversight.

The Smart Play: Think Local, Act Local 🎯

Here’s where it gets interesting – and where my original take comes in. While everyone’s celebrating the federal shift, keep your eye on the state level. Those state regulators? They’re like the substitute teachers who try extra hard to maintain order when the principal’s away.

Smart operators will:

  • Build strong relationships with state regulators
  • Create state-specific compliance frameworks
  • Document everything (and I mean everything)
  • Stay ahead of state-level policy shifts

The Secret Sauce: Consumer Education 🎓

Here’s my million-dollar insight: The best defense against future regulatory swings is an educated customer base. While some see financial literacy as a burden, I see it as our industry’s bulletproof vest.

 

Consider this: Every customer who fully understands their loan terms is a walking advertisement for responsible lending. Every successful repayment story is ammunition against our critics.

Your Action Plan 🚀

  1. Review Your Product Suite: What innovative lending products have you been holding back? Now’s the time to revisit them.
  2. Update Your Marketing: Emphasize education and transparency. Show the world we’re not just lenders – we’re financial partners.
  3. Strengthen Your Documentation: Yes, oversight is reducing, but smart lenders keep receipts!

The Bottom Line ��

This regulatory shift isn’t just about loosening restrictions – it’s about proving that our industry can thrive while serving consumers responsibly. The real winners won’t be those who push the boundaries furthest but those who use this freedom to innovate while maintaining ethical standards.

 

Remember: 60%+ of Americans live paycheck to paycheck. They’re not just statistics – they’re our potential customers, and they need access to credit more than ever.

Ready to Seize the Moment? 🌟

The regulatory gates are opening, but success isn’t automatic. You need a strategy that balances opportunity with responsibility.

 

Want to learn more about navigating this new landscape? Let’s connect and explore how your lending business can thrive in this new era.

P.S. This isn’t just change – it’s opportunity knocking. Are you ready to answer?

Schedule a Free 15 Minute Brainstorming Session >

You own storefront locations? 

  • Get found on your customer’s phone!
  • Get chosen!
  • Fund more loans.
  • Free via your Google Business Profile!
  • >36% APR loan products NOT a PROBLEM!
Title Loan Franchise
Learn More about getting found by borrowers nearby
car title loan franchise

4-WAYS I CAN HELP YOU!

 Grab a copy of our “bible:” Learn More

 Brainstorm: Learn More

 The Business of Lending: Learn More

 Free Bi-Monthly Newsletter: Learn More

 Google Local. Your business on your borrower’s phone. Learn More

    You want to put capital to work in the subprime lending industry? Email

12
Jan

Car TItle Loan P & L

Posted by / Uncategorized
Category Amount (USD) Percentage of Income
Income
- Fee Income (Title Loans) 3,045,222.98 90.1%
- Fee Income (Payday Loans) 333,056.59 9.9%
- NSF Fee Income 25.00 0.0%
- Income, Addison & Misc. 401.20 0.0%
- Refunds and Allowances -468.02 -0.0%
Total Income 3,378,237.75 100.0%
Expenses
- Advertising 16,091.91 0.5%
- Merchant Fees 32,385.69 1.0%
- Incentive Bonuses 940.00 0.0%
- Repo Fees 85,458.74 2.5%
- Licenses & Fees 2,544.25 0.1%
- Mileage Reimbursements 26,949.73 0.8%
- Office Supplies 34,073.42 1.0%
- Referral Fees 1,017.00 0.0%
- Rent & Occupancy 360,869.54 10.7%
- Repairs & Maintenance 27,514.80 0.8%
- Grounds Maintenance 2,850.00 0.1%
- Cleaning, Sanitation & Trash 3,688.43 0.1%
- Salaries, Operations 723,289.94 21.4%
- Employers FICA & ML Taxes 56,826.75 1.7%
- Security Monitoring Services 11,073.45 0.3%
- Telephone 33,712.87 1.0%
- Utilities 54,180.83 1.6%
- Internet Costs 1,535.39 0.0%
- Write-Offs 54,646.09 1.6%
- Property Taxes - Stores 1,740.76 0.1%
- Title Fees, Etc 11.75 0.0%
Total Operations Costs 1,551,905.58 45.9%
Other Expenses
- Automobile Expense 10,680.42 0.3%
Total Expenses 2,153,471.44 63.7%
Profitability
- Net Ordinary Income 1,224,766.31 36.3%
Total Net Income 1,224,766.31 36.3%
06
Jan

Subprime Lending Seasonality: When Credit-Challenged Consumers Seek Funding

Posted by / Strategies

Seasonality of Subprime Lender Transactions

Seasonality of Subprime Borrower Transactions

Timing is everything in lending, especially when serving credit-challenged borrowers.

Understanding the rhythms of demand—when needs spike and when they settle, can mean the difference between missed opportunities and maximized profits.

The table below captures the seasonality of subprime borrower transactions, revealing the patterns that drive their financial behavior.

Armed with these insights, subprime lenders can anticipate demand, tailor their offerings, and stay one step ahead in meeting the needs of their customers at just the right moment.

Trans Union Data

Payday loan business, car title loan business, installment loan business

Every great business decision starts with clarity.

In the world of subprime lending, where challenges and opportunities collide, understanding the landscape is the key to thriving.

The table below distills essential insights and actionable strategies, offering a clear path for lenders who serve credit-challenged consumers.

Whether navigating rising delinquencies, regulatory constraints, or shifting borrower behavior, this analysis equips you with the tools to turn obstacles into opportunities and ensure profitability in a competitive market.

Subprime Lending: Insights and Strategies for Profitable Growth

Subprime Lending Analysis
Category Observations/Analysis Strategies for Subprime Lenders
Delinquency Trends 60+ DPDs increased for UPLs for the 4th consecutive month. Bankcard 90+ DPDs are flat, but balances increased (+0.6% MoM). Implement real-time borrower analytics to detect early warning signs of default. Adjust underwriting criteria seasonally.
Loan Origination Subprime originations fell across multiple channels: fintechs (-11.6% MoM), credit unions (-22.1% MoM). Finance companies saw YoY increases in subprime originations (+34.3%). Diversify portfolio with loan products targeting near-prime borrowers. Target secured loans like auto title loans to mitigate risks.
Market Share Finance companies lead UPL balances (29%), followed by fintechs (27.8%). Subprime borrowers are migrating toward nontraditional lenders. Leverage digital platforms to improve accessibility and capture underserved demographics. Offer mobile-first experiences for onboarding.
Rising Borrower Stress Subprime delinquencies rising due to inflation, high cost of living, and increased bankcard balances. Borrowers prioritize secured debts. Provide financial literacy resources to educate borrowers. Introduce loan consolidation programs.
Risk Management Default risks rising for subprime loans due to macroeconomic pressures. Use behavioral data alongside credit scores for advanced risk profiling. Automate collections with predictive analytics.
Seasonality Tax season presents high demand for liquidity among subprime consumers. End-of-year obligations drive borrowing needs. Launch tax refund anticipation loans and targeted campaigns. Offer flexible repayment plans.
Regulatory Constraints APR caps limit profitability, especially in states with 36% caps. Restrictive policies create "loan deserts." Use compliant models like multi-state licensing or sovereign nation partnerships. Expand online lending in regulated markets.
Operational Efficiency Rising delinquencies increase operational burden. Adopt off-the-shelf loan management software. Optimize collections processes.
Competitive Environment Lenders shifting focus to prime and near-prime borrowers, increasing competition. Develop customized offers for near-prime borrowers. Monitor competitors and adjust product pricing.

Definitions:

Types of Loans Popular Among Credit-Challenged Consumers

Types of Loans Popular Among Credit-Challenged Consumers
Loan Type Description Potential Seasonality
Personal loans for bad credit Offered by online lenders specifically for borrowers with low credit scores. Demand will increase during periods of economic uncertainty or when consumers face unexpected expenses.
Family loans Borrowing from family members or friends. More prevalent during times of financial hardship, such as job loss or medical emergencies.
Buy now, pay later loans Short-term financing options that allow consumers to make purchases and pay for them in installments. Most popular during the holiday season and other periods of increased consumer spending.
Cash advance apps Mobile apps that provide small cash advances, often with fewer fees than payday loans. See Dave.com Demand is consistent throughout the year, with spikes during emergencies or unexpected expenses.
Payday loans Short-term, high-interest loans due on the borrower's next payday, with a loan length of two to four weeks. Usage increases during periods of financial strain or when consumers have limited access to other credit options.
Credit builder loans Designed to help improve credit scores for those with no or limited credit history. Demand is steady throughout the year, as consumers seek to establish or rebuild their credit.
Debt consolidation loans Used to combine multiple debts into one loan with a potentially lower interest rate. Demand increases during tax refund season or when consumers experience a change in financial circumstances.
Car title loans A type of secured loan where borrowers use their vehicle title as collateral. See AutomobilePawn.com Demand is higher during periods of economic hardship or when consumers need quick access to cash.
Installment loans Loans that are repaid over a set period of time with fixed payments. Demand influenced by factors such as interest rates, loan terms, and consumer confidence.

Subprime Lending Analysis and Strategies

Key Takeaways from the Data:

  1. Subprime Consumer Statistics and Impact:

    • Over 50% of U.S. households live paycheck-to-paycheck, and about 40% of households earning $100,000 or more do so.
    • Nearly one in three U.S. adults are subprime borrowers (credit scores under 620), with 40% unable to access $400 in an emergency.
    • Bankruptcy filings have risen consistently for 19 months, driven by high credit card defaults, inflation, and aggressive debt collection tactics.
    • In Illinois, a 36% APR cap resulted in a 44% reduction in loans to subprime borrowers, with consumers turning to illegal or informal sources for credit.

  2. Economic and Policy Context:

    • Regulatory measures like the Military Lending Act’s 36% cap have unintentionally created “credit deserts,” where consumers lose access to vital credit products.
    • High inflation and increased cost of living have amplified consumer financial stress, increasing demand for small-dollar, short-term loans.

Impact on Subprime Lenders:

  • The growing demand for emergency small-dollar loans represents an opportunity for subprime lenders but is constrained by regulatory restrictions, such as APR caps and increasing borrower defaults.
  • The seasonality of lending demand, particularly around tax refunds and year-end obligations, presents a critical period for maximizing revenue.
  • Stricter regulations reduce profitability by increasing compliance costs and limiting flexibility in pricing loans.

Strategies for Ensuring Profitability for Subprime Lenders:

  • Regulatory Navigation:

    • Employ legal models such as sovereign nation partnerships or multi-state compliance strategies to operate in restrictive environments.
    • Maintain a robust compliance framework to preemptively address new legislative challenges.

  • Diversified Loan Products:

    • Offer a range of loans (installment, payday, car title, and lines of credit) to cater to different consumer needs and mitigate revenue impacts from single product restrictions.
    • Explore alternative models like installment loans, which spread repayment over time and reduce delinquency rates.

  • Seasonal Marketing Campaigns:

    • Focus marketing efforts during peak periods, such as tax season, when consumer liquidity is strained.
    • Provide promotional loan products tied to tax refund advances or holiday financial pressures.

  • Risk Mitigation and Underwriting:

    • Use advanced underwriting tools (e.g., AI-driven scoring, bank account verification) to reduce default risks.
    • Implement conservative lending criteria while maintaining accessibility for subprime consumers.

  • Technology and Digital Channels:

    • Develop mobile-friendly lending platforms to capture the growing digital consumer base and streamline loan processes.
    • Utilize SMS, email, and social media marketing for higher customer engagement and loan application rates.
    • Get your GBP – Google Business Profile setup and functional in order to adverstise via Google without concern for the 36% APR caps!

  • Customer-Centric Approach:

    • Focus on treating borrowers with respect and providing financial literacy resources to improve repayment rates and customer loyalty.
    • Provide flexible repayment plans to retain borrowers facing temporary financial setbacks.

  • Cost Efficiency:

    • Automate back-office operations and adopt off-the-shelf loan management software to minimize operating costs.
    • Optimize collection processes through centralized tools and predictive analytics to maximize recoveries.

  • Partnerships and Alliances:

    • Collaborate with fintech firms to leverage technology and scale operations efficiently.
    • Join industry associations to stay updated on legislative developments and gain access to shared resources.

By implementing these strategies, subprime lenders can navigate regulatory challenges and maximize profitability while meeting the needs of credit-challenged consumers.

4-WAYS I CAN HELP YOU!

Grab a copy of our “bible:” Learn More

Embrace GBP: Google Business Profile in order to overcome Google’s 36% APR Cap! Learn more: LocalListingSuccess.com

Brainstorm: Learn More

The Business of Lending: Learn More

Free Bi-Monthly Newsletter: Learn More

Title Loan Lending: AutomobilePawn.com

20
Oct

The Untapped $4.2 Billion Title Loan Market: Who’s Desperate for Fast Cash?!

Posted by / How to Start

Why Subprime Lending Isn’t the Villain You Think It Is

Consumer Loans-Start a subprime consu,er loan business-Car Title Loans

 Lend money to subprime consumers who need quick access to cash but lack traditional credit options.

With car titles as collateral, you can offer life-saving loans for emergencies like car repairs or medical bills, while ensuring your investments are secured.

It’s a win-win opportunity: help consumers avoid NSF fees, keep their jobs, fill a prescription… while simultaneously generating significant profits with high APR loans to offset your risk.

Ready to capitalize on this lucrative market?

Discover the ultimate guide!

Invest in our 500+ page eBook, packed with step-by-step instructions to start and grow your title loan, payday loan, installment loan business. Don’t miss out!

Grab your copy now! >
How to Start a Loan Business

Financially Challenged Subprime Consumers Who Need Title Loans for Vehicle Repairs

  • Landscapers and Lawn Care Specialists
    • Rely on trucks for transporting equipment, making them vulnerable to vehicle breakdowns that could halt their income.
  • Food Truck Owners and Mobile Vendors
    • Their livelihood depends on a working vehicle to reach customers; repairs can be costly.
  • Delivery Drivers (Gig Workers: DoorDash, UberEats, Instacart)
    • Their income depends on keeping their vehicles in working order, and they often live paycheck to paycheck.
  • Rideshare Drivers (Uber, Lyft, etc.)
    • Must maintain reliable cars for work but may not have funds for unexpected repairs.
  • Construction Workers and Contractors
    • Use trucks and vans to transport tools and materials; vehicle breakdowns directly impact their ability to work.
  • Exterminators and Pest Control Specialists
    • Rely on service vehicles to transport equipment and chemicals to reach client locations.
  • House Cleaners and Janitorial Service Providers
    • Need their cars or vans to travel between job sites but may not have savings for repairs.
  • Pool Service and Maintenance Companies
    • Must travel to customers’ homes with chemicals and equipment, requiring a functioning vehicle.
  • Small Business Owners (Mobile Car Wash, Mobile Pet Groomers)
    • Depend on their mobile businesses but often struggle with sudden vehicle maintenance costs.
  • Daycare Providers and Nannies
    • Often need vehicles to transport children and manage pick-ups and drop-offs.
  • Independent Plumbers and Electricians
    • Cannot afford to miss work due to vehicle failure, as they rely on vans to carry tools and materials.
  • Home Health Aides and Caregivers
    • Use personal vehicles to travel between homes for caregiving duties and often live on tight budgets.
  • Personal Trainers (Home Visits)
    • Need vehicles to reach clients’ homes or fitness centers, and may not have cash reserves for repairs.
  • Farmers and Agricultural Workers
    • Often rely on trucks for transporting goods or equipment; a breakdown can disrupt operations.
  • Handyman and Repair Services
    • Independent workers need trucks or vans to reach job sites and carry equipment.
  • Emergency On-Call Workers (Tow Truck Operators, Emergency Locksmiths)
    • Must have reliable transportation for urgent calls, often working in low-margin, unpredictable industries.
  • Event Planners and Caterers (Mobile Services)
    • Rely on vehicles to transport food, decor, and supplies to events; a breakdown can jeopardize their business.
  • Taxi Cab Operators (Especially Independent Drivers)
    • May not have access to large cash reserves, and a vehicle issue directly affects their income.
  • Door-to-Door Sales Representatives
    • Need vehicles to reach various neighborhoods; a broken vehicle means a loss in potential sales.
  • Home Improvement Contractors (Roofers, Painters, etc.)
    • Require trucks and vans to transport materials, and unexpected breakdowns are a significant cost.
  • Courier Services (Local Delivery Drivers)
    • Often work independently with personal vehicles, and a repair cost could temporarily force them out of work.
  • Mobile Repair Technicians (Appliance, IT Repairs)
    • Depend on functional vehicles to visit customers and provide repair services.
  • Scrap Metal Collectors and Junk Removal Services
    • Rely on vans or trucks for hauling scrap and junk; vehicle downtime can mean missed income opportunities.
  • Moving Companies (Small Independent Operators)
    • Use trucks to move household goods and face potential income loss when their vehicles are out of service.
  • Seasonal Workers (Snow Removal, Holiday Light Installers)
    • Have short, intense working seasons where vehicle downtime could drastically affect their earnings.
  • Rural Postal Carriers (Independent Contractors)
    • Depend on personal vehicles to deliver mail in rural areas; repairs are urgent but funds may be limited.
  • Tour Guides (Who Provide Transportation)
    • Use personal vehicles for driving tourists, but may not have savings to cover repairs in off-season periods.
  • Pet Sitters and Dog Walkers
    • Often travel between clients’ homes and need a working vehicle to maintain their income flow.
  • Field Marketing Representatives
    • Travel to various retail locations or events and rely on personal vehicles for their job.
  • Traveling Salespeople (Business-to-Business Sales)
    • Use their vehicles to visit multiple clients daily; without a working vehicle, their sales efforts stall.
  • Seasonal Agricultural Workers (Harvesters, Pickers)
    • May travel long distances for work and rely on personal vehicles; repairs are often beyond their financial reach.
  • Freelance Photographers (Event and Location-Based)
    • Depend on cars to transport photography equipment to job sites, but often work on tight budgets.
  • Musicians (Touring or Gig Performers)
    • Need vehicles to transport equipment between venues, and breakdowns can result in missed gigs.
  • Independent Contractors (IT, Consulting Services)
    • Use personal vehicles for client visits but may not have access to funds for emergency repairs.
  • Seasonal Workers in Amusement Parks or Fairs
    • Often have limited work periods and may lack access to credit for vehicle repairs during off-season.
  • Mobile Barbers or Hairstylists
    • Travel to clients’ homes and rely on their cars for their livelihood but may not have emergency funds.
  • Furniture Movers and Independent Moving Laborers
    • Use trucks or vans to move furniture and rely heavily on working vehicles to sustain their business.
  • Artists and Craftspeople (Who Sell at Markets or Events)
    • Use personal vehicles to transport products to fairs, art shows, or markets but may not have funds for repairs.
  • Freelance Videographers and Cinematographers
    • Travel to multiple locations for shoots and need reliable transportation for both work and equipment.
  • Disaster Response Workers (Independent Contractors)
    • Need to be mobile to respond to emergencies, and a vehicle issue could prevent them from earning.
  • Low-Income Parents (Struggling to Commute for Work/Childcare)
    • Need their cars to juggle work, daycare, and school but often lack emergency savings for repairs.
  • Weekend or Part-Time Workers (Second Job Workers)
    • Use their vehicles for additional income and may not have sufficient savings if their car breaks down.
  • Temp Workers or Laborers (Short-Term Contracts)
    • Often rely on personal vehicles to commute to job sites, which can be scattered or far from home.

Conclusion:

This exhaustive list vividly illustrates the diverse range of subprime consumers who rely on their vehicles to maintain their livelihoods.

They often face sudden financial challenges that prevent them from repairing their vehicles.

Our detractors? Our overlords who believe they know how best to solve our financial challenges? I suggest they follow President Trump’s lead. Work the counter for a day! Perhaps french fry burns will enlighten them! 

Questions? Need help? Introductions to 3rd-party vendors who will enable you to transform your loan business? Reach out to Jer at: TrihouseConsulting@gmail.com 

4-WAYS I CAN HELP YOU!

Grab a copy of our “bible:” Learn More

Brainstorm: Learn More

The Business of Lending: Learn More

Free Bi-Monthly Newsletter: Learn More

03
Nov

How to Start a Car Title Loan Business

Posted by / Uncategorized
Car title loans are in demand by all demographics. I loaned $70K on a $300K motor home. I’ve loaned $40K+ on Lambos and Bentleys. And I’ve loaned $1000 to a small contractors who need to make payroll before completing a job. Customers run the gamut.
 
Yes, car title loans are considered expensive! Yes, they are usually a last resort. On the other hand, they offer access to fast, EZ, access to cash to solve a short-term financial challenge.
 
THEY ARE NOT FOR EVERYONE. We will repo your vehicle, However, IF you communicate with us we will do everything possible to avoid this. WE DO NOT WANT YOUR VEHICLE! We simply want our loan principal and fees appropriate for the risk we assume.
 
My best customers are small business entrepreneurs. They need cash for supplies, payroll, parts… APR’s are all over the map. I’ve done thousands of $500 loans for 30 days. The fee is $20/$100. So, my borrower receives $500 and 30 days later pays me $600. No big deal IF they pay as agreed.
 
The author is correct! Customer acquisition costs for a de novo car title loan lender are brutal. However, a seasoned car title loan store can compute life-time value approximately $3800; add to this family & friends. [Secret: Pay referrals a “spiff” of $75!]
 
“The business of lending to the masses” can be lucrative but it certainly is not EZ. A huge development today is the ability to initiate and fund car title loans via the Internet. The industry has developed several fabulous platforms for eliminating the need for face-to-face transactions! This is a game changer! Get a license in one city and serve your entire State! No need to rely on customers who live within a 20-20 mile radius!
 
If you want to learn more, I always recommend the Author’s tip; look around you. Do they already exist? Yes? Then you know they are legal and can be VERY profitable. Next step? Get one; get a car title loan. Get copies of everything! Go through the process. Strike up a conversation with the store CSR. Reverse engineer! Next, reach out to me. Jer Trihouse Let’s explore…
 
Consultant: How to Start a Car Title Loan Business
02
Oct

How to Get Your Subprime Car Title Loan Google My Business Listing

Posted by / Uncategorized
Hi Car Title Loan Lender,
 
Often, it’s the simple things that work well and yet we overlook them.
 
I received an update from TurnKey Lender & it sparked an idea for our car title loan portfolios.
 
Why not focus on car repair companies to acquire customers for car title loan Lenders? Transmission shops, tire shops, radiator repair… Do the “Enterprise Rent-a-Car thing” and bring donuts!
 
If you’re a brick-n-mortar, simply have one of your CSR’s spend a few hours every week canvassing your local auto repair service centers. Additionally, have your CSR gather business cards, phone numbers, email address, key employee titles & names… Enter them into an Excel spreadsheet at a minimum. Lacking the skillset/time, hire someone on Fiverr.com to perform this task for you, You won’t spend  more than $20!
 
PS: Although Google “hates” >36% APR loan products, you CAN get your location to appear in Google My Business Listings. Add plenty of pictures, get reviews [Refer to our Manual for tips & tricks to secure reviews and improve your listing.]
 
Check out these search results for 92663 Car Title Loan within Google.com:
 
Car Title Loan Locations in 92663 Zip Code
Slowly, build an outbound campaign for future marketing campaigns.
 
Offer $50+ cash to the car repair employees for every funded car title loan. CASH PAID IMMEDIATELY. Have the employee come to your location to pickup the $$$. [This way, they know you & may even use your services themselves one day.]
 
If you offer car title loans Online, even better! Buy lists from lead providers for automobile service centers in the geographic area you’re targeting. [Refer to our Manual for List Brokers.] 
 
Remember from studying the statistics in our Manual that the lifetime value of one car title loan customer can exceed $10,000?
 
That’s all for now. As you likely know, I’ve spent the past 7 weeks on a Fintech Project in Paris. So, I’ll report back to you on the results in a few weeks. Au Revoir, Jer and Team Trihouse Consulting.
 
 
08
Feb

California AB539 Solutions for Lenders

Posted by / California

<36%: Do you want to remain in business? We offer a turnkey program that will enable you to start/continue offering <36% APR title loans while maintaining a 200%+ ROI on your portfolio.

These solutions for continuing to offer <36% APR collateralized loan products “work” in all states!

1 in 3 Californians Struggle!

Nearly 1 in 3 Californians have a subprime credit score or no credit score at all,6 meaning they likely struggle to access credit through a traditional bank or credit union. Here’s the New York Fed Study: Click

We have 2 Solutions to choose for all States:

Offer CPI: “Collateral Protection Insurance” coverage to your title loan/collateralized borrowers.
OR
Collaborate with a federally recognized Native American Indian tribe. LeaningRockFinance.com ] #consultingservices #ab539 #tribelending #smalldollarloans

California AB539: The law became effective January, 1st, 2020. California Department of Business Oversight Law: Click Here CDBO

California Sub-36% APR AB539 Transaction Volume

Solutions for <36% APR Lenders

We’ve reviewed hundreds of existing California CFL consumer contracts. The majority already reference the forced-placement of collateral protection insurance to protect the lienholder from a catastrophic loss.

If your contracts do not already have this language, allow our 25-year experienced Team to provide your contract language free of charge.

Additionally, we offer a 100% turnkey package enabling your title loan company – in any State – to offer <36% APR collateralized loan products while still earning superior ROI on your business investment.

Simply email: TrihouseConsulting@gmail.com to schedule an exploration.

Native American Indian Tribe Collaborations

Additionally, if your offering consumer personal loans at ANY APR, we provide collaborations with Native American Indian tribes. This “works” just like the “bank model.” Visit LeaningRockFinance.com for an introduction.

06
Feb

How to Start an Alabama Car Title Loan Company

Posted by / Alabama

Opening a car title loan business in Alabama is easy, and can be very profitable. Alabama has specific licensing, regulatory and compliance statutes in place. You can access all the Alabama car title loan, pawn, small-dollar loan and payday loan license applications here: Alabama Department of Financial Institutions.

FAQ’s [Alabama Frequently Asked Questions] for entrepreneurs interested in launching or buying a small-dollar loan company are available there as well. Regarding payday loans in Alabama, there is a statewide database.

Frequently Asked Questions: Statewide Database for Deferred Presentment Providers Updated February 15, 2019
Frequently Asked Questions: Statewide Database for Deferred Presentment Providers Updated February 15, 2019

If you have invested in our “bible:” How to Loan Money to the Masses Profitably, you know that we advise readers of our course to study our Course carefully and then actually get a loan yourself.

How to Start a Loan Business
How to Start a Consumer Loan Business.

Here’s some interesting commentary from JD Supra regarding maintaining secured creditor rights in regards to Alabama car title loans & pawn.

Secured creditors must be ever mindful of their rights in consumer bankruptcy cases. Details that might seem technical or insignificant can mean the difference between a creditor’s obligation being secured and being unsecured, having a claim denied or having collateral released from the bankruptcy estate into the hands of the creditor, allowing the creditor to mitigate its financial loss.

In a recent case from the U.S. Bankruptcy Court for the Middle District of Alabama, a secured creditor was able to protect its interest in collateral in two bankruptcy cases where its title pawn transaction customers failed to redeem their pledged vehicles during the required time period. As a result, the secured creditor was able to obtain relief from the automatic stay and exercise rights against the collateral, resulting in a better financial result for the creditor.

As always, the technical details were important to the end result for the creditor. Donna Thompson and Kisha Daniel entered into title pawn transactions and several renewals with TitleMax of Alabama, Inc. Each customer provided TitleMax with the certificate of title to her vehicle, and those certificates of title identified TitleMax as the first and only lienholder.

Each customer then filed for protection under Chapter 13 of the U.S. Bankruptcy Code and declared her intention to repay TitleMax through her Chapter 13 plan. TitleMax objected to confirmation of both Chapter 13 plans and asked the court to grant it relief from the automatic stay with respect to both debtors’ vehicles, claiming that the vehicles were not the property of the debtors’ bankruptcy estates and were not subject to the automatic stay. TitleMax argued that the debtors failed to redeem their vehicles within the time period allowed under Alabama law and the Bankruptcy Code and that the court should grant TitleMax relief from the automatic stay with respect to both vehicles.

The debtors argued, among other things, that their transactions… the Pawnshop Act… Read more below,

10
Jan

How to Start a Car Title Loan Business

Posted by / Profits

LA’s billionaire king of subprime auto lending

Car title loan lenders get a bad rap from the majority of society because most people are unable to put themselves in their “brother’s shoes.”

Here is an example of a real-world car title loan lender who enables average folks who need a car in order to get to work, pick up their kids…

Setting the scene

Every weekday around 6 a.m. Don Hankey, 76, arrives by chauffeured car at his office near Hancock Park. Hankey started in the auto business nearly 50 years ago, when he took over his father’s car dealership at Vermont and Beverly. That business eventually grew into The Hankey Group, a collection of seven mostly car-related companies: Insurance, rentals, technology, but also real estate. The real moneymaker of the group, however, is Westlake Financial Services, a huge subprime auto lender that does business throughout the U.S., Mexico, India and the Philippines.

On a recent morning at 7 a.m., the company had already approved 286 deals. By the end of the day, Hankey said, he expected that number to hit 20,000. Interest rates for these loans can reach as high as 30% (versus the national average rate of about 4% on a 60-month loan). “We try not to say no,” said Hankey. “We just try to make it impossible to buy the deal,” either through high-interest rates or demanding more money down.

On accusations of predatory lending: 

“Let’s say you have somebody with bad credit, so they either have to pay 18% interest or not get a car at all. Are we better off just not giving them a car? I think they need a car. Maybe it provides a job for them that they wouldn’t otherwise have. There’s good and there’s bad to it, but I think that I think the good [out]weighs the bad.”

On the origins of the subprime auto lending boom:

“You know, people say they’re going to pay their house payment first. And then a funny thing happened in 2008, 2009 [during the mortgage meltdown] … Many people let their house go, but they needed that car, and they couldn’t go to work without the car. They left their house…and kept their car payments current.”

That means Hankey, and other lenders can make money two ways: From their borrowers paying back those high-interest loans, and by selling those loans off to Wall Street, where demand increased post-recession.

“People buy that credit. They were very concerned during the Great Recession that these things would default. But what happened is that almost all of them got paid in full, and you saw the defaults on real estate. People go out of their way to hold onto their car in a bad period of time.”

As long as people need cars to get to work, Hankey says, he’s not worried about a massive wave of defaults like what happened in the housing market a decade ago.  

Originally Posted here: “Subprime Auto Lending.”

Jer Ayles

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