For Filipinos, applying for loans might be a bit of a hassle especially with the requirements and background checking require. Some people had the idea of turning the loan ability into something much easier and faster but, it may incur interests that depend on how much you are planning to borrow. In this article, we are going to give you a peek on the money lending business and how you can start your own.
It might sound scary and frightening at first because you do not have any means of securing your money but that ‘s what the good part is – people will definitely borrow money from you and it is your obligation to keep a close watch at people who lend from you to properly secure your money.
So what do you need to start a money lending business?
- Education about the business – you will need the laws, the computation, the rules and many things about the business. Before you dive straight into it, be sure to study it first.
- Money – of course, you cannot proceed with the business without having something to lend borrowers, right? You will need a little above Php100, 000.00 and it is a guarantee that your money will grow in time – you just have to be patient.
A few pointers to remember:
- Make sure that you reside on a location near your target market. It is best to be safe because what you will be handling is all about cash, money, and wealth. Having your office near a bank can lessen robbery chances.
- Micro Lending businesses require you to have a paid up amount of P1M but if you just wish to start lending money to people around your area or people in your workplace, you can have that ceiling lower.
- Computation for amortization and documentations is a must. In this way, your customers would be aware and confident that they are being billed correctly and just for you to successfully market your business.
- Be sure that your strategies in the interest rates would benefit you and your customers. Say, an individual is to borrow P5, 000.00 you can have him pay P3, 000 each month for two (2) months; you will then have an interest of P1, 000.00 Having it one-sided can cause your lending ability to float hence, you won’t have people who will borrow from you.
- Ensure that your customers will pay you and how can you do that? Here are a few tips:
- Ask them information like how much they can pay at the end of the deal, how much they earn, and how they can comply to the arrangements.
- Before saying yes to potential buyers, ensure that you have a back-up plan if in any case the borrower won’t show up at the date of the arrangement. This is why locating near your target markets is a necessity.
- One technique is that you can get ATM Cards of the borrowers (this is usually done in call centers or by other lenders so that payment is ensured on their part).
Read: Why record keeping is important in starting a business
So there you have it, lending money is quite tensioned if you would think of it but in the end, if all goes well, then you would have a big smile on your face because your business is a success and you have now more means to make it grow. What do you think about the money lending business? Would you fit this industry?
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