Welcome To SingingPig.co.uk

I have started this thread for those who wish to start, or have already started in the cash loans business and wish to gain knowledge and to profit from the advice of people who are running it succesfully. I think for a start we can all see that this business can be a success if handled properly, lets face it; hundreds of small cash loan businesses operate all over the UK. As someone who in the last few months has started to grow a business that I hope and believe will sustain me for many years to come.

To start at the beginning might be a good thing, so I would like to suggest the following to those who dont currently have a Consumer Credit Licence: If you are applying for a licence then you will have to be patient, because the waiting time is now 90 days I am told. The Office of Fair Trading will probably want to come and visit you to ascertain your credentials and to ensure that you have all the knowledge to enable you to run the business in compliance with the regulations. This means showing them that you understand the early settlement regulations and that you have some knowledge of how to apply them. They may also want to see the consumer credit agreements that you will be using, which have to include some statutory references to inform the consumer of their rights under the various acts which are in force and that we all must operate our business within. Xmas is coming lets hope we can all thrive and prosper together - Jilly

I personally dont think that adding new loan customers at xmas is a good idea, what do others think of this?

Hi Jilly

Having tried to set up a home collected credit business I would suggest the following;

1) Before buying ANY of the courses / manuals on offer do some market research to confirm that there is demand for the product in the area. The only way to do this with any level of accuracy is to have some leaflets printed and distributed in the area you are considering, then WAIT to see what response you get BEFORE you hand over any money for the course/manual.

If you havent got your consumer credit license then ask the course/manual seller to let you use their credit license, and you just act as an agent/collector for them until you've proved if there is demand in your area.

In the areas I was looking to trade in we had so little response that we could not even cover the cost of the collectors petrol to pick up the repayments.

2)  I personally believe that growth in home collected finance is limited as people move away from home collected products (videos, milk, bread, etc etc) and turn buying these products online, due to the lack of stigma attached AND the ease of purchase.

Who wants to wait for the next Home Collected Finance leaflet to drop through their door if they need a loan today and want the cash within a couple of hours?

3) Your losses are likely to be much greater than you expect in the early days of your business - make sure you have PLENTY of cash available (at least double what you have initially allowed).

4) Dont invest any money that you can't afford to lose .

5) Have you got the right temprement to deal with home collected credit customers - calling at their home week in - week out, in all weathers, with all the risks this involves, just to pick up just a few quid. Its probable that you customers will try not to pay you from time to time,  and they will lie to you.... could you live with this over the long term?

Please dont take my comments / suggestions as negative, they are not. I just don't think that anyone should get into the finance business unless they have ALL the facts at their disposal.

And before anyone asks, yes I am still in the finance business, but not Home Collected finance.

And NO, Im not selling any courses or manuals.

Robert

 

 

bobbyboy:

Hi Jilly

Having tried to set up a home collected credit business I would suggest the following;

1) Before buying ANY of the courses / manuals on offer do some market research to confirm that there is demand for the product in the area. The only way to do this with any level of accuracy is to have some leaflets printed and distributed in the area you are considering, then WAIT to see what response you get BEFORE you hand over any money for the course/manual.

If you havent got your consumer credit license then ask the course/manual seller to let you use their credit license, and you just act as an agent/collector for them until you've proved if there is demand in your area.

In the areas I was looking to trade in we had so little response that we could not even cover the cost of the collectors petrol to pick up the repayments.

2)  I personally believe that growth in home collected finance is limited as people move away from home collected products (videos, milk, bread, etc etc) and turn buying these products online, due to the lack of stigma attached AND the ease of purchase.

Who wants to wait for the next Home Collected Finance leaflet to drop through their door if they need a loan today and want the cash within a couple of hours?

3) Your losses are likely to be much greater than you expect in the early days of your business - make sure you have PLENTY of cash available (at least double what you have initially allowed).

4) Dont invest any money that you can't afford to lose .

5) Have you got the right temprement to deal with home collected credit customers - calling at their home week in - week out, in all weathers, with all the risks this involves, just to pick up just a few quid. Its probable that you customers will try not to pay you from time to time,  and they will lie to you.... could you live with this over the long term?

Please dont take my comments / suggestions as negative, they are not. I just don't think that anyone should get into the finance business unless they have ALL the facts at their disposal.

And before anyone asks, yes I am still in the finance business, but not Home Collected finance.

And NO, Im not selling any courses or manuals.

Robert

Yes Robert I agree that market research is crucial in any business. I did try the leafleting method when I first started and I got a totally different response from one area than I did from another. the two areas looked very similar and were only 5 miles apart, but one yielded 1 call and the other 15, so it can vary from estate to estate. I already have 63 customers, and I didnt have much trouble getting these. The point is, that if I had given up after trying the first estate, then I would have assumed that the business was unworkable.

As to losses; I expect to lose a few over/after Xmas,  I have been told that it is usually the case that a few people spend too much over Xmas and then you have trouble re-starting the collections with those particular customers in the new year. I will see how this goes over the Xmas period and let you know on here how it transpires.

JillyC:

I did try the leafleting method when I first started and I got a totally different response from one area than I did from another. the two areas looked very similar and were only 5 miles apart, but one yielded 1 call and the other 15, so it can vary from estate to estate. I already have 63 customers, and I didnt have much trouble getting these. The point is, that if I had given up after trying the first estate, then I would have assumed that the business was unworkable.

Hi Jilly - not being someone who gives up easily, I actually tried leafleting in 3 different towns. Having distributed 15-20k leaflets we had in the region of 8-10 responses.

These customers were then spread over the 3 towns which made collecting a loss making exercise taking into account travelling expenses / marketing etc.

Imagine how I would have felt if I'd bought a franchise for a specific town only to find that there was little/no demand whatsoever

Robert

Robert, I am actually staggered by this. Your results are amazing, I am not surprised that you gave up. I am actually turning away business at the moment because I dont want to rush things, and I am telling people to get in touch after Xmas. I could easily put on 3 or 4 new calls a week with the response I get. I have no idea why your leafleting failed. Did you leaflet the rough council estates, or were you very selective in your choice of property?

JillyC:

... Did you leaflet the rough council estates ..

I'm sure that if Robert did this he'd have had loan applications by the thousand - you could count on one hand though those that would repay in full. 

Hi Robert, I agree with what you say about it all going online in today's market but I guess your customers need a bank account?  I was shocked at how few of my clients actually have these and so I guess they will always look at home collections as their only alternative.  Maybe a mix of the two approaches could work locally - e.g. apply online for approval and then agent delivers cash the next day.  Do you think this would work in a much simplified version of the software you use, much the same way a just a general online application form that is then processed manually?

Hi Robert

Yes, our customers do need a bank account, however I can see no reason why the business could not evolve to work with a Home Collected 'Cash Loan' type facility. Could be a good way of Home Collected lenders increasing their customer base, if they could access leads from Online lenders.

 

Robert