Ever since the FCA (Financial Conduct Authority) regulation was introduced in January 2015, the payday loan industry in United Kingdom has witnessed a transformation that is worth being noted. At almost every corner of the street you could see kiosks and billboards screaming out for attention as if beckoning borrowers to experience what this phenomenon called payday loans was in the first place when it first started making inroads into the consumer market.

Payday loans – blessing or curse

Undoubtedly, payday loans can save you from a financial crunch and if you are responsible enough and return the money within the stipulated time period, it can be a saving grace for you. But the trouble starts when you do not repay the amount. However, keeping a positive frame of mind, let us assume that you are a responsible debtor and that you want to start a business of your own in this field. How will you go about it?

Starting a payday loans business of your own

Since you want to take the plunge in this business, you must be well aware of the risks and benefits of investing your hard earned money in this business. After all you don’t start a business thinking that you won’t be able to run the show. If you dare to try, the chances of succeeding are also high. There are a couple of important aspects that you ought to keep in mind before you jump onto the bandwagon and what are these aspects in the first place? You can click here to know the details till then let us take a look at them in the following points-

• Risks involved

Just as Payday loans can bail you out of a cash crunch; it can force you into a vicious cycle of debt. The reigns are in your hands, and which way you prefer to move depends entirely on you. You ought to know the risks that are involved in the business. You might offer the money to someone in need and the individual does not return the money to you within the repayment period. Remember, such instances might be many and not just restricted to one or two. So, you have to be mentally prepared to handle such discrepancies.

• Chalk out a business plan

Marketing will essentially form an integral part of your business strategies. Alternatively, you could opt for a business template if required. Means of communication with prospective leads and your target audience need to be worked out. Networking with banking as well as non banking financial institutions has to be looked into.

• Calculating assets

It is important to work out your net worth or your assets. This is crucial because depending on your place of residence or place of operating business, you might have to meet certain requirements to enable you to lend money to people. Make a list of your assets that include your assets in stocks, real estate, annuities, bank accounts, and expensive office equipments.

• Applying for a license

Once you have calculated the assets, it is time for applying for a license. This usually involves a bit of paperwork. Also, you will have to submit a fee for your application and furnish the accurate details that have been asked for in the application form. This also includes background checks be it financial or social. However, the fees are usually non-refundable.

• Mode of operation

Now that you have almost completed the homework and due diligence, you must have decided by now how to lend the money. You have options that include a brick and mortar office also called storefront payday loans or online payday loans. In case of the latter, you can just invest in 3 to 4 personal computers or laptops with internet connectivity (depending on the size of your business you intend to start).

Apart from the above, you also need to do the most important part of the calculation and that is to set the price of the loan that you are shelling out. This will include working on the APR or Annual Percentage Rate, rate of interest, and eligibility criteria for availing the loans. However, an important aspect that you ought to keep in mind is that unlike a few years back when more than 29,000 complaints were registered, over the years, the incidence of illegal and unethical activities related to payday loans are bound to reduce owing to the fact that it is being closely monitored and regulatory norms are in place and are very stringent.

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Ever since the FCA (Financial Conduct Authority) regulation was introduced in January 2015, the payday loan industry in United Kingdom has witnessed a transformation that is worth being noted. At almost every corner of the street you could see kiosks and billboards screaming out for attention as if beckoning...