Starting a business can be a fun adventure and payday loan businesses have already been proven to be successful. There are a few steps to take when it comes to opening your own paycheck loan company and a few risks that you need to be aware of.
Decide on a name
This is probably one of the most important parts of starting a paycheck advanced business. You will need to have a name so that others can find you and so, you can declare your business to the tax office. You need a name that is catchy and memorable.
Declare your business to HMRC
You have three months from the start date of your business to do this, so it isn't necessarily the second step to take. However, you need to make sure that you do this so that you don't face a fine.
Decide on your loan requirements
Traditionally, lenders of payday loans don't do credit checks. This leaves you at high risks of loaning to someone who defaults on their payments. Set up requirements for your loans based on the borrower's current financial situation. Look around to see what other lenders do.
Draw up a contract
You need this for every loan that you approve. You should include the terms and conditions of the loan, along with the amount, due date, interest rates and any fees that you are including. You should have your business lawyer look over this to catch any loopholes that you've created or ask your lawyer to do it all for you.
Make your website
People need to find you and apply for the loan. Hence, a website for your loans company in the UK is the best way to do this. If you have no coding knowledge, you'll need to have a professional do it since there will be a lot involved for the application forms.
Set the loan fees and rates
You'll need to decide on the fees of the loans and the rates of interest involved. Look around at other companies to see what fees they charge. Pay close attention to how they handle the first month fees and when they introduce the interest rates because this will affect your custom.
Draw up a business plan
You'll need money to start your company out and you'll need business loans from the UK to do that. Take your time to draw up a plan to show how you will spend the money and pay it back. This will also help you to determine how you're going to run your business.