Showing posts from June, 2019

Making Unsecured Loans for (Reasonably) Safe Profit

I had a phone call with a potential customer the other day.   They were looking for some software to manage their loans as they start a relatively new lending business.   After finding out more about the type of loans they planned to make, the typical amounts, repayment timelines, etc. I confirmed that Moneylender Professional would be more than adequate to handle the task.  Our conversation moved onto the business of making loans well. This lender asked how to make sure the loans get repaid when the debt is unsecured.   How do you decide who will get your money to make sure that you always get paid back?   We talked about it for quite some time, and we came up with a few key ideas to answer this question. Is the need for the loan prudent? First, is the borrower trying to pay routine bills, or is the loan for something unexpected and urgent?   If the borrower is just restructuring debt, that’s probably a job left for banks or credit cards.   Paying utilities or rent?   T

Get Organized with Loan Servicing Software

Many people end up with a loan and think that it’s totally manageable to do the math themselves and keep track of it all in Excel.   For a while, things are going pretty smoothly.   Annual tax season comes around and the crunch to figure out what numbers to report to the IRS and your borrower, and after a little digging, we get some numbers that look right.   For a time, things are great. Then the borrower want’s a payoff quote, or needs to show a recent statement to someone, or they start missing payments and catching up, or the late fees are getting lost because there isn’t an easy way to stay on top of them.   The numbers for the IRS are harder to dig up.   Maybe the borrower files bankruptcy and the court needs detailed documentation, or you have to foreclose and more documentation is required.   Maybe there’s a dispute, or an adjustment, or some other change that starts to break the consistency of the formulas in Excel. That’s when you need loan servicing software .   Go