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