Small Business Loans — One of the hottest trends in finance today is micro lending. This is the lending out of small amounts of cash, usually without collateral. The concept has been popularized by Grameen Bank of Bangladesh and adopted successfully throughout the world by both profit and non-profit organizations, especially cooperatives in the Philippines. Millions of people have benefited from access to the loans provided by micro lending companies.
Micro lending has caught on even with banks and other financial institutions that previously thought it was not feasible. It turned out that most of the small time borrowers were also good payers, and since the interest rates were higher than the usual mark-up of banks or financing companies, the practice became attractive to the large lenders. For entrepreneurs who wish to go into this promising business, there are many things to learn to be successful. Here are some pointers for those who plan to put up their own micro lending business:
1. Locate in a secure place near your market.
For practical reasons, it is usually best to be located near your target market. Security must also be a consideration because you will be handling cash, so being near a bank would lessen the risk of robbery in transit.
2. Incorporate your company with the securities and exchange commission.
Cooperatives, however, are registered with the Cooperative Development Authority. The current law does not allow sole proprietorships or partnerships to go into the money lending business.
3. Have sufficient capitalization.
There must be a minimum paid-up capital of P1 million. In actual practice, how you allocate your capital will affect the viability of the business. Conserve on expenses like renovation and expensive furnishings, as this will allow you to have more funds available for lending out.
4. Be knowledgeable of the laws governing the business.
You must know and comply with the laws pertaining to the micro lending business. The most important is the Lending Company Regulation Act of 2007. To be able to apply this, you must also read the implementing rules and regulations of the laws. Some of the other relevant laws are the Truth in Lending Act and the Consumer Act.
5. Learn how to compute the amortization and documentation of loans.
This is important so that your customers will be billed correctly and you get the right margin. Proper documentation of the loan is critical later when you have to take legal action in order to collect.
6. Be careful in screening clients.
The best way to reduce losses due to bad debts is to avoid poor payers in the first place. To do this, there must be a thorough credit investigation to assess character. Collateral must be treated only as a secondary remedy because of the long and difficult process of foreclosing.
7. Take advantage of the small claims court.
To minimize your collection expenses, you should pursue bad debtors in the small claims court. This court will save you money in legal expenses because lawyers are not allowed in the proceedings. However, the court will only hear cases if the original principal amounts to not more than P100,000; but almost all loans in micro lending are below that amount anyway.
There will always be a big demand for small loans, and the micro lending entrepreneur is well placed to cater this need. Want to learn more about this business? BusinessCoach, Inc., a leading business seminar provider, conducts seminar on How to Start a Micro Lending Business.
Overview of the Seminar
During these hard times, a lot of people would seek the help of those engaged in micro lending. It’s one way to help support their families, and to ease poverty. A good system is needed to operate this business. This seminar is highly recommended if you want to engage in this business.
The seminar aims to teach the actual and potential income in micro-lending business. Specifically, it aims to cover the logistics and strategies to operate your own firm.
Who Should Participate
The seminar is designed for those who would want to engage in the micro-lending business.
• Definition (lending, micro-lending, interest, service charge, collateral, rebates, offsetting, fees, mode and terms of payments, annotation)
II. Important Matters to Consider
• Initial capital required
• Market study (target market, area, office location layout and structure, business trends, crime rate, competition, culture, local government policies and regulations)
• Legal requirements and legal aspects
• Human resource requirements
• Complete manual of operation (organizational structure, loan products, flow of operation, accounting system, human resources, company policies and guidelines)
• Capital expenditures and pre-operating expenses
• Business and marketing plan (projections, strategies and promotions, plan of actions)
• Gantt chart
III. Elements of good character and loan evaluation
IV. Collection and monitoring
V. Delinquency analysis and management
• Systematic and strategic approach
• Legal remedies and solutions
VI. Profitability and progress
• Return of equity
• Portfolio management
• Decision making
• Human resources
VII. Reminders and tips
• Business ethics
• Social responsibility
9:00 am – 4:00 pm
Unit 201 Richbelt Tower, 17 Annapolis St., Greenhills, San Juan City, Metro Manila
Php 3,000.00 per person (inclusive of snacks, lunch, seminar kit, handouts, certificate of attendance)
10% Discount if FULL AMOUNT is paid at least five (5) days before the event.
Please call to register, or you may download our registration form. Kindly fill-out, and send to us through fax (727.88.60) or email. You will receive a confirmation within 48 hours.
Mode of Payment
• Deposit payment at Banco de Oro, Savings Account Name: BusinessCoach, Inc. Then kindly fax deposit slip (indicate the name of participant and seminar title) to confirm reservation.
• On-site payment (CASH only)
• Company checks are accepted, provided that they are received at least five (5) banking days before the event.
Cancellation by Attendee
Registrant may refund amount paid, with less 30% processing charge from the LISTED AMOUNT within 30 days, or opt to use the payment for a seminar of equal value within 60 days. Cancellation must be done at least 2 days before the event. Non-appearance or failure to inform us of cancellation will result to forfeiture of full amount paid.
Cancellation by BusinessCoach, Inc.
Registrant may refund full amount paid within 30 days, or may opt to use the payment for a seminar of equal value within sixty days of cancellation.
Payment may be refunded upon presentation of the original copy of bank deposit slip and a valid ID. Cash refund is strictly implemented, and may be availed only at the BusinessCoach, Inc. office in San Juan City, Metro Manila. BusinessCoach, Inc. does not deposit refunds.
Schedule may change without prior notice. Please call to confirm. BusinessCoach, Inc. is not liable for any expense incurred by seminar registrant resulting from cancellation of any of our events.
Please call (632) 727.56.28, (632) 496.69.49, or (632) 727.88.60
or call/text mobile numbers 0915.205.0133 / 0908.342.3162 / 0926.622.0768 / 0933.584.7266
Or visit http://www.businesscoachphil.com for details.