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Payday Loan
Internet Vs. Store
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E-lending |
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Store |
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Sales |
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Loan Revenue |
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Total Sales |
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100.00% |
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100.00% |
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Expenses |
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Bad Debt |
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24.73% |
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19.90% |
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Wages |
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0.00% |
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8.08% |
|
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Office Expenses |
|
2.30% |
|
8.92% |
|
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Telephone / Internet |
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3.50% |
|
5.98% |
|
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Bank Charges |
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4.00% |
|
5.87% |
|
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Advertising |
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10.17% |
|
6.52% |
|
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Office Supplies |
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1.50% |
|
1.63% |
|
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Collection Fees |
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0.14% |
|
0.90% |
|
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Equipment Rental |
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0.93% |
|
0.80% |
|
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Insurance |
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0.00% |
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0.37% |
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Human Resources |
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0.00% |
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0.35% |
|
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Rent |
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0.00% |
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17.66% |
|
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Card Costs |
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1.80% |
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Total Expenses |
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49.08% |
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76.97% |
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Owners Compensation |
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50.92% |
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23.03% |
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In this comparison loan
revenue
numbers are the same for loans in both the store and the
internet Payday Loan model. Using the internet model the owner can do
all the loans, however in the store he will be required to
higher a part time person to cover all the hours*. The major
differences are the overheads. In the Payday Loan store model the
expenses will be higher including telephone costs, supplies,
and rent. The internet model can be done from home using an
existing internet connection and no rent.
Revenue
Internet based technology is
spawning a new type of payday loan customer. Working middle
class, that prefer the privacy of their own home, have
better paying jobs, own computers, and due to escalating
life style needs, search the internet for short term loans.
Below are the actual results of Cash-X' internet lending
program during the initial 11 week launch.
|
Week |
New Loans |
Repeat Loans |
Total Loans |
Revenue |
|
1 |
90 |
0 |
90 |
$3,060 |
|
2 |
210 |
10 |
220 |
$12,100
|
|
3 |
180 |
60 |
240 |
$18,000
|
|
4 |
140 |
200 |
340 |
$25,500
|
|
5 |
140 |
160 |
300 |
$22,500
|
|
6 |
70 |
210 |
280 |
$21,000
|
|
7 |
90 |
210 |
300 |
$22,500
|
|
8 |
60 |
270 |
330 |
$24,750
|
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9 |
100 |
180 |
280 |
$21,000
|
|
10 |
120 |
220 |
340 |
$25,500
|
|
11 |
100 |
310 |
410 |
$30,750
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Labour Hierarchy
(The demand for Service)
Labour efficiency is achieved
by utilizing a call center approach to lending. Customers
service requirements are diminished and calls can be handled
much more efficiently than face to face lending. In addition
administration can be handled at off peak times since
customers demand for service is reduced. This model is
common place in a multitude of industries including banking
and insurance.
Click here to see the Side-by-Side Comparison
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