How to Start a Car Title Loan Company

A car title loan business can be a profitable business venture. These businesses are typically considered to be recession-proof investments, because when people fall on hard times, they are more likely to need money in a crunch. With a high demand for the service and car title loan companies making profits of 10 percent to 35 percent on each transaction, these companies can be incredibly lucrative.

Instructions

1. Draft a written policies and procedures document that will serve as a handbook to guide employees on how you want your car title loan company run. Start by identifying all the routine tasks and functions that employees can be expected to encounter, then identify the policy for each item and provide instructions for how the policy is to be carried out. One important policy decision faced by car title loan companies is whether the car must be held on property or if having the signed title on file is sufficient. There are also cash management procedures to keep in mind with this type of business.

2. Find a location that is suitable for your car title loan business. The building should contain ample working space for the employees that you need. If your policy is to retain the vehicle on the premises, you will also need a secure parking area with a lot of lighting and surveillance equipment. If you prefer to only retain the signed title to the vehicle, a file room contained within a fire vault is more than adequate.

3. Hire the staff that will work at your car title loan company. Larger urban areas may require several employees working as loan specialists, while a small town business may require only one or two people to run the entire operation. A financial degree is preferred for anyone working in a car title loan company. Work with an employment agency to prescreen candidates, then conduct final interviews yourself to determine who you would like to hire.

4. Implement an advertising strategy to announce the opening of your car title loan company. Car title loan companies are typically localized businesses, and advertising in local media is typically the best method of advertising these businesses. Local newspapers, radio and television are advertising mediums that can generate a large amount of interest at the local level. Determine how much money you can afford to spend on an advertising campaign, then organize a strategy that maximizes the audience you can reach with that budget.

Tips & Warnings

• Laws governing car title loan businesses are always subject to change. It is important to not only consult legal counsel before starting a car title loan business, but to also maintain that counsel and seek advice on a regular basis.