In this article, we will discuss the development of a SWOT analysis, its development, and how it can be used to acquire financing from a bank or investor. Payday lenders are generally able to remain profitable and cash flow positive in any economic climate due to the fact that they are able to provide a loan service that is in constant demand among the general public. One of the best aspects of this business is that they can generate high gross margins from their lending services. A well-written SWOT analysis will feature a strengths section, a weaknesses section, and an opportunities discussion and a threats discussion.
Most important and first, you’ll want to focus heavily on the strengths associated with your payday lender. First, you need to reiterate again the high gross margins generated by your Payday Lender home equity loan services while also showing the generally low costs associated with operating this type of business. Another important mention should be the relatively low overall cost associated with operating this type of business, as they are usually located in high traffic areas among low income individuals.
Also within the strengths section of the SWOT analysis, you should focus on your abilities to operate this business on a day-to-day basis, your experience as an entrepreneur, and how you intend to bring your payday lender’s operations to profitability very quickly through of your loan transactions.
The following section of the SWOT analysis significantly focuses on the weaknesses associated with this type of business. First, you should fully discuss the fact that there are many other types of businesses that operate in a similar capacity as your payday lender. You may also want to look into the relatively high upfront costs associated with a payday lender. Additionally, you’ll want to look at the default rates associated with the regular operation of this business. Here, you should also focus on how you intend to mitigate losses when it comes to payday loans.
Next, you’ll want to focus significantly on the opportunities your business will have to expand during its first five years of operation. This may include developing new locations, hiring additional staff, and engaging in a broad-based marketing campaign that will ensure your payday lender business can expand quickly and pay off your debts in a timely manner. You can also discuss how you intend to raise additional capital to expand your lending operations.
Finally, you’ll want to effectively show your SBA loan banker or investor the threats your payday lender will face. We strongly recommend that you highlight a number of these issues, as it will be beneficial for your investor or banker to see how you intend to mitigate these risks over time.
As always, we strongly recommend that you work closely with a number of professionals, including CPAs, attorneys, SBA loan consultants, conventional loan consultants, and other professionals who will ensure you have produced a SWOT analysis and plan. business that is appropriate for both a bank and a potential investor. It is imperative that you have a clear understanding of the complex nature of raising capital for your business and by having a number of professionals in place, you will be in an outstanding position to receive the capital you need to start your Payday Lender.
