According to section 2 of the NBFIRA Act, any person who engages in a micro-lending business, advancing loans below a specified threshold, is required to have a micro-lending license. This requirement does not apply to a person licensed under the Banking Act or the Building Societies Act. Businesses requiring micro-lending licenses include cash loan businesses and pawn shops.
Requirements for Obtaining a Micro-Lending Licence
- Covering letter on company letterhead
- Completed Form 1
- Vetting documentation (biographical/personal questionnaire affidavit, DIS form, ID, and police clearance for all controllers)
- Proof of financial liquidity – certified by an accountant
- Proof of payment of associated license fees
- Proof of company incorporation
- Detailed 3 – 5 year business plan
- Latest financial statements, (for existing businesses)
- CV/Resume of company manager and/or Principal Officer
- Resolution of the board, if a registered company
- Proof of an established office or letter of intent to establish premises
- Standard proposed loan application form for customers
- Proposed dispute resolution and complaints guidance
- Proposed organizational structure
- Proof of registration with BURS
What is needed for a cash loan business?
You will need to open a bank account for your money-lending business.
Open a bank account.
- Business tax identification number (or Social Security Number if sole proprietor)
- Business license.
- Business name filing document.
- Articles of incorporation with corporate officers listed (for a corporation)
How do I start my own loan business?
Steps To Start a Loan Business:
- Choose the Name for Your Loan Business.
- Develop Your Loan Business Plan.
- Choose the Legal Structure for Your Loan Business.
- Secure Startup Funding for Your Loan Business (If Needed)
- Secure a Location for Your Business.
- Register Your Loan Business with the IRS.
- Open a Business Bank Account.
Can I start a money lending business?
Requirements for Money Lending Business
Licensing requirements vary from state to state, but you can usually find everything you need through the Secretary of State’s office. In addition, look into whether you need local or municipal licenses. You need to register with the U.S. Securities and Exchange Commission (SEC).
How do lending companies make money?
Closing costs fees that lenders may make money from include application, processing, underwriting, loan lock, and other fees. Yield spreads include the spread of the rate that a lender pays for money they borrow from larger banks and the rate they charge borrowers.
How do I start a money-lending app?
All users have to do is:
- Install the app.
- Register a new account or log in with their credentials.
- Select the sum they need to loan or the money they are ready to invest.
- Select the interest rate suitable for them.
- Connect their bank accounts to their lending app accounts.