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Offering finance to consumers as a business
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I am about to setup a telemarketing business and i would like to offer 6 months interest free loan. How do I set up a partnership with a loans company where they will pay us commision if they take a loan out and we take all the details and do a credit check and get an instant decision. I know that I need to get a consumer credit license what does that involve? Would it be possible to set up an agreement with aall these loan companies like dialalone etc
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To get a Consumer Credit Licence you need to contact the Office of Fair Trading. If you are a sole trader it will cost you around �120, if a partnership or limited company around �275.
Try their website for more details: www.oft.gov.uk
I am unsure as to what your plan is though. Selling an interest free loan is pretty easy, but why would the finance comapny pay you a comission? They won't make any money out of lending money with no interest.
Also bear in mind that a lot of regulations are changing today (31/5/05) and will change again in the (probably) next 18 months when the Consumer Credit Bill gets passed. It ran out of time with thte election, but most people (eg CCTA - Consumer Credit & Trade ASsoc) are convinced that it will pass through in the next 18 months.
For futher reading you can try the Department of Trade & Industry site - www.dti.gov.uk.
Also be aware that if it is a telemarketing company , Distance Selling Regulations 2000 will come into force aswell.
It is not easy to set up agreements with loan companies - you need to be a good risk - ie have a business plan, be a home owner etc, as they will be relying on you for a lot of trust.
The agreeements will be cancellable as they won't be signed on trade premises so they will also have a 14 day cancellation period
Try their website for more details: www.oft.gov.uk
I am unsure as to what your plan is though. Selling an interest free loan is pretty easy, but why would the finance comapny pay you a comission? They won't make any money out of lending money with no interest.
Also bear in mind that a lot of regulations are changing today (31/5/05) and will change again in the (probably) next 18 months when the Consumer Credit Bill gets passed. It ran out of time with thte election, but most people (eg CCTA - Consumer Credit & Trade ASsoc) are convinced that it will pass through in the next 18 months.
For futher reading you can try the Department of Trade & Industry site - www.dti.gov.uk.
Also be aware that if it is a telemarketing company , Distance Selling Regulations 2000 will come into force aswell.
It is not easy to set up agreements with loan companies - you need to be a good risk - ie have a business plan, be a home owner etc, as they will be relying on you for a lot of trust.
The agreeements will be cancellable as they won't be signed on trade premises so they will also have a 14 day cancellation period
How can I offer 6 months interest free loan or straight foward finance to a consumer,but I would like to offer the option of finance. Is it possible to act as a third party for a bank we do a credit check etc on behalf of the bank etc. I just though as acting as an agent for the bank we might get commision as we are bringing business for the bank? What are my options to how can I offer finance.?
It is possible to act as a broker, but financial institutions are very picky about who they take on.
What sort of goods are you selling? How much will the average transaction value be? What sort of warranty is involved and who is it with?
Banks will have an equal liability as regards the goods, so they will need to make sure that the goods are of decent quality and can be repaired easily if needs be.
You can do the credit searches yourself, but most banks will want to do it themselves anyway.
It is possible to get a commission for selling finance, but it is dependent on a number of factors.
What sort of goods are you selling? How much will the average transaction value be? What sort of warranty is involved and who is it with?
Banks will have an equal liability as regards the goods, so they will need to make sure that the goods are of decent quality and can be repaired easily if needs be.
You can do the credit searches yourself, but most banks will want to do it themselves anyway.
It is possible to get a commission for selling finance, but it is dependent on a number of factors.
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