How To Start a Lending Business in Canada

Wondering how to start a lending business in Canada?

In this article, we take you through steps to consider. And introduce to a secret tool used by professionals that you can use as well.

Canada is the second-largest country in the world after Russia and one of the most sparsely populated. 

 It borders the United States to the south and the US state of Alaska to the northwest, it is a great place to go for its excellent geographical sceneries. 

It is a good tourist site and hence makes it a great place to start your business.

lady holding canada flag overlooking the mountains

Away from history, let’s learn how to start a lending business.

What is a lending business?

It’s a business transaction that a loaner gives money or other assets to a borrower to get it back with interest.

It’s simply borrowing and returning with interests.

How does the lending business work?

It is a two-way transaction; the loaner who gives, and the debtor who receives. It also involves payment with interests, overdue fines, and collateral too.

Is the lending business profitable?

Yes, for once you give a few amounts and it returns with gains. Interests, fines, and overdue payments make sure you gain from the lending. 

Where to register money lending business?

This depends on different countries, as for Canada you will register with the legal office of the registrar of businesses.

What to consider before starting a lending business:

  1. Safety- know the environment where you want to set up and the risks involved as well as the solutions to them.
  2. Research- get more information about the business, risks involved, profits, and much-related information about the business.
  3. Understand legal laws- get information on how much you should include on interests, and many other related business laws.
  4. Terms and conditions-are the guidelines to help clients in the business lending process.
  5. Having an online presence- a website is a great way to show more about your business and the transactions it is involved in.
  6. Costs- know how much it costs to register, start up, and run the business.
  7. Competition- know what the competition is providing and where you can better your services.
  8. Business Plan
  • Company analysis- have information about goals, missions, and any other important company information.
  • Market analysis- know your customers, competitors, and many other economic factors.
  • Marketing Strategy- have a way to reach people and turn them into sales.
  • Financial projections- have a projection based on research on how your business will be in the next coming year.
  • Product or service- give all information on how to get the product, when not applicable, terms and conditions, and related information.
  • Investments and financing- how much will it cost to start up, run the business.

How to start a lending business in Canada

  • Get documented- if you have moved into the country and decided to set up the business there visit the immigration department.
  • Register your business- this involves visiting the legal business registration offices and submitting your application.
  • Name your business- get a name that will easily catch your clients, and it has lending-related terms.
  • Trademark your business- make sure no one uses your name to earn or make illegal deals out of it.
  • Gather information about the market- get all information you need on clients, competitors, and how best to deal with situations.
  • Understand lending laws-  Section 347 of the Criminal Code of Canada sets the maximum allowable annualized interest that may be charged at 60% anything above that is Illegal.
  • Get business insurance- safeguard the business in cases of fraud, theft, or any other occurrences that may bring down the business.
  • Gather funds and other resources- get all you need for the business and set aside assets to use for your business.
  • Get a Bank account- this is to keep your business resources from personal ones and safeguard different assets.
  • Choose a payment processor- you don’t have to always wait for cash payments, you can choose also wire transfers, credit cards, PayPal, and many others.
  • Get office space and supplies- get all the required materials for your office to be able to run.
  • Hire good help- get people trustworthy to help you run as well as manage your clients.
  • Establish web presence- create a website that will give details about your website and all other related information.
  • Have good business practices- protect your client and their data as well as keeping the business safe from malicious people.
  • Have a way to screen clients- make sure you don’t just give money to everyone without information about them and how to get in touch with them.
  • Start the business- it’s the final step once you have gathered all that you need and committed to following the laws.

Lending business is risky,  but with proper research, planning, and financing you get your idea off the ground. It becomes easy to run it.

However, there is a strategy or rather software that can help you with the business of lending. So what is this software?

Introducing Jisort:

Jisort is a credit management software that has been running for 6 years which has been helping microfinance institutions, Banks, loan lenders, and many other financial institutions.

jisort lending software in canada

Being web-based it has been able to integrate with:

  • Banks
  • M-Pesa
  • Tigo
  • PesaLink
  • Credit Reference Bureau
  • Vodacom
  • Among many others.

Why use Jisort?

  • Simplicity- get all your information in one place dates, amounts, clients, and the related information
  • Cheap- with just $20 you can manage a vast number of clients and always keep records of all transactions.
  • Payment model- since it has integrations, payment methods are wide and not limited.
  • Open API to readily extend system functionality or customize to fit your custom need.
lending software dashboard

This is a simple demo of how the system looks works, and the different attributes available. The system also helps you keep records on who, when, and what type of transactions are made.

Quickly issue loans as well as check on loan status:

lending software dashboard

Now that you have an idea about Jisort why don’t you sign up? Manage all these at an easy comfort, besides getting many other benefits from Jisort.

Wrapping up

After learning how to start a lending business in Canada, go ahead and sign up for Jisort here.

Keep in mind the time to start a lending business is now, and money will never be enough so don’t let your idea die.

So long as you make good market research and analyze all aspects and requirements you are ready to run the business. 

Besides,  risks come with rewards, always have a plan backed up with strategies. Best of luck as you venture into this business.

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