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-   -   Offering Revolving Credit Terms To Clients/customers? (http://www.smallbusinessbrief.com/forum/showthread.php?t=29881)

youngmogul 30th December 2009 02:50 PM

Offering Revolving Credit Terms To Clients/customers?
 
Hello everyone!

I have a question that I am looking to get some feedback on concerning revolving credit terms... Has anyone ever done it? Offered these terms to your customers? My vision is to offer unsecured lines of credit to my customers... well I guess you would call them "members" in an "exclusive" buying club... Much like Fingerhut, and IKEA, we would offer our own items for sale in which the credit could be used on.. to gain access to a line of credit, a prospective customer would "sign up" and pay a nominal enrollment fee if approved, followed by monthly membership costs.. They would have unlimited right to purchase any of our products up to the amount of their credit line..
Any experiences in this matter? Assuming I am liquid to the NET amount of credit available to every member, Im not able to find any information concerning the following.....

1. Membership to the 3 major credit reporting agencies.

2. Offering my members an actual "card"... though impractical because the club will be online only, Its still something I believe will help legitimize the club in the eyes of our members. Where might I find a company that will make these cards?

3. Are there companies that offer credit management services?


I personally believe my business model (though not fully disclosed here) is bulletproof for success. There will be NO time when we run the risk of a loss if/when a member defaults on their credit line. My only hurdle is the implementation of revolving credit and the management of so many accounts... Being a CB (certified bookkeeper) I can handle a handfull of accounts, but thousands? lol.. just hoping to outsource that task lol.:thumbsup2

Any and all help/feedback is appreciated!
Dustin Lyle

phanio 6th January 2010 02:15 PM

My first response is to make sure that you would not be subject to the lending laws of this country and your state. There are many laws related to truth in lending, usery, disclosures, privacy, Patriot Act, etc, etc, etc. You might need legal counsel for this.

Your questions:
1. Membership to the 3 major credit reporting agencies.

I think your best bet here would be to pick one and use that exclusively - if you want to go that route. I don't know the names off hand - but there are many organziations that you can sign up with to pull credit histories - a quick web search will help. But, with these companies - you either pay per credit pull or can buy in bulk.

2. Offering my members an actual "card"... though impractical because the club will be online only, Its still something I believe will help legitimize the club in the eyes of our members. Where might I find a company that will make these cards?

Any local printing company can produce these for you.

3. Are there companies that offer credit management services?

There are many companies that have software that you can use. I did a quick web search and found lendingapps.com. I don't know anythign about them - do your homework - but there are many programs for you to choose.

Get legal advice before you start - might save you a lot in the long run.


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