Micro lending has been around for a long time, but until recently has been a ‘cottage industry’.  Micro Lending is essentially private individuals setting themselves up as a “mini bank” and providing loans in the local community; mostly to businesses.

The reason the industry has gained a noticeable amount of traction is that usually the lenders’ criterion is a lot less stringent than the banks. Essentially the industry supports an unfunded level of business that otherwise isn’t serviced as it should be. Lenders are attracted to the industry as usually they can charge significantly higher rates than the banks but they usually have the same protections in terms of recovery options as the mainstream lenders.

With deposit interest rates at an all time low, many wealthy individuals see micro lending as a way to make their capital work hard for them outside the mainstream investment vehicles.

A risk however is that many investors don’t have the credit analysis skills to make sound lending decisions.  This can lead to disaster.  By joining a franchise network, lenders can access the credit skills the franchisor has developed and they can follow proven lending protocols that otherwise would take an individual years to learn; with potentially a few ‘dents’ in their capital along the way. In addition to this, lenders can usually reap significant lifestyle benefits as the brand recognition, proven systems and consolidated marketing efforts can save a huge amount of time thus freeing up time for the lender to do other things.

One of these franchised “micro lending” networks is Fifo Capital. Their success has been enormous and they now have 68 franchisees turning over more than $150m per annum. Fifo Capital was also recognized by BRW as the 30th fastest growing company in Australia in 2013 and in the same year, Smartcompany awarded Fifo Capital the 25th fastest growing company.

Managing Director, Fifo Capital Australia, Neil McMillan says:.”

“Until recently, we offered a single product, Invoice Finance – which drove incredible results for the network,” says McMillan. “We are now taking our business to the next level with the introduction of a suite of products which will make us an all round business lender. The opportunity is huge and with our dominant position in the marketplace, product expansion will drive further success”.

“Interestingly, you don’t need finance experience – but you absolutely need the ability to communicate well, to take the time to understand the specific needs of clients, and have a natural team spirit,” says McMillan. “We are a community of focused business professionals and we find that those who work well with others in the network and with the business overall, do well on the bottom line.”

Lifestyle and low-cost operations are two other noteworthy key benefits of a franchised model model. Usually operators work from home and work hours which suit their schedule.

The startup cost of a Fifo Capital franchise is currently $49,500 & GST however with the expansion of the product range, this is about to go up. Franchisees also need to be able to access at least $200K of working capital (many people arrange a line of credit to fund this).

Are you interested in finding out more about this exciting opportunity? Contact us.