Google Blows Up Payday Loan Industry. Lending Club Impact

Hey PaydayLoan Biz Fan,

Google update and Lending Club implodes? This means total upheaval in our industry:
From Google today:

“To enforce the policy, those seeking to market financial products through Google’s sprawling advertising network will be required to disclose the length of the loan and the annual interest rate before they will be allowed to place ads. In addition to the broad payday loan ad ban, Google will not display ads from lenders who charge annual interest rates of 36 percent or more in the United States. The same standards will apply to sites that serve as middlemen who connect distressed borrowers to those lenders.”

My immediate interpretation? 

* Google = total hypocracy! Google Ventures provided $14 million dollars to Sasha Orloff at Lendup – a payday lender – back in 2013!

* A tremendous opportunity for those of us with the creativity build-out alternative marketing channels enabling small dollar loan consumers to solve their temporary financial challenges and to tell Google and Facebook to F%%$$ off. MassRoots is doing it for cannabis. Gun sales continue to thrive via new strategies as well.

* Lead generators are toast for now. Witness T3 leads. They were experiencing bad times long before this latest Google policy change.

* Brick-n-mortar operators move up the food chain and are in “the catbird seat.” Location, signage, branding, offline marketing, mobile phone friendly websites, blogging… is more important than ever. B & M valuations headed up for this cycle. Suddenly, the guy or gal consumed with running their store(s) no longer needs to dissect Google’s PPC strategy.

This new Google initiative doesn’t mean payday loan ads will no longer appear. It simply means the 1st 4 ads at the top of Google search results will not contain sponsored ads.

Anyone with a brain knows the single-payment PDL product has been phasing out.The new mantra is “personal loan,” installment loan,” “line-of-credit…” These holier than thous will never succeeed in shutting down financial services products that millions of consumers want and need!

On another front, Lending Club imploded yesterday. Their CEO got caught with his hand in the cookie jar. What’s this mean for us? Lendup loaned out $1 Billion dollars in the 1st quarter of this year! This was off-balance sheet money. Now, Lendup, Prosper, OnDeck, Kabbage, Avant… the “FinTech’s” will have a hell of a time offloading, securitizing and enticing the “capital” to their lending platforms. Although they have a tendency to appeal to 620 and higher FICO scores, they generate leads and funnel them to PDL lead generators and direct lenders. Competition from them is on the decline; at least for the forseeable future.

One more time: DISRUPTION = OPPORTUNITY. Seize the day! Lending money to consumers and small businesses will not go away!

Will car title loans get the shaft from Big Brother Google as well? http://www.AutomobilePawn.com

Finally, I want to thank Google for making it easier for ENOVA to make money in the payday/small dollar lending space. Enova started as CashNetUSA back in the 90’s. They have a HUGE data base of borrowers that probably doubled in value after this Big Brother action by Google. I own a lot of ENOVA shares -)

Comment? jer@TrihouseConsulting.com

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Jer@TrihouseConsulting.com 702-208-6736
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