If you're looking to get into the lending business, you can do it via the peer to peer lenders www.prosper.com http://www.prosper.com/invest/how-to-invest/portfolio-plans/ The structure (traditional loans, 7%-13% returns, 36 month paper, with low Default rates) is already in place and sometime you see the Business Plans on there for traders...
This may sound bad, but in a way you dont want them to pay you, at least not on time. Lenders know that they will collect these high payments from people because MOST people at some point will miss a payment, or may not be able to pay the minimum amt. Walk into any mattress, furniture, jewelry, or any store than has high price goods, and you can get these financed. I'm sure some most of you have herd of a "same as cash" offer where you repay the loan with 0% interest over 12,24, or 36 months. This is basically a free loan as long as you can repay what you borrowed...but a free loan isn't good for the lender..how do they make money?...well because again they know that most people dont, or simply cant make the payments...after all, if they could afford it, why not just pay cash for it in the first place. It's a double edge sword, but the lenders have the edge.
Oh I agree it's interesting. I just dont see it as viable... But in most cases lenders have some securitization/collateral to repo with the threat of serious ramifications as well. (ganishments, goods that can be resold to help recover, etc...) As a lender specializing in funding for traders (Which SBA Loans and most reputable organizations wont touch) How do you plan for the default rates???
More than likely, because of the risky nature, we'd probably only lend to traders that had employment ( like neke for example ), or some other type of consistant income, where they didn't rely 100% from their trading activities. Credit checks will be done, and we could also go as far to check tax returns to see how much they made in the last few yrs, require a financial statement of their liquid net worth. The collateral could be the trading account itself. If a trader had 10k to use, and borrowed 10k from us, but at the end of the year, if he lost all 10k, we would take the other half, however that seems rather cruel. There's not really an easy way to go about it. Can anyone reading this thread, imagine this as something they'd like to have, when you were new traders? Because I see it kinda like this: 1. Either cash out your savings, and open an account for 10k or 2. Get a 10k no payment loan for 1yr and pay it off over time. Again, if they had employment, and were some-what successfull in their trading, this wouldn't seem like such a bad deal. Right now about 99.9% of people get funds from their savings or cash out a 401k or some other type of investment.