“Money comes easy when you know how.” That was the first thing he tells me about what he does.
As he was telling me his story (while part-timing as an Uber driver), he tells me that money comes easy.
How did he come to that point?
He tells me:
“It’s not about the money”
What then, is it about?
What’s 5 lessons I learned from a loan shark about how he doesn’t really focus on making money, yet makes tons of it?
Quality, not quantity
He started off going around daily, on a motorcycle, making loans, collecting loans, and prospecting.
I thought that he must have an extensive client list.
But he said, he only focuses on around 20-30 clients at most, for a good amount of time.
It wasn’t about the quantity of the clients he had, it was about the quality.
If he could loan the same amount to 2 people, instead of 7, 0r 20 people, well, of course he’d pick the one with less effort and time needed.
Also, it wasn’t just the amount, but the kind of customer, the quality of the customer, as a person.
He looked for customers who kept their word, would use the money for good, for their own livelihoods, negotiated openly and fairly, and maintained communication.
Even if there were other customers who would loan more, he’d choose to give smaller loans to these higher-quality customers.
Because, as he says, “No way in hell are they going to stay small with their drive, openness, honesty, and character.”
Quality counts more than quantity.
It’s important to be aligned
The question he always tries to get to the bottom of, to get the true answer to, is this:
“Why do you want a loan?”
Because the true answer to that question, would tell him how aligned the customer is to what he wants to do.
A lot of people would want to loan, but wouldn’t answer truthfully, or their answers wouldn’t be aligned to what he was doing.
He once had a customer who wanted to loan to take a vacation (who does that?!). He loans out money to support livelihood and build businesses. I guess he didn’t give out that loan.
He also looks for alignment in the story and reasons that his prospects give him. Is it congruent, does it make sense?
Some detective work, and a lot of common sense.
If you and I want the same thing, then it wouldn’t make sense to partner up and go for it?
Helping people succeed
Most of his clients weren’t the ones in dire straits, or those who had to give up a liver or kidney for the hospitalization of a loved one.
He sought out small business owners who needed capital and cash to grow their fledgling enterprises, but were too small to be given a shot by the banks.
Sounds like a great idea, especially when majority of the businesses in the world are small businesses.
His best clients were the ones he helped to succeed. To grow from sidewalk vendors, stands on the streets, to having full-fledged stores, offices, and several branches.
And that was a big secret to his success as a loan shark. Loan to help people to succeed.
Loan to people who wanted to succeed, who had the drive, passion, and commitment to succeed, but weren’t given the opportunity elsewhere.
There is always opportunity, if you want to genuinely serve people, and help them succeed.
To the point that his clients love him so much. They invite him to parties, get together, and of course, pay him on time.
Start small, then scale
But then, he never gives out a large loan right away.
I thought that was going against what he said, that you should go for quality customers, the larger ones.
But he told me it’s not about the size. Well, not right away, at least.
All of his biggest clients started out being loaned the minimum amount first. Around 200 dollars.
Even if he knew that this new client of his was capable of so much more.
“It’s a character loan”, he said. “It’s really a test whether the partnership will go well.”
Also, it was a test whether the client would be trustworthy and honor their commitments, albeit the small size of the loan.
“I’ve had clients who were capable of more, but weren’t able to fulfill the commitments of a small loan. It just goes to show you that it’s not their capacity to pay that makes them good customers. It’s their character.”
Start small at first, then when there are signs of success, scale to grow.
Trust, but verify
It was important for him to always start out with a character loan, because the most important part of the equation is trust.
Trust the person, believe in them, but then, do your due diligence, and verify well the details and the truth of the matter.
The way he did this wasn’t just by periodic check-ups. He focused on building relationships with his clients.
“I tried to get to know them. The better I knew them, the better I got a handle on whether the relationship, and the business, would have greater potential.”
“This meant maintaining open, and constant, lines of communication. I realized that my best clients were the ones that I didn’t just care about the money, but ultimately, I cared about them as people. I came to trust them.”
But then, always verify. People will amaze you with what they will do, both for the good, and the bad.
Trust people, believe in them, hold them accountable, in the way agreed.
It’s not about the money
I really thought it was, but as with all business relationships that live long, and maybe, stand the test of time, it really isn’t about the money.
It’s about the impact, and the relationship.
As I was about to go down, he offered me to take out a loan.
“You seem like a trustworthy guy, how about starting with the minimum loan?”
I declined.
I didn’t trust myself enough.
What’s an unlikely lesson you learned recently? Please share in the comments below!
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