Are you about starting a loan officer service company? If YES, here is a complete sample loan officer business plan template & feasibility report you can use for FREE.
If you live in the United States of America, you will agree that loads of entrepreneurs are making money from offering loan services. Starting a loan broker business can be demanding and risky at the same time, but if you have done your due diligence before venturing into the business, you are likely not going to run at a loss.
First and foremost, you are expected to have experience in the financial industry. It will pay you to study accountancy or banking and finance if you want to venture into this line of business. Below is a sample loan broker services firm business plan template that will help you successfully launch your own business.
A Sample Loan Officer Business Plan Template
Table of Content
- 1. Industry Overview
- 2. Executive Summary
- 3. Our Products and Services
- 4. Our Mission and Vision Statement
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 8. Our Target Market
- Our Competitive Advantage
- 9. SALES AND MARKETING STRATEGY
- 10. Sales Forecast
- 11. Publicity and Advertising Strategy
- 12. Our Pricing Strategy
- 13. Startup Expenditure (Budget)
- 14. Sustainability and Expansion Strategy
1. Industry Overview
Loan officers are part of the Loan Brokers industry and this industry is composed of establishments that arrange loans, especially mortgages, by bringing borrowers and lenders together on a commission or fee basis. The industry has loads of small business operators servicing a wide range of clients.
A quick of happenings in the industry revealed that the industry has fared well over the past five years as consumer confidence levels have risen. Favorable economic conditions and low interest rates have fueled consumer spending over the past five years with purchases of homes and cars increasing demand for mortgages and auto loans. As household spending on big-ticket items increases, demand for loans is also slated to increase.
As a result, industry revenue is projected to grow. The next five years are expected to be positive for the Loan Brokers industry as the general economy is expected to grow, albeit at a slower pace. However, the industry is expected to face several headwinds.
Over the next five years, interest rates are expected to increase, and, as a result, mortgages will become less attractive to consumers. The nature of the Loan Brokers industry gives room for it to perform well during recession. This is because, as consumers struggle during difficult economic times, they use industry services to access loans.
Though, as the economy continues to recover and consumers start to fatten their wallets, there is a likelihood that the demand for industry services will decline. Moreover, industry regulations have been increasing, hampering revenue growth and profit margins for firms in the Loan Brokers industry.
Statistics has it that in the united states of America alone, there are about 11,029 registered and licensed loan firms scattered all across the United States responsible for employing about 50,224 people and the industry rakes in a whooping sum of $12 billion annually.
The industry is projected to enjoy 5.8 percent annual growth within 2013 and 2018. Please note that this industry is open for fair competitions since no single establishment can boast of having a lion share of the available market.
A recent report released by IBISWORLD shows that the Loan Brokers industry operates with a low level of market share concentration; the top four companies are estimated to account for less than 6.0 percent of total industry revenue in 2018.
The industry is highly fragmented, with an estimated 11,130 enterprises in 2018. Big banks are increasingly excluding brokers from the mortgage origination process; and these trends are placing increased pressure on industry operators to consolidate. Larger brokerages can dominate local markets by attracting successful brokers who will benefit from shared marketing costs and larger client lists.
One thing is certain about starting a loan officer services business, if you are able to conduct your market research and feasibility studies, you are more likely not going to struggle to secure clients because there are always clients all across the United States who would need your services from time to time.
2. Executive Summary
Larry Pearson® Loan Broker Services, LLC is a licensed loan broker that will be based in First Avenue, Cherry Creek – Denver. The company will handle all aspects of loan services such as residential mortgages, commercial and industrial mortgages, home equity loans, vehicle loans, loans to governments, brokering and dealing products.
Larry Pearson® Loan Broker Services, LLC is a client – focused and result driven loan services firm that provides broad – based services at an affordable fee. We will offer a standard and professional services to all to our clients.
At Larry Pearson® Loan Broker Services, LLC, our client’s best interest would always come first, and everything we do is guided by our values and professional ethics. We will ensure that we hire professionals who are experienced in the loan industry.
Larry Pearson® Loan Broker Services, LLC will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Our plan is to position the business to become one of the leading brands in the loan brokers industry in the whole of Denver, and also to be amongst the top 20 loan broker firms in the United States of America within the first 10 years of operation.
This might look too tall a dream but we are optimistic that this will surely be realized because we have done our research and feasibility studies and we are that First Avenue, Cherry Creek – Denver is the right place to launch our business.
Larry Pearson® Loan Broker Services, LLC is founded by Larry Pearson. He is a graduate of Business Administration from the University of Nebraska-Lincoln; and got an MBA in Economics from Columbia Business School. Running business is a family trait Pearson inherited from his father, a stockbroker and successful businessman.
3. Our Products and Services
Larry Pearson® Loan Broker Services, LLC is going to offer varieties of services within the scope of the industry in the United States of America. Our intention of starting our loan brokers services firm is to work with clients to handle their financial needs as it relates to the services we offer.
Our business offerings are listed below;
- Brokering residential mortgages
- Brokering commercial and industrial mortgages
- Brokering home equity loans
- Brokering equipment financing arrangements
- Brokering vehicle loans
4. Our Mission and Vision Statement
- Our vision is to build a loan broke firm that will become the number one choice for both individual and corporate clients in and around Denver. Our vision reflects our values: integrity, service, excellence and teamwork.
- Our mission is to provide professional, reliable and trusted loan broker services to our clients. We will position the business to become one of the leading brands in the whole of Denver, and also to be amongst the top 20 loan broker firms in the United States of America within the first 10 years of operation.
Our Business Structure
Typically, we would have settled for two or three staff members, but as part of our plan to build a standard loan broker firm in First Avenue, Cherry Creek – Denver, we have perfected plans to get it right from the beginning which is why we are going the extra mile to ensure that we have competent, honest and hardworking employees to occupy all the available positions in our firm.
We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target.
In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Executive Officer
- Loan Officers/Consultants
- Admin and HR Manager
- Marketing and Sales Executive
- Customer Care Executive/Front Desk Officer
5. Job Roles and Responsibilities
Chief Executive Office:
- Grows management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- In control of fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Assesses the success of the organization
- Accountable for brokering residential mortgages
- In charge of brokering commercial and industrial mortgages
- Responsible brokering home equity loans
- Responsible brokering equipment financing arrangements
- In authority of brokering vehicle loans
- Responsible for providing financial advice to individuals and small businesses
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Defines job positions for recruitment and managing interviewing process
- Carries out induction of new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities.
Marketing and Sales Executive
- Identifies, prioritize, and reach out to new partners, and business opportunities et al
- Writing winning proposal documents, negotiate fees and rates in line with company policy
- Develops, executes and evaluates new plans for expanding increase sales
- Documents all customer contact and information
- Represents the firm in strategic meetings
- Helps to increase sales and growth for the firm
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- creates reports from the information concerning the financial transactions recorded by the bookkeeper
- Prepares the income statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper.
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the firm
- Serves as internal auditor for the firm
Client Service Executive/Front Desk Officer
- Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s services
- Manages administrative duties assigned by the manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
- Receives parcels/documents for the company
- Distribute mails in the organization
6. SWOT Analysis
Larry Pearson® Loan Broker Services, LLC engaged the services of a core professional in the area of business consulting and structuring to assist the firm in building a well – structured loan broker services firm that can favorably compete in the highly competitive industry.
Part of what the team of business consultant did was to work with the management of our organization in conducting a SWOT analysis for Larry Pearson® Loan Broker Services, LLC. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Larry Pearson® Loan Broker Services, LLC;
Our core strength lies in the power of our team; our workforce. We have a team that are trained and equipped to pay attention to details and to deliver excellent jobs. We know we will attract loads of clients from the first day we open our door for business.
As a new loan broker, it might take some time for our organization to break into the market and gain acceptance especially from corporate clients in the already saturated industry; that is perhaps our major weakness. So also, we may not have the required cash to give our business the kind of publicity we would have loved to.
The opportunities in the loan brokers industry is massive considering the number of individuals who will always need extra bucks to meet up with their monthly expenditures and even corporate organizations. As a standard and well – positioned loan broker services firm in First Avenue, Cherry Creek – Denver, we are ready to take advantage of any opportunity that comes our way.
Some of the threats that we are likely going to face as a loan brokers services firm operating in the United States are unfavorable government policies, the arrival of a competitor within our location of operation and big banks having bypassed industry operators, citing their involvement in the subprime crisis.
Despite improvements in industry performance, profit will fall short of pre – recessionary levels and that is a major threat for our business. There is hardly anything we can do as regards these threats other than to be optimistic that things will continue to work for our good.
7. MARKET ANALYSIS
- Market Trends
If you a close watcher of the trends in the industry, you will agree that the nature of the industry gives room for it to perform well during the recession. This is because, as consumers struggle during difficult economic times, they used industry services to advance their paychecks or to get quick cash back.
Though as the economy continues to recover and consumers start to fatten their wallets, there is likelihood that the demand for the industry’s services will decline. Moreover, industry regulations have been increasing, hampering revenue growth and profit margins for firms in the industry.
Although the industry is pretty much open to startups at different levels, but it is innovation, and trusted services that usually support the growths of new players in the industry. External factors such as year conventional mortgage rate and House price index impact industry performance.
8. Our Target Market
The demographic and psychographic composition of those who need the services of loan brokers cuts across both individuals and corporate organizations especially small businesses.
Larry Pearson® Loan Broker Services, LLC will initially serve small to medium sized business, from new ventures to well established businesses and individual clients, but that does not in any way stop us from growing to be able to compete with the leading loan brokers in the United States.
Our target market cuts across businesses of different sizes and of course individual clients. We are coming into the industry with a business concept that will enable us work with the small businesses and bigger corporations in and around Denver and other cities in the United States of America. Below is a list of the businesses and organizations that we have specifically designed our products and services for;
- Business men and women
- Mom and Pop Businesses
- Corporate executives
- Entrepreneurs and Startups
Our Competitive Advantage
The level of competition in the industry depends largely on the location of the business and of course the niche of your services. If you can successfully create a unique brand identity for your firm or carve out a unique market, you are likely going to experience less competition.
For instance, if you are one of the few loan brokers in your locations whose requirements for accessing loan is simple and straight forward, you are likely going to have a competitive advantage over your competitors.
Larry Pearson® Loan Broker Services, LLC might be a new entrant, but we can comfortably comply with government regulations, we have robust relationships with lenders and we have a good reputation. So also, the owner of the business is a professional and is highly qualified in the United States. These are part of what will count as a competitive advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
9. SALES AND MARKETING STRATEGY
Our sales and marketing team will be recruited base on their vast experience in the industry and they will be trained on a regular basis so as to be equipped to meet their targets and the overall goal of the organization. We will also ensure that our excellent job deliveries speak for us in the market place; we want to build a standard business that will leverage on word of mouth advertisement from satisfied clients.
Our goal is to grow our loan brokers services firm to become one of the top 20 firms in the United States of America which is why we have mapped out strategies that will help us take advantage of the available market and grow to become a major force to reckon with not only in the First Avenue, Cherry Creek – Denver but also in other cities in the United States of America.
Larry Pearson® Loan Broker Services, LLC is set to make use of the following marketing and sales strategies to attract clients;
- Introduce our business by sending introductory letters alongside our brochure to corporate organizations, households, schools, Businesses, Non – Profit Organizations and key stake holders in First Avenue, Cherry Creek and other cities in Denver.
- Advertise our business in relevant financial and business related magazines, newspapers, TV stations, and radio station.
- List our business on yellow pages’ ads (local directories)
- Attend relevant international and local finance and business expos, seminars, and business fairs et al
- Leverage on the internet to promote our business
- Engage direct marketing approach
- Encourage word of mouth marketing from loyal and satisfied clients
- Join local chambers of commerce and industry with the aim of networking and marketing our services.
Sources of Income
Larry Pearson® Loan Broker Services, LLC is established with the aim of maximizing profits in the industry and we are going to ensure that we do all it takes to attract clients on a regular basis. Larry Pearson® Loan Broker Services, LLC will generate income by offering the following services to individuals, start – ups, NGOs and corporate organizations;
- Brokering residential mortgages
- Brokering commercial and industrial mortgages
- Brokering home equity loans
- Brokering equipment financing arrangements
- Brokering vehicle loans
- Providing financial advice to individuals and small businesses
10. Sales Forecast
We are well positioned to take on the available market in First Avenue, Cherry Creek – Denver and other key cities in the United States of America and we are quite optimistic that we will meet our set target of generating enough income from the first six months of operation and grow the business and our clientele base beyond First Avenue, Cherry Creek – Denver.
We have been able to examine the loan brokers services market space, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Larry Pearson® Loan Broker Services, LLC, it is based on the location of our business and the wide range of loan brokers services that we will be offering;
- First Fiscal Year: $250,000
- Second Fiscal Year: $450,000
- Third Fiscal Year: $950,000
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown within the period stated above and there won’t be any major competitor offering same commission rates as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
11. Publicity and Advertising Strategy
Below are the platforms we intend to leverage on to promote and advertise Larry Pearson® Loan Broker Services, LLC;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote our brand
- Distribute our fliers and handbills in target areas
Ensure that all our workers wear our branded shirts and all our vehicles are well branded with our company’s logo.
12. Our Pricing Strategy
Fixed prices and commissions for services rendered is a long – time tradition in the industry. However, for some types of loan brokers services, flat fees make more sense because they allow clients to better predict service charge. As a result of this, Larry Pearson® Loan Broker Services, LLC will charge our clients a flat fee and interest as the case may be for many basic services.
We are aware that there are some clients that would need regular access to loan brokers services, we will offer flat rate for such services that will be tailored to take care of such clients’ needs.
- Payment Options
The payment policy adopted by Larry Pearson® Loan Broker Services, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Larry Pearson® Loan Broker Services, LLC will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards / Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
13. Startup Expenditure (Budget)
Starting a loan brokers services firm can be cost effective because on the average, you are not expected to acquire expensive machines and equipment. You should only be concerned about the amount needed to secure a standard office facility in a good business district, the amount needed to equip the office, purchase the required software applications, pay bills, promote the business and obtain the appropriate business license and certifications.
This is the financial projection and costing for starting Larry Pearson® Loan Broker Services, LLC;
- The total fee for incorporating the business in the United States of America – $750.
- The budget for basic insurance policy covers, permits and business license – $2,500
- The Amount needed to acquire a suitable Office facility in a business district 6 months (Re – Construction of the facility inclusive) – $100,000.
- The cost for equipping the office (computers, software applications, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $5,000
- The cost for purchase of the required software applications (CRM software, Accounting and Bookkeeping software and Payroll software et al) – $10,500
- The cost of launching our official Website – $600
- Budget for paying at least three employees for 3 months plus utility bills – $10,000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
- Miscellaneous: $1,000
Going by the report from the market research and feasibility studies conducted, we will need over one hundred and fifty thousand (150,000) U.S. dollars to successfully set up a small scale but standard firm in the United States of America.
Generating Startup Capital for Larry Pearson® Loan Broker Services, LLC
No matter how fantastic your business idea might be, if you don’t have the required money to finance the business, the business might not become a reality.
Larry Pearson® Loan Broker Services, LLC is owned and managed by Larry Pearson. He is the sole financier of the firm, but may likely welcome partners later which is why he decided to restrict the sourcing of the startup capital for the business to just three major sources.
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from the bank
N.B: We have been able to generate about $50,000 (Personal savings $40,000 and soft loan from family members $10,000) and we are at the final stages of obtaining a loan facility of $100,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
14. Sustainability and Expansion Strategy
One of our major goals of starting Larry Pearson® Loan Broker Services, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to offer our loan brokering services a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Larry Pearson® Loan Broker Services, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner of our business strategy.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- Business Name Availability Check: Completed
- Business Incorporation: Completed
- Opening of Corporate Bank Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting Feasibility Studies: Completed
- Generating part of the startup capital from the founders: Completed
- Applications for loan from our Bankers: In Progress
- Securing a standard office facility in a business district in First Avenue, Cherry Creek – Denver (Renovation inclusive): Completed
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: Completed
- Recruitment of employees: In Progress
- Purchase of the needed software applications, furniture, office equipment, electronic appliances and facility facelift: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business (Business PR): In Progress
- Health and Safety and Fire Safety Arrangement: In Progress
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