A few years ago, Travis Holoway, who was working as a financial advisor in New York City, got into a conversation with some friends about payday loans. He couldn’t believe the terms were really as onerous as they said, so he decided to look into the matter himself. That’s when he learned that such lenders typically charge an interest rate of 400% or so, often landing customers in ever-deeper debt. Already fed up with his current focus—helping wealthy people invest their money—he decided he needed to do something about the problems faced by the 70% of Americans living paycheck to paycheck.
His answer: build a peer-to-peer landing platform and app aimed at linking up low-income borrowers seeking $50 to $1,000 loans for everyday needs–think, paying the rent–with everyday lenders. Called SoLo Funds, he left his job to run the company full-time in 2017.
“We felt this problem is very large, someone needed to focus on it—and that someone should be us,” says Holoway, who is co-founder and CEO of the Cincinnati-based company.
SoLo Funds isn’t the only startup trying to address this problem. For example, San Francisco-based Even has an app that links to consumers’ bank accounts and estimates how much money they have left for bills, helps with automatic saving and offers a way for workers to tap their earnings early if they need the money.
Read the full story at Forbes.