Sometimes it takes the worst of times to bring out the best in people. That’s what serial entrepreneur Rodney Williams is counting on. The co-founder of the peer-to-peer lending platform SoLo Funds is on a mission to help the millions of Americans that live paycheck to paycheck and can’t survive the money crunch caused by the coronavirus pandemic.
The co-founder of LISNR, a company that makes audio wireless technology that disrupted the data communications market, now wants to reinvent the peer-to-peer lending market in the U.S. He understands the plight of people who fall on financial hard times. Born to an immigrant family of limited means, he grew up in Baltimore and attained success at a young age after getting three college degrees by age 24.
“We now are facing the greatest financial emergency the nation has ever faced in recent history,” says SoLo Funds co-founder and CEO Travis Holoway. “Thirty-four percent of Americans have zero dollars in savings. A few weeks ago people began to realize they may have only one or two paychecks left. Many have been furloughed and cannot go back to work.”
The economic decline in the U.S. keeps picking up momentum with no end in sight. About 10 million Americans filed for unemployment in the past three weeks, and their ranks keep growing. The government’s federal stimulus program, which provides one-time payments of $1,200 to individuals and $2,400 to couples, provided they meet specific qualifications, is a welcome relief but not enough. The payments are targeted at individuals who earn up to $75,000 and couples with income up to $150,000. Eligible dependents could get $500. Meanwhile, $1,200 won’t cover monthly rents in many parts of the country.
Recognizing the urgent need facing families across America, Williams and his partner are relaunching their two-year-old online lending platform with a new model for peer-to-peer lending. It will provide microloans of between $50 and $1,000, with terms set by the borrower. There is no interest charged for the loans on the platform. Borrowers set their own terms, select the repayment date, how much they need, the reason they need it and what they would like to tip the individual lender. Tips are capped at 10%.
“We didn’t build the platform knowing the coronavirus pandemic would happen, but now that this has happened, this is an option for an alternative form of financing,” Williams notes. “SoLo Funds is poised to enable $10 million in loans during this critical time.”