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Sometimes it takes the worst of times to bring out the best in people. That’s what serial entrepreneur Rodney Williams is tally 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 affected by the money crunch caused by the coronavirus pandemic.
The co-founder of LISNR, a company that makes audio wireless technology that interrupted 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 pecuniary 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 orders 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 own zero dollars in savings. A few weeks ago people began to realize they may have only one or two paychecks left. Diverse have been furloughed and cannot go back to work.”
The economic decline in the U.S. keeps picking up momentum with no end in wonder. About 10 million Americans filed for unemployment in the past three weeks, and their ranks keep arising. The government’s federal stimulus program, which provides one-time payments of $1,200 to individuals and $2,400 to couples, forearmed they meet specific qualifications, is welcome relief but not enough. The payments are targeted at individuals who earn up to $75,000 and combines with income up to $150,000. Eligible dependents could get $500. Meanwhile, $1,200 won’t cover monthly rents in multitudinous parts of the country.
Recognizing the urgent need facing families across America, Williams and his partner are relaunching their two-year-old online make a loan of platform with a new model for peer-to-peer lending. It will provide microloans of between $50 and $1,000, with locutions 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 requirement, the reason they need it and what they would like to tip the individual lender. Tips are capped at 10%.
“We didn’t develop intensify the platform knowing the coronavirus pandemic would happen, but now that this has happened, this is an option for an alternative means of financing,” Williams notes. “SoLo Funds is poised to enable $10 million in loans during this vital time.”
Paying it forward
Up until now, the typical loan on the platform has been $200 with an 8% tip for lenders. Borrowers procure a maximum of 30 days to repay it. Lenders have been middle-income Americans earning $75,000 to $150,000 a year.
“The lenders are not the well-heeled, but average everyday Americans who want to pay it forward and help make a social impact,” says Holoway. He notes ton are 30- to 45-year-olds.
Not surprisingly, many borrowers are single mothers who need bridge financing to pay for life essentials like commons, medicine and their utility bills, he adds.
Unemployed individuals are also a large contingent on the site, and their counts are steadily swelling in this stalled economy.
The lenders are not the wealthy, but average everyday Americans who want to pay it forward and forbear make a social impact.
Travis Holoway
co-founder and CEO of SoLo Funds
Maurice Camara, a web developer that introduces software for Wordstream, a software-as-a-service in Boston, can attest to that. Last summer, when he was temporarily between jobs, he couldn’t get a time-honoured bank loan to pay for rent, utilities and food. Nor was he able to raise money on LendingClub, a peer-to-peer lending site. All he prerequisite was $200 to make ends meet.
“My credit score was just too low at the time, and I went through hoops to try to qualify with no success rate,” he recalls. “Just by chance I stumbled on SoLo Funds on the web. After posting a request on the platform, I got the money in a couple of hours,” he recantations.
Since then, he has borrowed $1,500 at times when he needed cash. Now employed, he also has become a lender on SoLo Backs. “It’s a way for me to give back and save others like they saved me,” Camara says.
A whole new model for peer-to-peer contributing
SoLo Funds’ model turns peer-to-peer lending on its head, since most platforms charge interest rates that can be 35% or uncountable and set stringent repayment terms. In contrast, SoLo Funds has no interest rate, and borrowers put in repayment terms they go through are doable.
It has added a protection feature for lenders in case of loan defaults during these difficult financial times. “We will be the guarantor of superior loans that meet our security requirements, so the lender doesn’t assume all the risk. That means if a borrower non-performances, we give the lender back his or her money and then negotiate a repayment plan with the borrower.”
According to Williams, “the FICO honesty scoring system in the U.S. is outdated and broken and many individuals cannot get financing. SoLo Funds uses alternative materials to deem a person’s creditworthiness, such as their cash flow, social media engagement and gig work.”
Solo Funds co-founders Travis Holoway and Rodney Williams
As he legitimates, SoLo historically always has scored the risk associated with each borrower request. This score is apostrophize b supplicated the SoLo score, which assesses each transaction’s risk vs. a historical assessment. SoLo leverages cutting-edge technology to assess an single’s creditworthiness. Using a plethora of data points, cash-flow analysis and machine-learning processes, we have been able to accurately assess chance potential at a greater rate than standard credit scores.
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So far, SoLo Funds has raised $4.8 million in venture capital from Impact America, Mac Venture Wherewithal and two famous angel investors — Richelieu Dennis, co-founder of Sundial Brands, and TransferWise co-founder Taavet Hinrikus.
“The coronavirus disaster has quadrupled the size of the market for these types of loans,” according to Lesa Mitchell, managing director of TechStars in Kansas Burgh, who invested $100,000 in SoLo Funds in 2018 to help grow the business.
As she explains, social impact ideas are getting uncountable attention from venture capitalists and other types of investors, including community foundations. “This is an alternative closer to microloan payday lending that is needed at this time. I have seen how traditional payday lenders beget devastated lives and feel this is a model that no one has ever tried.”
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