James Rufus Koren reported in today’s Los Angeles Times that, “For the past year and a half, Doug Farry has met with city councils, chambers of commerce and corporate human resources managers, telling a hard truth: Many workers live paycheck to paycheck and sometimes turn to payday lenders to get by.
“He’s not trying to shame employers into boosting wages. Rather, he’s trying to convince them to sign up with his company, Employee Loan Solutions, a San Diego start-up that works with a Minnesota bank to offer short-term loans – ones that carry a high interest rate but are still cheaper than typical payday loans.
“Some employers already know their workers can come up short and from time to time lend cash or advance paychecks. But for others, he said, it’s something they’ve never considered.”
The LA Times article explained that, “Employee Loan’s program, called TrueConnect, enables workers at participating employers to apply online and get a loan of $1,000 to $3,000. The loans are approved or denied almost instantly and are available even to borrowers with terrible credit.
“The company, which began operations in 2013, is one of several offering lending programs as add ons to employee benefits packages.
“Other firms, such as San Francisco’s Zerio and New York’s Kashable, have different business models – at Zerio, for instance, borrowers pay no interest, but participating employers pay a fee – but they all operate on basically the same premise: Employers are uniquely positioned to help workers find more affordable credit.”
Today’s article added that, “Farry said his company is able to offer a lower interest rate and still make the product available to employees with even bad credit because of a lower cost structure.”
