Entrepreneurship is defined in many ways, but one thing holds true for those who pursue it: you are driven to create a solution to a problem. The same can be said for Endeavor Entrepreneurs Rodney Williams and newly selected Travis Holoway. The friends of 13 years and co-founders of the online lending platform, SoLo Funds, know firsthand the needs for small dollar loans that exist for low and middle class communities in the Midwest and across the country. With their no interest, peer-to-peer lending concept, they’re making it accessible for everyone at the tap of a button.
SoLo Funds: The New Alternative to Payday Loans
For the Ohio natives, the idea for SoLo Funds was born naturally from situations both Rodney and Travis experienced right at home. Early on in their professional careers, both would receive requests for basic, small dollar loans from friends and family members, but could not find a suitable resource to send them to.
“It was never really a lot of money, it was basic necessities…the $50 for gas, $200 to get the car fixed, $100 to pay the utility bill,” Travis said. “We would have conversations amongst each other about these loans that our friends were asking us for, and ultimately we were looking for somewhere else to send people to to get these loans, and we just couldn’t find it.”
The two realized how scarce the resources were for small dollar loans and that if they weren’t the ones giving these loans, they would have to send friends and family to payday loan services that are extremely predatory and can charge 400% average interest rates. An outrageous amount when considering the small increments of money that were needed.
“Realizing that cycle in the predatory lending industry, we just did not want to send our friends and family to take those loans,” Travis said. “That was the change agent for SoLo.”
While identifying the needs of borrowers, they also noticed opportunities left on the table for potential lenders. Travis and Rodney found there were many blue collar workers and individuals with discretionary capital, particularly in the Midwest, where the two were born and raised. However, no one from major financial firms would ever call these people to manage their money because of a lack of assets to manage.
“I realized we could start to unlock capital from people like my father who worked at General Motors for 37 years, who would not be a client at Goldman Sachs, and allow them to lend it to people who needed it and make a return on it,” Travis said. “On the flip side of that, we could offer more affordable loans to the people who need it most. That was really the idea behind SoLo and why we exist.”
In 2018, SoLo Funds was born. Giving power to both the lender and the borrower, and creating a community within an industry that rarely presents itself as such.
“The difference for us compared to others in the fintech world, is that we actually empower our borrowers to create their own terms, while empowering our lenders to make direct decisions on who they employ capital to,” Rodney said. “We’re not making any decisions for anyone, but most importantly for the borrower side of the demographic, nowhere else in this country, and nowhere else from a financial perspective can a borrower go to a platform or walk into a building and say they are going to borrow $50, they are going to pay it back on the 15th of the month, they are borrowing it because they need gas money, and they are willing to pay an additional $1 or $2 for that capital.”
Another characteristic of the platform that sets it apart? Borrowers on SoLo Funds platform are not required to pay anything in addition to their loan if they do not want to.
The loans are funded everyday by strangers and people they do not know,” Rodney said. “That’s what we think has driven our extremely successful default rate, because there is this social connection between individuals.”
Creating a Path Forward by Paying It Forward
From the start, Rodney and Travis have had one overarching goal: to create a path for people to do better financially, something other companies in the industry were lacking when it came to lower-income populations and minority communities.
“We feel that financial services companies as a whole haven’t really addressed some of the concerns of the communities that we’re from, and more importantly, most of the communities that are in America,” Rodney said. “I hate the terms “underserved” or “underpaid” because that’s not the right definition. 78% of Americans live check to check. That’s not underserved. That’s a large amount of our population that isn’t necessarily financially savvy, and don’t have products or services that are designed to assist their financial needs.”
SoLo Funds is changing that, with a mission to take the best technology in the world and create products and services that increase the wealth alongside these communities in ways they’ve never seen before.
Why is the Midwest a particular target for the newly selected Endeavor company? As the breeding ground for payday loans and the home to both co-founders, it’s a no brainer.
“The Midwest is the home of payday loans. Bar none, not negotiable, not debatable. Predatory lenders have preyed on the Midwest more than anywhere else in this country,” Travis said. “I’m from Cleveland. I went to school in Cincinnati. SoLo Funds was born out of Cincinnati. We understand the issues many people in the Midwest are facing.”
Through their technology, the pair want to make sure that people in the Midwest have the ability to get access to capital that they need without paying absurd interest rates or subjecting themselves to predatory lending traps, especially in the face of a global pandemic.
“When you layer the effects of Covid-19 on top of this and how many people have been laid off, or furloughed…the necessity for this type of platform and solution is immense,” Travis said.
In the midst of Covid-19, SoLo’s model became even more valuable, as many lenders stopped lending or slowed down efforts.
“It was very hard for them to deploy capital. How do you know if someone really has a job or doesn’t have a job? These are all things that our platform was and is able to do better than a lot of our predecessors,” Rodney said.
What’s Next for SoLo Funds
What does 2021 look like for Rodney, Travis and the SoLo Funds platform? Hopefully many new milestones to back up those made in 2020, where the company grew by almost 2,000%.
“We want to accelerate and be a catalyst for some of the things that we learned in 2020. This group of people we serve can be financially savvy and financially worthy. Lenders can create a lot of value for themselves but they can do it in a way that helps people,” Rodney said.
The company is already off to a strong start in 2021, raising $10 million in their latest fund with participation from ACME Capital, Techstars, and Endeavor Catalyst.
The co-founders also see their recent selection into the Endeavor network as a major player in their continued success.
“There’s not a lot of venture capital talks in Cleveland where I grew up, and a lot of the relationships that exist for some founders who grew up in the Bay area or the east coast are inherently built into some communities that I don’t come from,” Travis said. “The approach that Endeavor has of giving a spotlight and providing resources to non-traditional founders who don’t come from certain backgrounds is incredibly valuable to someone like myself.”
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