Program Helps Workers Build Long-Term Financial Resilience
By Ted Castle
Twelve years ago at Rhino Foods we piloted an emergency loan program (Income Advance) to provide “no questions asked” (noncredit-dependent) loans of $1,000 to our employees who were experiencing an unexpected financial hardship. With the help of our financial partner, North Country Federal Credit Union, the program has extended beyond our walls to include more than 50 Vermont-based businesses with a total of more than $5 million in loans to employees to date.
Beyond addressing immediate financial needs, Income Advance supports employees to build their credit and establish savings — not to mention the positive impacts for our business, most notably a 38% increase in employee retention. After more than a decade offering this benefit, we knew the program was effective and made good business sense, especially as a Certified B Corporation. But we never imagined it would be such a valuable tool during times of crisis like COVID-19.
Prior to the COVID-19 pandemic, 47% of Americans reported they could not afford an unexpected expense of $400 unless they borrowed money or sold assets. According to a recent poll, nearly one in five American households has lost income due to the coronavirus pandemic. Even if your employees have not suffered layoffs or reduced hours, their partners, spouses, friends, and family most certainly have.
These are uncertain times, but there are a couple things we’re sure about:
- Access to emergency funds helps your employees and your business.
- Several options are available to get this benefit up and running at your organization in under 30 days.
Below is an overview of several existing noncredit-dependent, small-dollar employee loan programs that can be up and running in less than a month. (Note: This list represents those solutions and partners we are working with; please let us know if you are aware of another solution that should be on our list!)
Partner with a Local Credit Union or Bank
(For VT, NH, NY-based employers)
If your business is located in Vermont, New Hampshire, or New York, there are several financial institutions that offer Income Advance style loan programs, including North Country Federal Credit Union and Mascoma Bank. These institutions provide loans directly to your employees — all your business needs to provide is basic employee information and support for payroll auto deduction for loan payback. In some cases, there is a modest annual fee to the business to participate in the program.
- For Vermont Employers: Contact North Country Federal Credit Union, a nonprofit, member-owned organization.
- For New England Employers: Contact Mascoma Bank, a B Corp.
Partner with a FINTECH Provider
(Available to U.S.-based employers)
If your business is not located in a state where the program is being offered by a local credit union or bank, or if your business has operations with employees in multiple states, the following FINTECH options offer these types of loans nationwide:
- HoneyBee Financial Wellness is a B Corp that provides services designed to improve the financial health and habits of working Americans. HoneyBee provides employees equal access to funds regardless of their credit, at no interest. Loan amounts start at $250, no employee is left behind, the funds are provided outside of payroll, and unlimited one-on-one financial coaching is available. HoneyBee is an employer-sponsored program providing funds at no interest because employers pay a per-employee fee for the service.
- TrueConnect is a financial wellness voluntary benefit that provides employees with safe, simple and affordable loans that does not require a credit score in the loan application process. TrueConnect’s no-credit-check program provides loans from $1,000 to $5,000 with a standard 19.99% for all borrowers while TrueConnect’s credit check program provides loans greater than $5,000 with an APR dependent on one’s credit score. With TrueConnect, employees can apply for a loan in under five minutes and receive their funds within the next business day. TrueConnect costs nothing for employers to implement.
Be a Champion for Employee Financial Stability
In 2018, we established the Rhino Foods Foundation with the mission to “spread innovative workplace practices that champion employee financial stability and make good business sense.”
We welcome the opportunity to support the business community, nonprofits, and other institutions interested in navigating the options and implementing these benefits.
Now, more than ever, employers are the lifeline their employees need to get access to affordable credit during challenging times. Income Advance is one opportunity to help your employees overcome adversity to get on a path toward greater resilience by helping them build credit and start saving for the future.
Ted Castle is owner and president of B Corp Rhino Foods.
B the Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.
Income Advance: Employee Lifeline in the Time of COVID and Beyond was originally published in B The Change on Medium, where people are continuing the conversation by highlighting and responding to this story.
