The 2018 Innovation Fund, our annual crowdfunding competition, has officially launched! You can find all of the Innovation Fund participants here. Read on for the story of FloatMe, co-founded by 2017 Fellow, Ryan Cleary, who is raising $5,000 to support the pilot test of FloatMe, an ethical alternative to predatory lenders.
In the United States, there are more than 30,000 Payday and Title Loan storefronts. That’s more storefronts than McDonalds (14,146) and Starbucks (13,930), combined. Charging rates of 400% APR or more, they are often the only option for full-time workers in need of a short-term micro-loan after an unexpected emergency, to the tune of $46 Billion annually. We’re building FloatMe to offer a quicker and affordable alternative for employees in need.
The FloatMe Story
Right after moving 1400 miles for a new job in San Antonio, I sliced through part of my finger. With my savings nearly depleted from the move and student loans I faced a sobering decision: Do I go to an emergency room for stitches and hope my insurance covered it or hope that the bleeding eventually stops? Faced with thousands in Medical Bills if my insurance didn’t work in Texas, I opted for the latter.
54 Hours
I met my co-founders at Startup Weekend San Antonio, where we started talking about some of the financial stresses we’d gone through, despite saving and working full-time (like slicing your finger open).
We soon realized the problem was bigger than we realized: Each year, 96 million payday loans trap users in debt cycles lasting months. Most workers needed just a small amount to cover the emergency for a few weeks until their next paycheck or two came in. For them, payday loans were the only option; the few available alternatives just didn’t work.
We came up with an idea crazy enough to work: using technology to offer affordable advances to employees, reduce risks of defaults, and provide practical financial resources for the non-wealthy. At the end of those 54 hours, we emerged not only as the 1st place winners, but as a determined team ready to keep pushing forward.
Hundreds of interviews and thousands of hours of research later, we’ve built a product designed for employees.
How FloatMe Works
We work with employers to offer our app and online portal as an employee wellness platform. When employees login, they can connect their bank account info to verify their information and then can get started with our tools. When finished, the FloatMe app will offer:
- budgeting tools
- practical financial resources
- overdraft protection
- Access to short-term wage advances from their employers based on what they can afford based on Pew Research and the CFPB
We’ve realized that most workers don’t have a consistent annual pay cycle (most have 3 months each year where income drops by 33% or more)
So What’s Next?
We have an amazing team of 4 developers working with us to make FloatMe a reality, and as a result we’re preparing to pilot test a fully functioning product with a partner company in San Antonio, Texas starting this summer.By the time Fall arrives, we plan to starting rolling out our app and online portal across Texas. That’s why we launched our Indiegogo campaign, to secure the final resources we need to finish testing.
A special thanks to the individuals and businesses who have supported us from the beginning: Geekdom and their phenomenal community, David & Debra at Innocenti Jones PLLC, Samar at Shah IP Law PLLC, Stefanie and the entire team at Innov8 Place, and of course the entire VFA community in San Antonio