Emerge

What do you do when payday doesn’t come soon enough?

For  50% of American families, this is a pressing question every month.   1 in 10 Americans turned to predatory lenders last year to meet financial needs. With exorbitant interest rates and two-week repayment periods, short-term solutions lead to long-term problems, setting off a vicious cycle of debt and stress.

Jonathan Harrison founded  Emerge to offer a solution to the 40 million+  who work full time, yet have no access to affordable credit.  Emerge is sold as an employee benefit—providing low interest loans to solve urgent problems while helping workers build long-term financial security. Key innovations include an online next day loan platform, simplified repayment through payroll plus a savings feature to encourage long term stability. Workers also have access to online financial education, webinars and crisis counseling by phone.

Emerge is a scalable, sustainable model for migrating millions of underbanked workers to mainstream banking relationships. It saves workers’ hard earned dollars and repairs credit so they qualify for mainstream bank products and rebuild their financial future. 

onathan Harrison is the founding CEO of Emerge and a social entrepreneur dedicated to finding market based solutions to social problems.  Immediately prior to starting Emerge, Jonathan was the Operations Director at Rubicon National Social Innovations. 

Jonathan has a background in community development finance and was the Business Development Director at MACED (Mountain Association for Community Economic Development), where he led lending programs and was instrumental in developing a social innovation technology solution to combat predatory payday lending.

Earlier in his career, Jonathan co-founded alt.Consulting, a mission driven consulting firm and social enterprise and led the organization as Executive Director for its first five years. In addition to starting and operating entrepreneurial ventures including food coops and a non-profit bakery/apprenticeship program, he was an adjunct professor and business trainer at the Xi’an Institute of Finance and Economics in China and has traveled extensively throughout Asia.  Jonathan has an MBA from the Yale School of Management.

BUSINESS DESCRIPTION

Emerge Workplace Solutions is a social business providing workplace loans coupled with financial counseling to offer fair and responsible lending products in the workplace.  Our goal is to help the over 50 million underbanked workers in America obtain small dollar loans, build credit, save money and avoid predatory lenders.  We offer employers a turnkey benefit program and provide our lending partners with a full service online platform to originate, underwrite and close loans using our proprietary risk and repayment model while also helping lenders build profitable new customers. 

CUSTOMER PROBLEM

Over 50 million workers have no access to fairly priced credit and are forced to resort to predatory lenders charging 400%+ APR for short term payday advances. This is a $100 Billion marketplace. Mainstream lenders have no scalable and profitable alternatives to provide small dollar loans and employers are inundated with requests for payroll advances, leading to employer policies that prohibit payroll advances.

OUR SOLUTION

Emerge's 100% online loan and education platform underwrites borrowers using our  proprietary risk scoring model for next business day funding and secures loan repayment via direct deposit into a customer controlled savings account.  By facilitating workplace loans for our lending partners, Emerge provides a solution to borrowers with clear advantages including significantly lower interest rates and fees, longer loan terms, financial education, build credit and save money.

MARKET DEFINITION

47% of the U.S. population lives paycheck to paycheck.  Of these workers, over 50 million individuals are underbanked, relying on 400%+ APR products as their only vehicle for credit.  As a social business with a unwavering commitment to end borrowers and consumers, our market differentiation is our strong reputation for providing services that are uncompromised and help people in need.  Most underbanked workers are employed by the 1.3 million companies that use the top 10 payroll service providers.  These workers and employers are our target market – we'll replace the 19 million payday loans made in 2008 with fair products.

MARKET CHANNELS

A Seattle credit union and New Orleans bank are piloting Emerge with committed employers in the health care, social service, retail and hospitality sectors.  Nationally chartered financial institutions and a national payroll company are queued up for Phase II expansion.   

DISTRIBUTION STRATEGY

Marketing to employers will be conducted through direct sales by Emerge, agency relationships with credit unions and bank partners, co-branded relationships with top ten payroll service providers.  Additional channels include labor unions, Professional Employee Organizations (PEO),  national employee assistance programs (EAPs) and direct to employees via online marketing channels.     

Marketing to employees about Emerge will be conducted by HR as an employee benefit function within employers and links to the Emerge loan platform will be marketed via employer website, emails and brochures. 

REVENUE MODEL

Emerge acts as an agent to financial institutions and is paid fees on a per loan basis for turnkey origination, loan underwriting and closing services, as well as fees for lead generation on additional products. Employers also pay low per employee fees for premium financial education and loan products.

KEY COMPETITION

Payday lenders are key competitors, providing 400% APR payday loan products through more than 25,000 retail outlets, from large national chains to mom and pop shops.  Other competitors include banks offering direct deposit advance and overdraft protection products (interest rates of 120%-1200%APR).  Other competitors are online payday loan shops offering 200%+ loan products direct to consumers. 

CORE COMPETITIVE ADVANTAGE

We minimize marketing and underwriting costs and default risk through an employer-based online platform using payroll service and bank integration.  Borrowers get next day low interest loans with longer repayment terms that help them build credit and save money.  In short, we provide banks with a profitable way to make small dollar loans and provide employers with a socially responsible and risk free way to offer payroll loans and help employees build lifelong financial health.