Los Angeles-based peer-to-peer lending app SoLo Funds has announced that it’s raised $10 million in its initial funding round.
According to TechCrunch, the app — which was initially formed in 2018 by Rodney Williams and Travis Holoway — is set to supplant the place of predatory loans, like payday loans and high-interest rate loans. It also has a type of default insurance product that prevents the lender from defaulting on the loan in the event of an unforeseen tragedy.
However, SoLo Funds is more than just something looking to disrupt the payday loan industry. Rather, it’s a peer-based lending app, which allows lenders to make money while helping out their community — and allows borrowers to set the terms of their loan repayment to something that’s affordable for them.
“A majority of [power lenders] are college-educated and the majority of them tend to be white men. Its individuals who you might not think are going to be power lenders… They may make $100,000 to $125,000 per year,” said Holoway, to TechCrunch. “They’re looking to diversify their capital and deploy it to make returns. And they’re able to help individuals out who otherwise would not be able to pay for groceries, paying rent or taking care of their transportation expenses.”
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ACME Capital, with support from Impact America Fund, Techstars, Endeavor Catalyst, and CEAS Investments joined this round of funding for the app.