Employers are used to staff repaying student or season ticket loans directly from their salaries, but they may not be familiar with consumer lending that allows employees to take out and repay low-interest loans in a similar way.
Co-founded by ex-Google UK managing director Dan Cobley, tech start-up SalaryFinance has already signed up several businesses to its workplace payroll borrowing platform, which allows staff to take out loans and make repayments through salary deductions, substantially reducing risks and costs compared with traditional bank lending.
Workplace borrowing resources
Through its platform that integrates into payroll systems, employees can access loans from SalaryFinance of up to one-fifth of their salary, at competitive interest rates.
Commenting on three new sign-ups – technology consultant Agilisys, online retailer AO and FTSE250-listed Saga – Cobley noted: “SalaryFinance is a ‘no-brainer’ solution for businesses that are keen to help their employees improve their financial health.”
As many as one in three employees cite money worries as a cause for negative productivity at work, so Cobley believes joining SalaryFinance can only be a good thing for both employers and their staff.
“Our platform is cost-free and incredibly straightforward for businesses to use, integrating easily into all payroll systems,” he added.
Karen Caddick, group HR director at Saga, commented: “We are committed to providing our employees with benefits that will help to make their money go further.
“We want to provide a positive work environment where our people feel valued and rewarded. SalaryFinance is an excellent way to do just that. It will help our staff to make the most of their salaries, to live well and to save for the longer term.”
The start-up says its service is designed to help those in regular work make large savings on their interest payments. For every £1 that SalaryFinance makes, it aims to save its customers £25. It also intends to stop consumers being hit with unreasonably high interest rates when borrowing through banks or credit cards.
Should an employee choose to leave their employment, their loan payments will be transferred to a direct debit and subject to a revised rate.