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Stilt is how non-US citizens can score a loan

(FINANCIAL NEWS) Many financial lenders are hesitant about loaning non-US citizens money because of the risk of payback if the applicant leaves the country. Stilt wants to help.

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Staying above water

While it’s true that a credit union can lend to individuals who are not US citizens and there are no restrictions “per se” on lending to individuals based on citizenship or immigration status, the hard reality is that many financial lenders and institutions may be hesitant. If the loan is disbursed with a five-year term, the lender will have a hard time collecting on that loan if the borrower leaves the United States after two years. Which tends to happen (not the loan, but the leaving part).

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That just makes it all the more difficult for the rest of non-US citizens who have good intentions to make good on a loan and can’t get the money they need.

How Stilt can help

Enter Stilt. Stilt can be a good way for non-US citizens to get personal loans in times of need (that can easily be used for business purposes). The people behind Stilt make good on all types of loans. But as a finance tool it may just be the ideal resource for people who came here to live out the American dream but might be struggling in their attempts to get their business off the ground.

Make no mistake: There are a lot of scams out there. Plenty of ways to prey on folks and charge interest rates so high that it eclipses the very loan itself making repayment akin to indentured servitude. Stilt does seem different.

Stilt is like a good pair of legs

Stilt is a financial technology company located in San Francisco. It was developed by individuals who have walked in the shoes of other non-US citizens in search of venture capital.

Stilt is revolutionizing the way individuals with limited or zero credit history get loans in the U.S. at lower rates than other lenders.

In short, they provide collateral free personal loans at low interest rates to responsible people. Note that Stilt can used by any individual who is 18+ years old and currently lives in the state of New York.

In your pocket

Stilt has some minimum criteria that need to be met in order to apply for a personal loan, and loans are offered on a first-come, first-serve basis (which makes me wonder if the money ever runs out). Stilt also uses a combination of statistical models and application history to determine interest rate and approve the loan. They also look at the big [application] picture as a whole, including credit reports (if applicable) and income.

By the numbers

According to the Stilt team, they are able to provide low interest rates by “Identifying high quality (low risk) borrowers and reducing default rates.” Because they ultimately consider data more than just an applicant’s credit history, Stilt is able to look at a lot more signals than a traditional bank to calculate your credit worthiness.

“There are additional savings from better and quicker underwriting, zero loan origination fees, and zero currency conversion loss (as all the transactions happen in U.S.). Because of this Stilt is able to provide lower interest rates.”

All’s well that ends well

It’s no joke that money talks. It’s hard to get your dreams from Point A to Point B if you don’t have the finances to get there. Stilt appears to be a viable option. No need to scramble to put up collateral for your loan. Fill out the application. Get an answer within 48 hours. Find the money in your checking account. Then go on to accomplish great things.

End of story!

#Stilt

Nearly three decades living and working all over the world as a radio and television broadcast journalist in the United States Air Force, Staff Writer, Gary Picariello is now retired from the military and is focused on his writing career.

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Business Finance

Personal finance steps every freelancer must take to avoid ruin

(FINANCE) The government shutdown showcased financial instability, but what do people that have no paycheck guarantee need to do to be secure?

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personal finance

In light of the recent government shutdown, there has been a lot of attention in regards to how missing paychecks impacts the average American. Most Americans don’t have a regular savings account and could not handle a $1,000 emergency, let alone miss practically a month of pay.

While things look positive for the backpay of those government workers, we all could benefit from some careful reflection about the precarious nature of our personal finances.

Particularly those of us who don’t receive a regular paycheck.

Entrepreneurs and those invested in the gig economy have volatile incomes, and literally no promise of a paycheck ever – that can impact your personal finances in a number of ways.

Variable incomes are normal for this group and can impact entrepreneurs in ways as simple as handling debt.

If this is you – here a few things to keep in mind that can help you deal with the volatility of living on a variable income and handling your personal finances.  

  • Set up an emergency fund. Start with 500 if you have too, and remember this an emergency fund for your personal expenses, not your business. If you have an emergency fund, make sure you identify what an emergency is and also be prepared to put money back when it comes out. If you have a hard time not spending money in front of you, put your money in a local bank or CU that you don’t have immediate access too.
  • Stick to a budget. when you can’t forecast your income appropriately, controlling expenses is so critical it’s the few things that are in your control.
  • Don’t mix business with personal. While you may be pouring your personal energy and time into your start up or gig, be careful about mixing expenses for two reasons: First, it messes up your budget. You need to have separate budgets for personal and business. Second, there could be tax challenges – consult a tax professional for more information. Here’s a little primer to get you started.
  • Save for retirement. There are tax benefits and come on, don’t wait till you can’t work anymore. Also, an IRA IS NOT AN EMERGENCY FUND.
  • Practice good financial behaviors. Automate bill pay. Online statements. Digital receipt tracking. The more you can automate your life, the better you are. You already have so many demands on your time, reduce that so you can spend more time doing what you love and what matters.
  • Consider diversifying your income. Either ensure you have multiple strings or a backup gig (even if it’s just uber driving); or be prepared to do temporary or contract labor during your slow seasons.

The path to entrepreneurship is rough. What we can learn from the very struggles of the federal employees and the government shutdown is that if the government can be unstable, those of you who work in the world of startups, gigs, and entrepreneurship, need to be even more on our toes. The “normal recommendation” for saving is 10% of your income, but normal may not be enough for you. Be prepared and save (more).

Disclaimer: I am neither a tax or investment professional. This is personal financial advice and I encourage you to visit a professional if you need more specific plans of action.

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Business Finance

Delivery startups skim customer tips to pay employees #wth

(FINANCE) Grocery delivery startups are flourishing, but stealing from employees isn’t a sustainable move…

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theft delivery startups

Popular grocery app Instacart has been using customers’ tips to pay its guaranteed $10/hour rate to employees, rather than using the tips as, you know, bonus money paid to workers on top of their normal pay. The way that you’d expect something called a “tip” to work.

According to the report, “Instacart confirmed that when its payment algorithm determines a driver should be paid below that guaranteed $10, the company uses the customer’s predelivery, ‘up front’ tip to cover the difference. The ‘up front’ tip is automatically set to 5% on the Instacart app; if the customer removes the tip, and the payout would be below $10, Instacart itself covers the cost.”

In this system, the customer’s tip for the deliverer subsidizes the company’s commitment to its employees. Once the change to the tipping policy was announced in workers began complaining about how it affected their earnings in 2017.

Even though the app’s customers have taken to social media to compare the policy to wage theft, the practice is actually legal. Because Instacart and other apps in the gig economy classify their workers as contractors instead of employees, they do technically still get 100 percent of the tips in their wages (even if the company doesn’t supply the same percentage of the wage they’d give the worker without the customer throwing in).

This kind of payment structure may be familiar to you if you’ve ever working in restaurants, bars, or another establishment that uses subminimum wages.

Sadly, Instacart is not the only grocery app that uses a dodgy tipping system. Shipt, DoorDash, and others have similar tipping policies. And they aren’t interested in changing them after all this week’s backlash.

If you’re concerned about making sure that you’re supporting the contractors for these grocery delivery services, some of the contracted workers have requested that you provide the tip in cash instead of tipping through the app and activating its algorithm.

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Business Finance

VCs don’t have a pipeline problem, they have a Harvard/Stanford crisis

(FINANCE) With 40% of all VCs graduating from just two schools, the diversity challenge of Silicon Valley is leaking out of The Bay.

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harvard stanford VCs

If you’ve pitched or even spoken with a venture capitalist before, odds are one of them went to Stanford or Harvard (and in some cases, they don’t let you forget it).

A new study shows out of a survey of over 1,500 VCs (venture capitalists,) a whopping 40 percent of them attended either Harvard or Stanford. We knew it was a big number, but 40% from just two schools?! Dang.

Although these programs are without a doubt impressive, this study spotlights the ever-present issue of diversity of VCs in Silicon Valley and technology in general.

As far as other stats go, still 70% of VCs are men (60% of VCs are white men), Asian representation climbed from 23% to 26% from 2016 to 2018, women jumped from 11% to 18% from 2016 to 2018, and Hispanic representation still remains at 1%.

Woof. The industry is slowly progressing, but there’s much more improvement to be made.

So why does this matter?

It’s no shocker that technology and especially VC firms struggle with both gender and ethnic diversity.

As a female founder myself, I’m not surprised that only 3% of founders receiving venture capital funding are women. Out of the dozens of VCs that I’ve met and also pitched to, I’ve only met two that are women.

However, educational diversity is a topic where we’re only beginning to skim the surface, and honestly, it’s long overdue.

In the workplace and even in the VC world, humans are just as prone to implicit and explicit biases: people want to work with people that look and think like themselves. It’s a huge part of how Silicon Valley operates.

Schools like Stanford and Harvard have relatively small alumni bases compared to other large universities in the US and around the world. (For instance, my alma mater, Texas A&M has 640,000 living alumni, and Stanford has 220,000.)

According to Richard Kerbey, an African-American VC who performed this study, believes: “Not only is our industry lacking in gender and racial balance, but we also suffer from a lack of cognitive diversity…It is not a coincidence that the amount of capital raised by minorities and women closely resembles their representation among venture capitalists. And furthermore, it is no surprise as to why the demographics of most venture-backed startups also reflects the demographics of the venture capitalists that fund these companies.”

Venture capitalists usually hire people like themselves and invest in things they usually understand. That doesn’t make them evil or bad, just limited.

Therefore, when someone tells me the lack of venture capital diversity is from a “pipeline problem,” I don’t believe them.

This is why the work of people like Arlan Hamilton at Backstage Capital and Preston L. James, II at DivInc. is so important. Once we have VCs that represent the world we live in from a variety of socioeconomic, ethnic, gender, and educational backgrounds, the better the world and Silicon Valley will be for it.

Want to see more data in the study? Check out Kerbey’s Medium Post and his dataset for some ~fun~ reading, if you’re into that sort of thing.

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