Can we all agree that borrowing money from friends and family is THE WORST?
Few things are more uncomfortable than staring everywhere but someone’s eyes while you sheepishly ask them to help finance your life. For both parties. Since nobody likes dishing out direct rejection, many acquaintances struggle to say “No,” even if they don’t want to front the cash. Then if all goes “well” and the loan is actually provided, people are often stuck with the suspense and nuisance of timely repayment exchanges, as the sword of debt hangs over the relationships at each unsettled encounter.
A new app called “Ledge” wants to take the awkwardness out of personal lending.
“Everybody finds themselves in the position of having to borrow money. Yet the whole process is completely broken.”
Many would likely agree that CEO Adam Neff has a point. Including the investors who just made their own little donation of $900K in seed funding.
The app is somewhat of a hybrid between Square Cash and Kickstarter. Borrowers create a campaign of sorts, specifying the amount to be borrowed (up to $5,000), the interest rate, the payment schedule and the repayment term (up to 6 months). They can then send the campaign directly to friends or post the campaign on social media. Friends can pledge to the campaign without need to actually download the app.
You can see a representative Ledge campaign here.
Like Kickstarter, the borrower won’t get the loan unless the campaign is fully funded. Unlike traditional peer-to-peer lending networks, such as Lending Club, Ledge allows borrowers to dictate the terms of interest, ensuring that they can easily pay back the loan.
Instead of dealing with manual, stumble-prone repayment procedures, Ledge integrates with Venmo to automate all payments and ensure that they happen on time.
Given the fact that Ledge doesn’t do credit checks on borrowers, it seems likely that the company will find itself in the middle of disputes between stretched borrowers and frustrated lenders. The company promises to help mediate when possible, but is not assuming responsibility for any credit reporting or formal debt collection.
For Millennials embracing Uber, Breather, and other peer-to-peer solutions, Ledge is seems like very smooth solution to a very prickly problem.
Now I just need to convince my loan-shark to download the thing.
Stephen Altrogge is a freelance writer based in Tallahassee, Florida. He writes about tech, marketing, faith, and lots of other things. He’s married to Jen and has three young girls. Every day he consumes more coffee than the entire population of Colombia. He knows more about Star Wars than any respectable man should, and he runs more than any sane man would. He once attempted to eat a 2 pound hamburger in under an hour. He failed.
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As always, another great idea when it comes to quick ways to get money moving. It might be a great way to ask your friends for help without feeling like a bum on a street corner. Some might even be more likely to help if they are approached this way opposed to face to face.
Haha that’s a pretty good analysis, I’ve asked to borrow a little money from my parents one time and it wasn’t very comfortable. It felt like begging because it wasn’t even that much money. Still, I would feel a little awkward sending this kind of thing to all my friends. Of course, I have a savage group of friends that would shit on my relentlessly for sending them this shit, but I suppose if I had some kind of business goal it may be worthwhile. I’m not really sure that 5000 would be enough to fund my business goals, but maybe? I can’t help but think of gofundme campaigns that I have seen on facebook and they are depressing. Essentially, people are forced to put this stuff up to pay for medical bills. In fact, that’s the next idea: a crowd funding to pay for medical bills.
I think this is only the beginning for crowdfunding apps and other websites that are starting to become more common out there. Great news!
Well, we are seeing more and more of them online these days, right? It is only the beginning and since money is ALWAYS a hot topic of discussion, this is an industry that is likely to keep innovating.