Marion County Employers May Be Eligible to Offer Employees Small Dollar Loans, Risk- Free

Every year, thousands of Tennesseans take out payday and title loans, creating cycles of debt for families already living paycheck to paycheck. According to a Federal Reserve report, “of all U.S. adults surveyed, 18% said the largest emergency expense they could handle right now using only savings was under $100. Only 14% said they could handle an expense of $100 to $499 and only 10% said they could handle an expense of $500 to $999.”

This leaves many residents of our County with few options but to go to these high-interest companies. Employers are often asked to give payroll advances, but this creates bookkeeping challenges, and its own debt cycles.

The good news is that a nonprofit located just down the road in Chattanooga is part of a national program that can help employers offer small-dollar loans at reasonable rates and no risk to the company. Chattanooga Neighborhood Enterprise partners with the Community Loan Center of Southeast Tennessee so that employers can help employees by offering an emergency small dollar loan that is payroll deducted.

“We hear from employers that this is an opportunity to offer a much-needed benefit to employees and that the facilitation process is easy,” said Michael Walker, Business Development Specialist at CNE. “Because there is no fee for the employer, our small dollar loan can meet a real need for families and help companies retain talent.”

CNE also offers free financial counseling and helps those who take loans review finances and

work toward setting up a budget and savings account.

“We want to talk about this program with Marion County employers, so even if you aren’t sure you qualify for the program, please reach out to me, I’m here to answer your questions,” Walker added.

Employer Benefits:

● No direct cost to employers, employer not responsible for the loan if the employee leaves

● Reduces employee turnover and absenteeism by building employer loyalty

● Reduces distractions to HR staff from employee debtors, bankruptcies, etc.

Employee Benefits:

● 18% interest, $20 admin fee (typical payday loans have an interest rate of more than

400%!)

● $1,000 maximum

● Employer-based model

● Online loan application and servicing

● 12-month payback term, no prepayment penalties

● Repaid through payroll deduction

● Financial Counseling offered free of charge

● No credit check, but we do report credit

To learn more or enroll in the Small Dollar Loan program, business owners or HR professionals

should contact Michael Walker by emailing mwalker@cne.org or calling 423-432-9566 or visit

https://www.clcsoutheasttn.org/

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