Falling behind on your bills is an awful experience in which the constant deluge of payment reminders can make it feel like you and your financial institution are on opposing sides in a conflict. But in most cases, both sides would be far better off if you could find a way to work it out together.
SpringFour, a Chicago-based startup and certified B Corporation, is building a software platform to help facilitate that process.
“We’re really focused on directing consumers to resources that can help reduce their household expenses, increase their cash flow and make it possible to pay their bills again,” said co-founder and CEO Rochelle Nawrocki Gorey. "Ultimately, our hope is that they can also save money and become financially healthy."
Having spent her entire career working for housing and community development nonprofits, Gorey said her experience showed that low-income consumers face a wide variety of roadblocks to stay current on their payments.
At the same time, many are reluctant to talk about their struggles with friends and family, so they often don’t know about the resources available to them.
“If you think about somebody who’s behind on their mortgage, it’s not because they don’t want to pay — it’s because something has happened that is making it impossible,” said Gorey. “We help our subscribers find out what that reason is and address it by referring them to local nonprofits and government agencies that can help.”
Gorey said SpringFour’s referrals help consumers save $250 per month on average. The savings come through discounts and payment assistance for medication, food and utility bills, as well as through services like economic counseling and employment services.
For the almost half of Americans who live paycheck to paycheck, that $250 in monthly savings can make a big difference.
“One of our longtime subscribers in the mortgage servicing space saw a 38 percent improvement in loan performance for loans that received a SpringFour referral,” said Gorey.
In addition to reducing spending, SpringFour also connects consumers with tech companies that provide credit repair services, financial products like prepaid credit cards and online lending products that serve as an alternative payday lending.
“There used to be two markets: traditional banking products and predatory products,” said Gorey. “But now we’re seeing really innovative things being done to serve the underserved and underbanked populations.”
Many of SpringFour's users are financial institution call center employees who use the platform to advise customers behind on their payments. But the startup also has a white label version of the platform that gives consumers direct access to the service.
“The two work great in tandem, because some consumers aren’t ready to talk to their lender about financial challenges they’re having,” Gorey said.
To survey the landscape of resources out there, SpringFour employs a four-person team of data experts with experience from the community development and nonprofit space. Thus far, they have mapped out resources for more than 175 U.S. cities. The platform includes state and national resources as well, for consumers who live outside of those cities.
Gorey originally launched SpringFour in 2006 as a part-time project, but the decision to turn it into a full-fledged company came about a year and a half ago.
The bootstrapped startup, which graduated from 1871’s third WiSTEM cohort last month, currently has three full-time employees in addition to the part-time data team. Gorey said she expects the team to grow in 2017 as the company lines up new partnerships.
Image via Gregory Rothstein.
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