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Sunday 01 December 2019

Hastee secures £208m investment

HasteeHastee, where my old friend, colleague and ex-CEO of Cap Gemini Geoff Unwin is Chairman, has secured £208m of investment led by Umbra Capital Partners supported by IDC Ventures. It is made up of £8m funding and a £200m credit line to roll out its Loans to Employees service more widely.

I guess most HotViews readers are paid monthly. For some waiting a whole month to get paid for work you have already done is a long time - causing all kinds of cash flow issues. Basically Hastee allows you to draw down 50% of your salary as you earn it. The first £100 drawdown is interest free - then it’s a 2.5% transaction charge on further withdrawals. The loan is repaid directly by the employer at the end of month. Mitchell & Butlers, Avery Care Homes and London City Airport are amongst early clients. Clearly a no cost benefit for the employer whose cashflow is unaffected.

I do have some issues with the concept. The 2.5% fee on amounts over £100 is a not insignificant annual interest rate for a few weeks - particularly if the employee has to resort to using this facility month-after-month. But it is certainly better and cheaper than turning to a loan shark. It is much more difficult to get into a spiral of debt with Hastee as the loan is automatically repaid each month. But maybe a better solution would be for workers to have the right to get paid weekly or fortnightly if they so wished. I seem to remember I was offered that when I started work in London in 1966 at the age of 18. I don’t think I could have survived in those early months without it.

Maybe the better employers using Hastee will pay the transaction charges on behalf of their employees? Now that really would make this a benefit all round. Also this seems like a natural addon for traditional payroll services providers.

Footnote - Hastee is not alone in providing this kind of service. HotViews readers should also read:

- Backers advance £40m to salary advance fintech Wagestream

- Lyft and Uber both offer drivers the option to draw down pay by Debit Card when what they are owed hits a minimum figure.

- Instand Financial offers a free to use Visa-backed payment card. See Tradional payroll services companies take note!

Posted by: Richard Holway

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