America works with workers in concert. According to Fortunly, more than a third of American workers (36%) participate in the odd-job economy, whether through their primary or secondary job. That number includes about 59 million Americans. It’s not just multiple job holders; for 29% of American workers, their main job is actually another way of working.
Many concert workers are self-employed such as designers, artists and writers. But a large number are the backbone of delivery apps like Uber, Lyft, DoorDash, and Instacart, some of which use these services to supplement income from other employment, but many derive their sole income from them. Without a regular paycheck, these workers find it difficult to obtain loans from traditional banks.
LID is here to change that. Founded by Kobina Ansah in 2019, COVERR provides financial support specifically aimed at concert workers and especially delivery application drivers. “With more and more workers becoming independent contractors, it is increasingly important to have financial solutions tailored to their needs. We know that traditional business lenders create significant barriers to obtaining business financing for some qualifying independent contractors. Our mission is to reduce or eliminate these challenges, ”says Ansah.
The company does not offer loans. Instead, COVER provides a business cash advance based on future profits. There is no interest and there is no origination fee. They charge a minimal one-time service fee and provide personalized payment forecast schedules for each customer.
“People (concert workers) are willing to pay a premium for flexibility, or flexibility is one of the biggest criteria. But they have liquidity issues and there is some alternative data that we might be able to assess. I started with a thousand dollars of my own money and gave it to 10 drivers who worked around the building where I worked. I waited to see if anyone would come back. Fortunately, they did. And so this is the Genesis of COVER, says Ansah.
Funding is typically between $ 200 and $ 400, which no bank could afford to treat like a loan. According to Ansah, these amounts can make all the difference for drivers facing an emergency or having to pay bills during a slack period. In addition, COVERR plans to provide its customers with data in a dashboard that will help them better understand their work as a business, see how they can be more efficient at driving, or compare their data to pilots. comparables as a business finance app. .
The company recently announced the ability to serve clients nationwide through a $ 1 million credit facility provided by a consortium of high net worth individuals who believe in COVERRS ‘mission. “Over the next year, we will be able to support over $ 1 million in funding for these deserving workers and help propel their efforts,” said Ansah.
Ansah was born in Canada, raised in a family in Ghana, West Africa. “I am an immigrant living in the United States. I was like the Ghanaian person in America, I was the Canadian, the Ghanaian person. I am an American person. That’s why I probably have an affinity for underserved or neglected communities, ”says Ansah.
Ansah graduated from Cornell and received her MBA from Wharton. He worked for Wells Fargo as a high net worth relationship manager after graduating from Cornell. “My mandate at Wells was to review transactions over $ 20 million or more. And so any chord lower than the one I wasn’t even allowed to watch. And unfortunately, on several occasions, the people who came to the table with projects that were under that ceiling often looked more like me and came from more diverse backgrounds. And so when I finally decided to leave Wells, I wanted to get into entrepreneurship and focus on serving this underserved market, ”says Ansah.
He left Wells Fargo to co-found ModernLen, an online lender using machine learning to underwrite and lend to creditworthy borrowers who did not have a full FICO history in 2015. It was one of the first credit cards. of rewards for international students who did not We have a credit history in the United States and we are effectively unable to obtain traditional financing from banks. “We’ve had this run in many schools across the country, including Penn, Harvard, Yale and others, worked really well. But on this trip, I learned one of my biggest lessons, which is that you need to be diligent with your partners, ”says Ansah. He was working with a bank that had a national charter. He was grateful to have a bank that would work with them and not look at their balance sheet. When the bank went bankrupt, so did the company.
“I learned this very important lesson, but still had a passion to serve underserved communities. And upon closing this project, one of my investors, who happens to be one of the biggest providers of auto finance for Uber drivers in Mexico City, said, “Hmm, could this product potentially work? in the United States and New York in particular? Ansah said. He spent a year testing several ideas he had in the financial services industry, looking for a sore point strong enough that he could resolve. He then founded COVERR in 2019.
As for the future? Ansah says, “We are very happy to finally have the ability to serve operators across the country. We look forward to learning more about the different needs they have and being there to support them. Currently, we are focusing on the mobility space or really carpooling and the food delivery space. Then, as we continue to grow and better understand the types of clients we can serve, we seek to expand into other categories within the general US concert economy.