Short-term, high-interest loans designed to bridge financial gaps until the next payment arrives are often sought by independent contractors, freelancers, and gig workers, typically classified as 1099 employees. These individuals often face income fluctuations and may require quick access to funds for unexpected expenses or to cover periods of low income. For example, a rideshare driver experiencing a car repair might utilize such a loan to quickly return to work.
Access to quick cash can be crucial for individuals with unpredictable income streams. Traditional lending institutions often require extensive documentation and consistent pay stubs, which can be challenging for 1099 workers to provide. This alternative borrowing method can provide a safety net during lean times, enabling these workers to maintain financial stability and cover essential expenses. Historically, access to credit for independent contractors has been more limited than for traditional employees, contributing to the demand for this type of short-term financing.
