In October 2019, Dan Macklin, the newly-appointed chief executive of Salary Finance Inc., was weighing his options for the future of the business. The company’s value proposition was quite simple: partner with employers to offer employees affordable loans that were repaid through automatic payroll deductions. Taking repayments directly from salary, and collecting those repayments in one transaction from the employer, dramatically reduced costs, saving employees large amounts of interest when compared to market alternatives like credit cards or payday lenders.
Salary Finance Inc. was a subsidiary of Salary Finance Limited which was launched in the UK in 2015. By September 2018, Salary Finance Limited had partnered with over 100 UK employers and offered loans to around one million employees. It was at this point that the company decided to try and replicate this success in the United States, and opened an office in Boston, Massachusetts. By October 2019, the US business had partnered with 15 employers, offering loans to around 50,000 employees.
In October 2019, Macklin was contemplating the best way to accelerate the growth of Salary Finance Inc. to hit his 10 million employee target. He was also wrestling with whether he should stick with the core product or add new products to drive sales. This had worked well in the UK where pay advances and savings accounts had proven popular in addition to their core loan product. Salary Finance Inc. was off to a good start, but it remained uncertain how quickly Macklin could grow the business and help more Americans get out of debt.
Salary Finance Inc. was a subsidiary of Salary Finance Limited which was launched in the UK in 2015. By September 2018, Salary Finance Limited had partnered with over 100 UK employers and offered loans to around one million employees. It was at this point that the company decided to try and replicate this success in the United States, and opened an office in Boston, Massachusetts. By October 2019, the US business had partnered with 15 employers, offering loans to around 50,000 employees.
In October 2019, Macklin was contemplating the best way to accelerate the growth of Salary Finance Inc. to hit his 10 million employee target. He was also wrestling with whether he should stick with the core product or add new products to drive sales. This had worked well in the UK where pay advances and savings accounts had proven popular in addition to their core loan product. Salary Finance Inc. was off to a good start, but it remained uncertain how quickly Macklin could grow the business and help more Americans get out of debt.
Keywords: Employees; Credit; Financing and Loans; Wages; Innovation and Invention; Expansion; Growth Management; Decision Making; Financial Services Industry; United States;
Citation:
Wells, John R., and Benjamin Weinstock. "Salary Finance US." Harvard Business School Case 720-421, January 2020. View Details