Great news for self employed and freelancers
In Ye Olden Days, a freelancer was a man, with a lance, who would offer his services and fight for money. Times have changed. Now freelancers are men and women who work in creative industries, trades, the gig economy, and when it comes to getting paid they have to fight for their money. Hmmm. But things really have moved on. In those olden days days there were plagues and sickness ravaging the World. Hmmm.
Something must be new. Ah yes. Fintech. So I happened to be in London last week and popped into the UKs largest and most significant fintech accelerator, correctly if rather clumsily called ‘Barclays Accelerator Powered by Techstars’. Only one word short of a Haiku.
They’ve just taken on a new cohort, but I’m saving them for another day, because two companies of the previous one just caught my Birds eye.
The first one, Trezeo, (we’re running out of words people) provide a service I’ve not seen before. They ‘level out’ freelancer wages. So rather than a freelancer being paid £500 one week, £700 the next, £300 the next, instead they receive a consistent and regular income of £500 per week. This stabilises the freelancers income and enables them to make better financial planning decisions. It might also be advantages for freelancers applying for loans, or even mortgages, by building their credit history. The aim is ultimately to provide ‘a safety net of benefits for self-employed and independent workers that move with them between different companies they might work for’. Stabilisers for the work where and when you can cycle.
So how does Trezeo itself work? In a nutshell, this: The freelancer is provided with a dedicated account. They receive all their work payments into it. The platform pays it out each week. If there’s a shortfall in funds, the platform automatically ‘lends’ the difference, so the regular amount is still paid. If there’s an overpayment into the account one week, this is held on account to cover shortfalls. If needs be, the platform allows the freelancer to go ‘over drawn’, interest free, with typical limits of £500, in the expectation of it flattening out later on. They even include a £300 per week accident insurance in the package. It all costs £3 a week, which is pretty nominal.
The other company supporting freelancers is Paid.co.uk, also in the same accelerator cohort. They take a different approach to the underlying issue of payment irregularity by offering a service of ‘factoring the invoices’. This basically means the freelancer is paid by Paid, and Paid gets paid by the company who the freelancer invoices. It’s done across the Paid platform and freelancers can use the service for invoices from £100 to £15k. Paid take 7.5% of the invoice value, and all the risk, if the client doesn’t pay the freelancer still keeps the money. Another smart way for the increasing number of self employed people to achieve and maintain a strong and stable lifestyle. To quote an unknown source.
This article first appeared in Print in the Yorkshire Post Newspaper