A 25-year-old from Essex is hoping that his new website will offer a solution for people stuck in the vicious circle of payday lending. That's when they can't afford to repay their loan on time and are forced to take out another loan to cover the spiralling interest and fees.
Daniel Hall has seen the problems that people in debt can fall into, and hopes his idea will make a difference. His solution is simple: put people with payday loan trouble – who need £100 or so to clear their debt – in touch with others who are prepared to pay for a service, such as some gardening or decorating.
"The services offered can be anything from walking someone's dogs for a month to painting someone's house," Mr Hall explains. "The service can be anything that a debtor feels they can offer."
He wants debtors and people prepared to pay others for services to sign up at his Quickmoneyalternative.com website, launched this week. "The site works in a similar way to a payday loan in that people say how much money they need and when they need it by," he says. "But the crucial difference is that the debtor offers services in exchange for the money rather than getting themselves further in to debt.
"And using the site is free so debtors can't get themselves into further debt – they can only help themselves get out of financial trouble." The site is also free to use for those looking for a handyman or someone to walk their dog, although Mr Hall offers to have a legally binding contract drawn up for £30.
"That's just to ensure that the debtor provides the service for which they have been paid, but it's not a requirement of using the site."
He hopes the site "will help people get back on their feet". He points out: "There are many people experiencing debt for the first time in their lives due to the current recession and hopefully Quickmoneyalternative can be a life-changer for them."
Mr Hall hopes to make a successful career in digital marketing and after quitting an online job to set up his own business, he currently works as a freelance pay per click advertising consultant while looking to secure financial backing.
It was while doing some work for a payday lender that he came up with the idea for his new website. "I was told that most applications are rejected because the applicant already has several payday loans outstanding. I felt that there had to be an ethical way out of debt, which I why I launched the website."
He hopes that people who pay hard-up folk for a service also benefit from it. "Those who provide funds can feel good about helping someone while getting a service at a good price."
Anyone who performs a service for someone else and receives cash for doing so, may be liable for tax. However a one-off job shouldn't cause problems.
A spokesman for HM Revenue & Customs said: "It's very difficult to be too prescriptive as there will be lots of different factors in play but in essence if some one is running a business they are legally required to register with us. However, someone is only running a business if they intend to make a profit."
The general advice is to check with your local tax office. To find out more about Mr Hall's scheme go to www.Quickmoneyalternative.com
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