Skip to main content
  • Foundation
  • Executive network
  • CEO Circle
  • Enterprise Solutions
  • Linkage Logo
  • Store
  • Sign In
  • Account
    • My Account
    • Logout
    • Global
    • India
    • MENA
SHRM
About
Book a Speaker
Join Today
Renew
Rejoin Now
Renew
  • Membership
  • Certification
    Certification

    Smiling asian student studying in library with laptop books doing online research for coursework, making notes for essay homework assignment, online education e-learning concept
    Get Certified!

    Be recognized as an HR leader with your SHRM-CP or SHRM-SCP credential.

    • How to Get Certified

      Demonstrate your ability to apply HR principles to real-life situations. No other HR certification compares.

      • How to Get Certified
      • Eligibility Criteria
      • Exam Details and Fees
      • SHRM-CP
      • SHRM-SCP
      • Which Certification is Best for Me
      • Certification FAQs
    • Prepare for the Exam

      Give yourself the best chance to pass your SHRM certification exam.

      • Exam Preparation
      • SHRM BASK
      • SHRM Learning System
      • Instructor-Led Learning
      • Self-Study
      • Study Aids & Add-ons
    • Recertification

      Recertify your SHRM Credentials before your end date!

      • Specialty Credentials
      • Qualifications
  • Topics & Tools
    Topics & Tools

    Stay up to date with workplace news and leverage our vast library of resources to streamline day-to-day HR tasks.

    The white house in washington, dc.
    Executive Order Impact Zone

    Do not abandon, but evaluate and evolve. It is about legal, equal opportunity for all.

    • News & Trends

      Follow breaking news and emerging workplace trends.

      Legal & Compliance

      Stay informed on workplace legal updates and their impacts.

      From the Workplace

      Explore diverse perspectives from your peers on today's workplaces.

      Flagships

      Get curated collections of podcasts, videos, articles, and more produced by SHRM.

    • HR Topics
      • AI in the Workplace
      • Civility at Work
      • Compensation & Benefits
      • Inclusion & Diversity
      • Talent Acquisition
      • Workplace Technology
      • Workplace Violence Prevention
      SEE ALL
      SHRM Research
    • Tools & Samples

      Access member resources and tools to streamline HR tasks.

      • Forms & Checklists
      • How-To Guides
      • Interactive Tools
      • Job Descriptions
      • Policies
      • Toolkits
      SEE ALL
      Ask an Advisor
  • Events & Education
    Events & Education

    SHRM25 in San Diego, June 29 - July 2, 2025
    Join us for SHRM25 in San Diego

    Register for the World’s Largest HR Conference being held on June 29 - July 2, 2025

    • Events
      • SHRM25
      • The AI+HI Project 2025
      • INCLUSION 2025
      • Talent 2026
      • Linkage Institute 2025
      SEE ALL
      Webinars
    • Educational Programs

      Designed and delivered by HR experts to empower you with the knowledge and tools you need to drive lasting change in the workplace.

      Specialty Credentials

      Demonstrate targeted competence and enhance credibility among peers and employers.

      Qualifications

      Gain a deeper understanding and develop critical skills.

    • Team Training & Development

      Customized training programs unique to your organization’s needs.

  • Business Solutions
  • Advocacy
    Advocacy

    Make your voice heard on public policy issues impacting the workplace.

    Advocacy
    SHRM's President & CEO testifies to Congress on "The State of American Education"
    • Policy Areas
      • Workforce Development
      • Workplace Inclusion
      • Workplace Flexibility & Leave
      • Workplace Governance
      • Workplace Health Care
      • Workplace Immigration
      State Affairs

      SHRM advances policy solutions in state legislatures nationwide.

      Global Policy

      SHRM is the go-to for global HR leaders and businesses on workplace matters.

    • Advocacy Team (A-Team)

      SHRM’s A-Team is a key member benefit, giving you the tools, insights, and opportunities to shape workplace policy and drive real impact.

      Take Action

      Urge lawmakers to support policies that create lasting, positive change.

      Advocacy & Legislative Resources

      Access SHRM’s curated policy materials and content.

    • SHRM-Led Coalitions
      • Generation Cares
      • The Section 127 Coalition
      • Learn More & Partner with SHRM Government Affairs
  • Community
    Community

    Woman raising hand in group
    Find a SHRM Chapter

    Easily find a local professional or student chapter in your area.

    • Chapters

      Find local connections from over 607 chapters and state councils and create your personalized HR network.

      SHRM Connect

      Post polls, get crowdsourced answers to your questions and network with other HR professionals online.

      SHRM Northern California

      Join SHRM members in the greater San Francisco Bay area for local events and networking.

    • Membership Councils

      Learn about SHRM's five regional councils and the Membership Advisory Council (MAC).

      • Membership Advisory Council
      • Regional Councils
    • Volunteers

      Learn about volunteer opportunities with SHRM.

      • Volunteer Leader Resource Center
Close
  • Membership
  • Certification
    back
    Certification
    Smiling asian student studying in library with laptop books doing online research for coursework, making notes for essay homework assignment, online education e-learning concept
    Get Certified!

    Be recognized as an HR leader with your SHRM-CP or SHRM-SCP credential.

    • How to Get Certified

      Demonstrate your ability to apply HR principles to real-life situations. No other HR certification compares.

      • How to Get Certified
      • Eligibility Criteria
      • Exam Details and Fees
      • SHRM-CP
      • SHRM-SCP
      • Which Certification is Best for Me
      • Certification FAQs
    • Prepare for the Exam

      Give yourself the best chance to pass your SHRM certification exam.

      • Exam Preparation
      • SHRM BASK
      • SHRM Learning System
      • Instructor-Led Learning
      • Self-Study
      • Study Aids & Add-ons
    • Recertification

      Recertify your SHRM Credentials before your end date!

      • Specialty Credentials
      • Qualifications
  • Topics & Tools
    back
    Topics & Tools

    Stay up to date with workplace news and leverage our vast library of resources to streamline day-to-day HR tasks.

    The white house in washington, dc.
    Executive Order Impact Zone

    Do not abandon, but evaluate and evolve. It is about legal, equal opportunity for all.

    • News & Trends

      Follow breaking news and emerging workplace trends.

      Legal & Compliance

      Stay informed on workplace legal updates and their impacts.

      From the Workplace

      Explore diverse perspectives from your peers on today's workplaces.

      Flagships

      Get curated collections of podcasts, videos, articles, and more produced by SHRM.

    • HR Topics
      • AI in the Workplace
      • Civility at Work
      • Compensation & Benefits
      • Inclusion & Diversity
      • Talent Acquisition
      • Workplace Technology
      • Workplace Violence Prevention
      SEE ALL
      SHRM Research
    • Tools & Samples

      Access member resources and tools to streamline HR tasks.

      • Forms & Checklists
      • How-To Guides
      • Interactive Tools
      • Job Descriptions
      • Policies
      • Toolkits
      SEE ALL
      Ask an Advisor
  • Events & Education
    back
    Events & Education
    SHRM25 in San Diego, June 29 - July 2, 2025
    Join us for SHRM25 in San Diego

    Register for the World’s Largest HR Conference being held on June 29 - July 2, 2025

    • Events
      • SHRM25
      • The AI+HI Project 2025
      • INCLUSION 2025
      • Talent 2026
      • Linkage Institute 2025
      SEE ALL
      Webinars
    • Educational Programs

      Designed and delivered by HR experts to empower you with the knowledge and tools you need to drive lasting change in the workplace.

      Specialty Credentials

      Demonstrate targeted competence and enhance credibility among peers and employers.

      Qualifications

      Gain a deeper understanding and develop critical skills.

    • Team Training & Development

      Customized training programs unique to your organization’s needs.

  • Business Solutions
  • Advocacy
    back
    Advocacy

    Make your voice heard on public policy issues impacting the workplace.

    Advocacy
    SHRM's President & CEO testifies to Congress on "The State of American Education"
    • Policy Areas
      • Workforce Development
      • Workplace Inclusion
      • Workplace Flexibility & Leave
      • Workplace Governance
      • Workplace Health Care
      • Workplace Immigration
      State Affairs

      SHRM advances policy solutions in state legislatures nationwide.

      Global Policy

      SHRM is the go-to for global HR leaders and businesses on workplace matters.

    • Advocacy Team (A-Team)

      SHRM’s A-Team is a key member benefit, giving you the tools, insights, and opportunities to shape workplace policy and drive real impact.

      Take Action

      Urge lawmakers to support policies that create lasting, positive change.

      Advocacy & Legislative Resources

      Access SHRM’s curated policy materials and content.

    • SHRM-Led Coalitions
      • Generation Cares
      • The Section 127 Coalition
      • Learn More & Partner with SHRM Government Affairs
  • Community
    back
    Community
    Woman raising hand in group
    Find a SHRM Chapter

    Easily find a local professional or student chapter in your area.

    • Chapters

      Find local connections from over 607 chapters and state councils and create your personalized HR network.

      SHRM Connect

      Post polls, get crowdsourced answers to your questions and network with other HR professionals online.

      SHRM Northern California

      Join SHRM members in the greater San Francisco Bay area for local events and networking.

    • Membership Councils

      Learn about SHRM's five regional councils and the Membership Advisory Council (MAC).

      • Membership Advisory Council
      • Regional Councils
    • Volunteers

      Learn about volunteer opportunities with SHRM.

      • Volunteer Leader Resource Center
Join Today
Renew
Rejoin Now
Renew
  • Store
    • Global
    • India
    • MENA
  • About
  • Book a Speaker
  • Foundation
  • Executive network
  • CEO Circle
  • Enterprise Solutions
  • Linkage Logo
SHRM
Sign In
  • Account
    • My Account
    • Logout
Close

  1. Topics & Tools
  2. Workplace News & Trends
  3. Compensation & Benefits
  4. How Income-Advance Loans Help Financially Stressed Employees
Share
  • Linked In
  • Facebook
  • Twitter
  • Email

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus convallis sem tellus, vitae egestas felis vestibule ut.


Error message details.

Copy button
Reuse Permissions

Request permission to republish or redistribute SHRM content and materials.


Learn More
News

How Income-Advance Loans Help Financially Stressed Employees

Access to emergency loans prevents 401(k) hardship withdrawals

February 18, 2020 | Greg Goth

A person handing money to another person at a desk.


"Financial wellness" has become a catchphrase among employers that want to help employees navigate financial challenges, such as by teaching workers how to manage a household budget. But one veteran researcher of the U.S. workplace says these offerings often miss their mark.

Ellen Frank-Miller, senior scientist and adjunct professor at the Washington University of St. Louis' Social Policy Institute, thinks too much of the discussion around financially stressed workers "implies that if we could just get these people to be responsible and save money, they wouldn't have these problems." But in her view, "we're really giving employers a pass" when it comes to helping workers experiencing financial stress.

Frank-Miller and her colleagues have noted that average liquidity among low-earning households is only $855, based on data gathered through the 2016 Household Financial Survey of 16,650 U.S. adults employed full time or part time. Add a financial shock to limited resources, and the researchers discovered a cascading effect, not only on employees' financial stability but also on the stability of their employers' business operations.

When the researchers looked at the relative attractiveness of employer-provided services to employees at different income levels, they found that one offering in particular—the income-advance (IA) loan—helped employees who need assistance the most.

Built on Bridges

"Employees' financial instability and their need to access emergency loans is part of running a small to midsize business," said Ned Castle, outreach coordinator for the Rhino Foods Foundation, an affiliate of Burlington, Vt.-based Rhino Foods, owned and founded by his father Ted Castle, which provides IA loans for its approximately 150 employees.

Rhino Foods and two other Burlington area businesses—Engelberth Construction and the University of Vermont Medical Center—help employees obtain small emergency loans of up to $1,000 through a partnership with the NorthCountry Federal Credit Union. Employees repay the amounts to the credit union through automatic payroll deduction.

A local United Way program called Working Bridges helped the employers launch the loan program and sends a resource coordinator to their worksites to coach workers about loans and local resources to help with life issues, such as child care, that can affect work productivity.

Among the benefits being realized by these businesses is improved employee retention. Rhino Foods saw its annual retention rate increase to 85 percent of the workforce, up from 65 percent at the loan program's launch in 2008, which Castle attributes in large measure to IA loans.

Castle and his father established the Rhino Foods Foundation to help other businesses set up their own IA loan programs, modeled on the success of the Burlington employers.

Seven Steps

The IA loan program pioneered by the Burlington-based employers has seven simple steps:

1. An employee in need of emergency financial aid is directed to HR.

2. HR handles intake by having the employee fill out a brief online application that scans for eligibility.

3. HR notifies the credit union to enroll the employee.

4. The employee completes an online loan application for the credit union.

5. The funds are disbursed to the employee as soon as that same day.

6. HR and payroll set up loan repayment through paycheck automatic deduction.

7. After the loan is repaid, the automatic deductions continue into a savings account at the credit union unless the employee opts out.


HR at each of the participating employers serves as the facilitator between their employees and the credit union. The employers pay the credit union a small administrative fee negotiated separately by each employer.

The employers do not secure the loans per se, but because the loans are repaid through payroll deduction, it serves as a kind of de facto securing mechanism.

This short video explains the loan program at Rhino Foods, although the process is similar at the other Burlington employers.

Income Advance Guide: "The Income Advance value proposition" from Rhino Foods on Vimeo.

Easy for HR, Boon to Employees

Gina Catanzarita, HR director at Engelberth, called her firm's IA loan program low-maintenance and "a proven product." While it provides participating employees with immediate funds, it also helps prevent one of the most common wealth-killers in the workplace: early withdrawals from 401(k) accounts.

With 401(k) withdrawals, employees "would take out $3,000 even if they only really needed $1,000," she noted. When IA loans were made available to the firm's 170 employees, "We went from four or five [hardship withdrawals] a year to none, which was exactly what we wanted to see."

'We went from four or five 401(k) hardship withdrawals a year to none, which was exactly what we wanted to see.' 
— Gina Catanzarita, HR director at Engelberth

Any Engelberth employee who has been with the company for a year is eligible for the program, and once a loan account has been established, it remains open so subsequent requests can be easily processed. The interest rate paid to the credit union on the loans is around 17 percent—far less than the rates for short-term payday loans, which can climb to 400 percent—and repayment through payroll deduction keeps default rates low.

Program participants "get up to $1,000 in their account they can use that afternoon," Catanzarita said.

Since the program's inception, 50 of Engelberth's employees have taken out a combined $168,000 in loans. Some have used the program regularly over the years. Total annual employee loan amounts have fallen recently, from about $25,000 each year for 2012 through 2014 to about $4,000 last year, perhaps reflecting better financial times.

Although after the loan is repaid employees can halt the automatic deductions into their savings account at any time, only about 5 percent choose to opt out.

Delivering FInancial Wellness

Castle and Catanzarita both said this system helps employees build savings and improve their credit rating.

"There's some brilliance there in automatically converting the loan payment into a savings deposit," said Mat Despard, faculty director with the Social Policy Institute at Washington University.

The IA loan is one component of a larger financial wellness effort, Castle pointed out. Getting people to come to budgeting and financial wellness workshops can be hard until they're in the midst of an emergency, he explained, so when they apply for an IA loan, that's "the time to have training available, because people are more likely to do it."

"If you have the HR capacity to take on a new benefit, this is a no-brainer," Castle said. "People will feel the impact of this in such a deep way, making your business a place where people want to work."

Despite Improvements, Many Still Have Money Worries

U.S. employees' financial well-being has improved, but many still live paycheck to paycheck and are worried over the future state of their finances, according to a survey of 8,000 U.S. employees by consultancy Willis Towers Watson.

The 2019/2020 Global Benefits Attitudes Survey found that 43 percent of U.S. workers are now satisfied with their financial situation, an increase from 35 percent in 2017. However, the survey revealed some worrisome findings:

  • 39 percent of employees could not come up with $3,000 if an unexpected need arose within the next month.
  • 38 percent live paycheck to paycheck.
  • 32 percent have financial problems that negatively affect their lives.

"Many employees are struggling with their financial situation even as the job market and economic conditions improve," said Steve Nyce, senior economist at Willis Towers Watson.

Financial stress hampers employee productivity, engagement and health, he said. This is especially true among "struggling" employees, identified as those who live paycheck to paycheck and have difficulty controlling spending.

About one-fourth of respondents are classified as struggling, and roughly half of struggling employees reported experiencing stress, anxiety or depression over the past two years.

Shane Bartling, senior director for retirement at Willis Towers Watson, believes that, "with the right actions and insights, employers can help lower the financial risks that workers face" and that access to appropriate benefits and decision tools can ultimately improve well-being.


Greg Goth is a freelance health and technology writer based in Oakville, Conn.

Related SHRM Articles:

Helping Employees Save for the Unexpected Pays Off, SHRM Online, August 2019

6 Ways to Measure the Success of Financial Wellness Efforts, SHRM Online, January 2019

Employers Double Down on Financial Wellness, but Approaches Differ, SHRM Online, November 2019

Financial Wellness Perks Expand to Address Employee Needs, SHRM Online, June 2018

On-Demand Pay Apps Are Catching On, SHRM Online, December 2018

Benefits
Compensation
Payroll
Retirement Benefits

Artificial Intelligence in the Workplace

​An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.



Related Content

Kelly Dobbs Bunting speaks onstage at SHRM24
(opens in a new tab)
News
Why AI+HI Is Essential to Compliance

HR must always include human intelligence and oversight of AI in decision-making in hiring and firing, a legal expert said at SHRM24. She added that HR can ensure compliance by meeting the strictest AI standards, which will be in Colorado’s upcoming AI law.

(opens in a new tab)
News
A 4-Day Workweek? AI-Fueled Efficiencies Could Make It Happen

The proliferation of artificial intelligence in the workplace, and the ensuing expected increase in productivity and efficiency, could help usher in the four-day workweek, some experts predict.

(opens in a new tab)
News
How One Company Uses Digital Tools to Boost Employee Well-Being

Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees.

HR Daily Newsletter

Stay up to date with the latest HR news, trends, and expert advice each business day.

Success title

Success caption

Manage Subscriptions
  • About SHRM
  • Careers at SHRM
  • Press Room
  • Contact SHRM
  • Book a SHRM Executive Speaker
  • Advertise with Us
  • Partner with Us
  • Copyright & Permissions
  • Post a Job
  • Find an HR Job
Follow Us
  • LinkedIn
  • Facebook
  • Twitter
  • Instagram
  • YouTube
  • SHRM Newsletters
  • Ask An Advisor

© 2025 SHRM. All Rights Reserved

SHRM provides content as a service to its readers and members. It does not offer legal advice, and cannot guarantee the accuracy or suitability of its content for a particular purpose. Disclaimer


  1. Privacy Policy

  2. Terms of Use

  3. Accessibility

Join SHRM for Exclusive Access to Member Content

SHRM Members enjoy unlimited access to articles and exclusive member resources.

Already a member?
Free Article
Limit Reached

Get unlimited access to articles and member-exclusive resources.

You've reached the limit of 1 free article this month. Join to access unlimited articles and member-only resources.

Already a member?
Free Article
Exclusive Executive-Level Content

This content is for the SHRM Executive Network and Executive Content Subscription members only.

You've reached the limit of 1 free article this month. Join the Executive Network and enjoy unlimited content.

Already a member?
Free Article
Exclusive Executive-Level Content

This content is for the SHRM Executive Network and Executive Content Subscription members only.

You've reached the limit of 1 free article this month. Join and enjoy unlimited access to SHRM Executive Network Content.

Already a member?
Unlock Your Career with SHRM Membership

Please enjoy this free resource! Join SHRM for unlimited access to exclusive articles and tools.

Already a member?

Your membership is almost expired! Renew today for unlimited access to member content.

Renew now

Your membership has expired. Renew today for unlimited access to member content.

Renew Now

Your Executive Network membership is nearing its expiration. Renew now to maintain access.

Renew Now

Your membership has expired. Renew your Executive Network benefits today.

Renew Now