Micro-loan program launches to help Angelenos facing eviction

The Argonaut
by Stella Karron | Sep. 2, 2022

According to Adam Miller, founder of 1P.org, 60% of the unhoused population in Los Angeles become unhoused due to a financial shock. 

“There was one thing that happened, they lost their job, or got into a car accident, somebody got sick and needed treatment in a hospital,” Miller said.

In each one of these cases, “something happened to a family member and they were living paycheck to paycheck.” To combat this, his company created the Short-Term Eviction Prevention Fund, or STEP Fund. 

The STEP Fund’s goal is to prevent one financial shock from causing an entire family to become unhoused by providing interest-free loans to residents in LA County who are facing a high possibility of becoming homeless in the next 30 days. 

These loans are “no interest, no fee loans between $500 and $2,500,” Miller said. “The most the monthly payment could be is $70 and they have three years to pay it back.” 

Through an app on their phone, users are able to pay these loans in cash at local stores such as 7-Eleven and CVS. The STEP Fund is an output of 1P.org, a company dedicated to “real-world issues that are affecting all people at the local, state, national, and global level.” It tackles the issue of homelessness at the local level. 

As Miller pointed out, in LA “there has been no real concern and effort to prevent homelessness, it's more focused on the aftermath. So the idea of the STEP Fund is to prevent homelessness in the first place by using microfinance techniques.” 

These microfinance techniques come in the form of small loans to prevent short-term eviction. The goal of these loans is to quickly and efficiently prevent homelessness without sending people into immense debt. 

Miller explained that while there are other loan programs out there, the difference with the STEP Fund is the ability to go from an initial application to a loan “very quickly.” Government programs “require a lot of paperwork, a lot of documentation, which some people don't have, and it requires a lot of time to be screened and go back and forth with the government.”

“Most of these people are imminently facing eviction, so if it takes even three or four weeks, that's too late,” Miller said. “We're able to turn around typically in a couple or three days and give people answers quickly, and the money will go directly to either the landlord or a utility company.” 

The STEP Fund is a study funded by the Wilson Sheehan Lab for Economic Opportunities (LEO) at The University of Notre Dame. Through this study, researchers will be able to analyze how the STEP Fund loans impact the community applying for them. 

“It's a full study with a control group,” Miller said. “The purpose of the control group effectively is to show that people who get [these loans] stay housed and people who don't get it become homeless.” 

By building the STEP Fund as a research study, “nobody has to take our word for it, the research backs it up,” Miller said. “If you prove it's effective, then you can make it a large-scale enterprise and scale it up with third party or government funding.” 

The goal for the project is to give out around 1,000 loans. This next phase comes after a pilot program that effectively gave loans to 40 applicants. The long-term goal of the STEP Fund is to use the research from this study to implement the project on a much larger scale, and eventually in other cities as well. 

The STEP Fund is a nonprofit organization based in LA that provides loans for low-income residents facing a risk of eviction. For more information, visit the website.