HeyBenny Review
Product Name: Benny
Product Description: Benny is an ESPP financing platform that helps employees of publicly traded companies maximize their Employee Stock Purchase Plan benefits.
Summary
Benny is a financial platform that helps employees of publicly traded companies maximize their Employee Stock Purchase Plan (ESPP) benefits. It advances the funds to employees with repayment plus fees due at the end of the participation period.
Pros
- 10% to 15% stock purchase discount
- Doesn’t reduce take-home pay
- One-time fixed fee
- Salary and hourly employees can participate
- No credit check
- 30-day cancellation period without fees
Cons
- For publicly traded companies only
- Not available in all 50 states
- Must repay balance and fees at the end of the term
- Investment gains and purchase discounts can be taxable
- Isn’t a risk-free investment
Benny is a financial wellness platform that helps employees of publicly traded companies maximize their Employee Stock Purchase Plan (ESPP) benefits. It does this by advancing money to employees so they can take advantage of stock at a 10% to 15% discount without worrying about payroll deductions affecting their take-home income.
At A Glance
- Enables employees to buy discounted company stock
- Advances money so your take-home pay doesn’t reduce
- 30-day free cancellation and free consultations
Who Should Use Benny
Benny has an enticing offer for employees with employee stock purchase plans who hope to buy discounted stock shares from their employer but struggle to afford the minimum investment. The app matches an employee’s ESPP paycheck contributions with a cash advance due at the end of the annual or semi-annual participation period.
It’s possible to sell the shares immediately to pay off the balance and keep any ESPP gains to improve short-term finances. While you may earn a small profit or reduce the cost basis for long-term investments, this investment strategy isn’t risk-free or fee-free.
You may consider using Benny in addition to a 401(k) match, the most common investing-related workplace benefit. It’s one of the best ways to buy employee stock, as you pay 10% to 15% less than the general public.
Benny Alternatives
ESPP loans are a unique service, meaning Benny’s only real competitor is Lendtable. However, we’ve included a couple of investing apps that make index fund and stock investing easy and affordable.
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| ESPP Financing? | Yes | No | No |
| Investment app/brokerage? | No | Yes | Yes |
| Fractional Shares? | No | Yes | Yes |
| Learn More | Learn More | Learn More |
Table of Contents
What Is Benny?
Benny lets you enjoy employee stock purchase plan (ESPP) benefits by helping you max out your contribution without impacting your take-home pay. This financing app matches the ESPP contribution that your HR deducts from each paycheck, but you must repay the balance plus fees to Benny at the end of the enrollment period.
Benny launched in 2021 after a $2 million pre-seed round to its parent company, Rooted Lending Inc. of Madison, WI. While the company is very young, it has funded over $3 million in ESPP plan financing, including over $1 million in 2024 alone. It has relationships with S&P 500 leaders, including Apple, AMD, Microsoft, and Nvidia.
While you don’t need to use a service like Benny to participate in your workplace ESPP plan, it makes accomplishing this financing goal easier. Specifically, you won’t have to reduce your 401(k) contribution rate to maximize your ESPP or feel the immediate impact of a smaller paycheck as you invest more of your income if you invest through both programs.
When you enroll, you pick the percentage to invest in your ESPP plan. The current IRS limits are up to $25,000 per year with a maximum 15% share purchase discount, although employers can have smaller limits. Many employers have two semi-annual enrollment periods giving you two opportunities to invest through Benny each calendar year.
Salary, hourly, and variable income employees of publicly traded companies with ESPP programs are eligible.
Here’s a closer look at Benny’s key features.
Free ESPP Calculator
ESPP contribution limits, discounts, and participation periods differ by company. You can enter your company’s stock ticker (i.e., AAPL, MMM, MSFT, NVDA, etc.) to view the ESPP details based on your annual income.
This calculator displays the following details:
- Potential ESPP gain
- Purchase price and savings per share (Note: Some companies offer a “lookback period” where your purchase price is the first or last trading delay, whichever is lower)
- Participation period dates
- Maximum number of times you can enroll each year
ESPP Loan
The Benny ESPP app matches your paycheck contributions into a linked bank account, so you still have the funds to save or allocate towards other financial priorities. You may deposit this money in a high-yield savings account to earn interest until it’s time to repay the loan.
Benny states that most users sell their ESPP shares once they arrive in their brokerage account to repay the advance amount and the one-time fixed fee. This selling strategy lets you enjoy immediate gains, although you forfeit any long-term upside potential.
Free Consultation
You can speak with Benny by phone or live chat to compare your investment options. After you apply, you can sync your paycheck to verify your ESPP participation. The platform offers a 30-day trial period during which you can try it out and cancel fee-free.
✨ Related: What Is an ESPP and Should I Participate in One?
Pricing
Benny’s fee structure is straightforward. An approximate 20% service fee is due with the loan repayment at the end of the ESPP participation period. Benny calculates this fee when you enroll. There are no monthly membership fees.
No fees are due if you cancel your plan during the first 30 days and return any advanced funds. The fee is prorated when canceling after the initial 30-day period but before the participation period’s end date.
Depending on how soon you sell your investments, they are subject to short-term or long-term capital gains taxes. The discount amount for acquired shares can also be tax-reportable during the purchase year.
Where Is Benny ESPP Available?
Unfortunately, another hindrance is that it’s only available in the following 16 states (as of March 2024):
- Arkansas
- Colorado
- Connecticut
- Florida
- Georgia
- Massachusetts
- New Jersey
- New York
- Oklahoma
- Oregon
- South Carolina
- Texas
- Utah
- Washington
- Wisconsin
- Wyoming
The service is gradually expanding its presence into more states.
Benny vs Alternatives
Lendtable
Lendtable is the closest Benny alternative since it offers short-term lines of credit to help you invest more into your 401(k) or ESPP. It works with more companies than Benny, and you can start by uploading a pay stub that includes your contribution amount. You repay the loan balance plus a fee based on the 401(k) match or ESPP discount percentage.
Lendtable provides more flexibility than Benny, but its fees are potentially higher. For example, you pay a $10 monthly fee plus 35% of the discounted amount. We recommend comparing the features and pricing of each platform before making a decision.
Acorns
Acorns does not offer ESPP loans. It’s a micro-investing app that lets you invest in premade portfolios of index funds using your risk tolerance. You can’t buy individual stocks but can earn cash back by shopping in-store and online at participating merchants.
You can also round up purchases and schedule recurring investments. These rewards and savings tools can make it easier to invest.
Acorns charges a flat monthly fee that includes taxable brokerage, IRA, and custodial accounts. It also offers an online banking account and a rewards debit card.
Read our Acorns app review for more.
Wealthfront
Wealthfront also doesn’t offer ESPP loans but is a highly affordable investment platform. With Wealthfront, you can access automated brokerage and retirement accounts with tax-loss harvesting to optimize investment gains. Portfolio balances over $100,000 gain access to direct indexing, which allows you to hold individual stocks with select tax benefits.
In addition to managed portfolios, you can trade over 1,500 individual stocks for as little as $1 through fractional shares. The platform offers an interest-bearing cash account with up to $8 million in FDIC insurance benefits from partner banks.
Read our Wealthfront review for more.
FAQs
Is Benny ESPP worth it?
Benny can be worthwhile if you want to take advantage of your company’s ESPP at a discount of up to 15%. However, you must ensure you can repay the balance and service fee at the end of the participation period. You should also evaluate the potential tax implications, a hidden fee that erodes your potential profit.
Is Benny ESPP legit?
Benny is a legitimate way to invest more in employee stock purchase programs, and it partners with some of the most prominent publicly traded companies. However, you must be able to repay the credit advance and platform fee at the end of the participation phase, which may require selling your discounted shares. Investors with cash reserves can enroll directly through their company to buy ESPP stock without paying a service fee.
What are Benny’s customer service options?
Live chat and free consultations are available Monday to Friday. Email support and an online knowledge library are also available.
Summary
Benny is an innovative way to buy company stock shares at a discount, a benefit that is easy to overlook as it can have a high minimum investment for employees with limited finances. While you pay a service fee and this isn’t a risk-free investment, being able to buy individual stock for a potential 15% discount is an easy way to maximize your potential investment returns.
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About Josh Patoka
After graduating in $50k with student loans in May 2008 from Virginia Military Institute with a B.A. International Studies and Political Science with a minor in Spanish (he studied abroad in Sevilla, Spain for 3 months), Josh decided to sell his soul for seven years by working in the transportation industry to get out of debt ASAP and focus on doing something else with a better work-life balance.
He is a father of three and has been writing about (almost) everything personal finance since 2015. You can also find him at his own blog Money Buffalo where he shares his personal experience of becoming debt-free (twice) and taking a 50%+ pay cut when he changed careers.
Today, Josh relishes the flexibility of being self-employed and debt-free and encourages others to pursue their dreams. Josh enjoys spending his free time reading books and spending time with his wife and three children.
Opinions expressed here are the author’s alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.
