Credit line lender Float has raised $3m in what it’s calling an angel round from finance and tech industry veterans.
The round’s investors include Camp One Ventures, Funders Club and 500 Startups.
The Los Angeles-based company aims to provide millennials who do not have established credit histories with affordable credit.
Float claims 63% of millennials don’t own a credit card and that 45% of the generation are considered ‘thin file’ in that they lack a traditional track record with credit bureaus.
The company’s open-ended credit lines range from $50 to $1,000 and it claims the money is primarily used for income smoothing, financial emergencies or to seize an opportunity.
It charges a flat 5% transfer fee with no interest or APRs.
Float’s co-founder and CEO Max Klein said: “We believe that access to affordable credit should not be reserved just for those with a lot of credit history and prime FICO scores.
“As someone with plenty of experience dealing with overdrafts, I know the frustration first-hand felt by 40% of my peers; I was getting charged a $35 overdraft fee for buying a $5 latte.
“We built Float to help consumers avoid costly overdraft charges while empowering them to begin building credit with transparent, affordable living capital.”
Float says the funding will be used for product development, marketing and to build strategic partnerships to expand beyond California and Utah.
The company previously gained backing from Mastercard Start Path.
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