LendUp has received $50 million in new credit facility from Victory Park Capital. The payday loan firm has also recently raised $18 million in an equity financing from Google Ventures, QED, Data Collective, and other investors, according to TechCrunch.
LendUp is basically a direct lender that provides American consumers with poor or no credit with small-dollar loans as a stepping stone for building their credit. Customers can start with a $250 loan and later on be able to borrow up to $1,000 per year. What sets the company apart from its rivals is that it helps unbanked Americans secure a loan and improve their credit rating through financial education, the report explained.
The company uses big data to evaluate potential borrowers and determine if they have bad credit or have only been victimized by the system. Customers earn points if they pay on time and take courses. They will also be able to climb up the financial ladder to silver, gold, and other statuses. The higher the status, the higher the credit limit and the lower the interest rates become, the report detailed.
According to co-founder Sasha Orloff, LendUp has been experiencing fast growth and therefore needs more funding to keep up with the demands from consumers. For this year, the firm plans to expand to a new state every couple of weeks, TechCrunch reported.
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