LOS ANGELES, Feb. 9, 2017 /PRNewswire/ -- Obtaining credit is now more accessible and affordable for thin-file Millennials in the U.S. Float, the financial technology company that offers instant access to small dollar credit lines, launched today. The company also announced that it has raised $3M in an angel round from finance and tech industry veterans; investors that include Camp One Ventures, Funders Club; and from the 500 Startups accelerator program.
Sixty-three percent of Millennials don't own a credit card, one-third have never even applied for one, and almost 45 percent are considered 'thin file," which means they don't have a track record with the traditional credit bureaus. Millennials are not building credit like previous generations, and banks' overdrafts are designed to profit from this consumer base. According to the Consumer Financial Protection Bureau (CFPB), bank fee revenue for overdrafts totaled $17B in 2016, typically a $35 charge on an average debit transaction of $24.
"We believe that access to affordable credit should not be reserved just for those with a lot of credit history and prime FICO scores," said Max Klein, co-founder and chief executive officer, Float. "As someone with plenty of experience dealing with overdrafts, I know the frustration first-hand felt by 40 percent 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 began initial testing this past summer and experienced a robust monthly compound growth rate of 124 percent from July through November. The company is transforming the entire credit experience by empowering young consumers to prove their creditworthiness through personalized underwriting and a fast, friendly, and affordable credit alternative. Float has developed alternative, non-FICO based underwriting that can make personalized credit decisions in seconds. Unlike traditional lenders, applying for Float will not hurt your credit score, but a positive payment relationship will help build it.
Float's open-ended credit lines range from $50-$1,000 and are generally used for income smoothing, financial emergencies or to seize an opportunity. Float charges a flat five percent transfer fee and there are no hidden costs, interest or APRs.
Today's announced funding will be used for product development, marketing and to build strategic partnerships that will enable Float to expand nationally. Float currently serves consumers in California and Utah, with plans to roll out in all 50 states over the next 6 to 12 months.
For more information, please visit www.hellofloat.com.
Float is a data-driven technology company that empowers emerging credit consumers to prove their creditworthiness through personalized underwriting and a fast, friendly, and affordable credit alternative. By leveraging machine learning and transactional data, Float has developed alternative, non-FICO based underwriting that can make personalized credit decisions in seconds, and deliver micro-credit lines that can be used with existing debit cards. Applying for Float will not hurt one's credit score, but a positive payment relationship will help build it.
Based in Los Angeles, Float is reinventing the credit experience for the modern, mobile consumer. For more information, please visit www.hellofloat.com. Like Float on Facebook http://facebook.com/hellofloat. Follow Float on Twitter @HelloFloat.
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