PayPal Holdings, Inc. (NASDAQ: PYPL) and startup company LendUp have secured a deal on Wednesday. LendUp has not released the details of the agreement, say reports from Reuters, but PayPal has confirmed in a statement that it has made an investment
LendUp is a service, founded in 2012, that offers online loans to consumers who have been overlooked by banks because they have been deemed too risky. By automating parts of the lending process, the tech-savvy company can provide loans to consumers and small businesses at a cheaper and faster rate. It differentiates itself from its industry by offering products to aid customers with low credit score and fluctuating incomes gain financial health.
LendUp describes its first product, LendUp Ladder, as an alternative to traditional payday loans. It carries a flat fee and allows users to borrow more if they earn points by paying back their loans on time or watching financial education videos. It also offers a credit card that does not require a security deposit.
Sasha Orloff, the chief executive of LendUp, stated that the company expects to use PayPal’s investment to expand its customer base and explore new ways to provide for consumers. "Dan Schulman has been very vocal about supporting the undeserved," Orloff said, referring to PayPal's chief executive.
Along with the PayPal agreement, LendUp has also assigned Carrie Dolan as an advisor to its board of directors. Dolan was the former chief financial officer of online lender, LendingClub, and treasurer of Charles Schwab Corp. (NYSE: SCHW).