WALL STREET – Fynanz Inc., a provider of a private student loan program for credit unions called cuStudentLoans.org, yesterday said it has raised $6.5 million in new funding from a group of venture capital funds.
The new investors include: Draper Fisher Jurvetson, of Menlo Park, Calif., DFJ Gotham Ventures, of New York, The Brazos Group, Waco, Texas, Zelkova Ventures, N.Y. and JBR Media Ventures, Chevy Chase, Md.
Fynanz will use the funds for the continued national expansion of its start-up private student loan program for credit unions and the development of additional lending programs, including financial literacy initiatives.
The financing follows a previous investment led by DFJ Gotham Ventures that also included Brazos and Zelkova.
The credit union loan program prices loans based on several factors, including the FICO credit scores of the signer and co-signer. It also looks at the member’s probability of graduation by examining the student’s major, years of study and grade-point average, as well as the repayment history of fellow students at the borrower’s school.
The cuStudentLoans network works as a cooperative student lending program with participating credit unions, pooling funds and spreading risk. Each credit union typically owns 10% of the loans it distributes. Currently 21 credit unions in New Jersey, Pennsylvania, New York and now Minnesota participate in the network, providing loans for students in 479 schools in 47 states.
