A Los Angeles-based consumer lending startup has ceased operations due to challenges in raising capital, a company spokesperson said Tuesday.
Float Inc. offered lines of credit that were meant to enable borrowers to avoid bank overdraft fees. The company provided cash of up to $1,000; customers were charged 5% of any amount they borrowed over $50. The product was only available in California and Utah, though the firm had been planning a nationwide rollout.
Float’s mobile app, which linked to borrowers’ bank accounts, was marketed as an easy way to access cash without submitting to a credit check. The company hoped to tap into the millennial generation’s frustration with overdraft fees; its website features the hashtag #FCKOVERDRAFTS.
Float, co-founded by Max Klein and Kevin Bass, announced in February that it had raised $3 million in early-stage funding.
Klein, the company’s CEO, was not immediately available for comment on Tuesday.