Social Finance, a San Francisco-based company that offers student loans, announced Tuesday that it has secured a $60 million line of credit from Morgan Stanley.
The financing will allow SoFi to fund more loans to students and recent graduates. The company says that it has received interest from potential borrowers for $250 million in loans, beyond the $90 million in loans that it has funded to date.
"This financing represents a significant milestone for SoFi," the company's chief executive officer, Mike Cagney, said in a news release. "This credit facility supports our plans for ambitious growth and allows us to have a greater impact on the student loan market."
SoFi makes many of its loans to graduates of prestigious business, law and medical schools who have well-paying jobs. It offers lower interest rates than the most expensive government student loan program, which for borrowers can make refinancing an attractive option.
Part of the company's pitch to potential borrowers is that it allows them to do professional networking with alumni of their schools. Those same alumni provide some of the funding for the company's loans.
But the company is also seeking funding from banks, as the Morgan Stanley commitment illustrates.
SoFi faces competition from CommonBond LLC, which is similarly trying to exploit inefficiencies in the federal student loan program.