Today, Think Finance is announcing that they've secured a $90 million credit facility from Victory Park Capital Advisors. This massive line of credit will be used to develop, expand and underwrite, Elastic, Think Finance's web-based bank account replacement product.
Elastic is currently operational as a pilot program, providing its online bankers with an Elastic debit card, line of credit, and access to bank account statements and account history. Think Finance will enhance Elastic's services with a savings feature, financial literacy tools and budgeting tools. The company plans to release these features and aggressively push Elastic in the first quarter of 2011.
Elastic's savings account feature will be tailored to train its customers to better manage finances and reward them for doing so through an Elastic scoring program. Each customer will start out with a score of 600 -- the score is designed to mimic credit scores -- and that score will go up when the customer makes a payment, sets up direct deposit, completes a financial literacy course or accomplishes other positive banking activities. The higher the score, the better, as Think Finance will issue customers with high scores rebates on finance charges, essentially depositing extra funds into a customer's account for good behavior.
Elastic's services will somewhat overlap with BankSimple's radical approach to online banking. But, CEO Ken Rees doesn't see the early stage startup as competition.
"We celebrate all of the innovators in the space that use technology for banking purposes. They [BankSimple] are more focused on the needs of prime consumers. We're focused on the underbanked and unbanked -- the estimated 60 million people who are not well served by traditional banks," says Rees.