Future Finance, the online lending platform for students in the UK and Germany, has snagged £30m in funding from the European Investment Fund (EIF). Future Finance becomes the EIF's UK lending partner of choice for distributing loans to master’s students through the Erasmus+ funding programme. The Erasmus+ programme is the biggest mover of students in the EU, encapsulating over 300,000 higher education students.
The £30m agreement will support students moving outside of the UK to undertake a master’s degree in one of the 32 other Erasmus+ countries, as well as supporting students from these countries who are looking to study in the UK.
Thanks to the EIF guarantee, Future Finance will supply loans at favourable conditions, without requiring any collateral or third party guarantee. The deal is the first of its kind in the UK and the fourth to have been signed under the Erasmus+ loan guarantee scheme, which is funded by the European Union and managed by the EIF. To be clear, the Erasmus+ loan guarantee scheme is part of the broader Erasmus+ programme.
The guarantee scheme allows the EIF to provide capped guarantees and counter-guarantees to financial intermediaries – like Future Finance – which are in the business of lending to students who will undertake a master's degree in another country.
“I am pleased to be signing this Erasmus+ Master Student Loan Guarantee today,” said EIF Chief Executive, Pier Luigi Gilibert. “The initiative aims to bridge the existing financing gap students are faced with when deciding on pursuing a master’s degree in another country. This signature will help to increase the mobility of students who might become new entrepreneurs in the future in Europe.”
Brian Norton, CEO and founder of Future Finance, said that it was exciting to have been selected as the EIF’s UK partner “ahead of the big banks and other established lending institutions”. He said that the agreement would help “thousands” of ambitious students.
The EIF has launched a “Call for Expression of Interest” targeting financial institutions and other intermediaries which supply finance to mobile master’s students. Given the recent whispers of international expansion, leading US student lender SoFi might well take note.