Fuse launches $5M program to help credit unions leave old loan software

In short: Fuse is offering a $5 million program that lets some credit unions use its loan software for free until their current contracts end.

What happened

Fuse, a startup that sells loan origination system software, announced a $5 million “rescue fund” for credit unions. A loan origination system, or LOS, is the software a financial institution uses to take a loan application, check documents, and move the loan through approval (like a workflow checklist for lending).

Fuse says the first 50 qualifying credit unions can get free access to its platform until their current contracts with older LOS vendors expire. Co-founder Andres Klaric said a major reason credit unions do not switch systems is the cost of breaking a contract early.

The company made the announcement at the same time it disclosed a $25 million Series A funding round. The round was led by Footwork, Primary Venture Partners, NextView Ventures, and Commerce Ventures. Fuse said it already has more than 100 customers and argued the program is meant to remove a practical roadblock, since older systems often come with expensive multi-year contracts and can take up to a year to set up and connect with other tools.

Why it matters

Credit unions serve millions of people, often in local communities. When the software behind lending is old and hard to replace, it can slow down upgrades that might make applying for a loan faster and less frustrating for members. Programs like this also show how software companies are trying to win customers by paying some of the switching costs, not just by offering new features.

Source: TechCrunch AI