Travis Holoway, the CEO and cofounder of SoLo Funds, says his startup isn’t just a quick way to take out a small, short-term loan. It’s the start of something bigger.

The startup, which raised $10 million in a Series A funding round last week, offers an app in which users can loan money to one another. Borrowers usually grant a small “tip” to their lenders when paying the money back, and in turn build up a “SoLo Score” that helps them take out larger loans in the future.

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“This is not an area that is well understood in terms of the actual fundamentals that determine whether someone has financial wherewithal or not, and there are all sorts of concerns about the ways that using those things as proxies embeds all sorts of other issues,” says Graham Steele, a senior fellow at the American Economic Liberties Project.

Whether those concerns invalidate what SoLo Funds is trying to accomplish is harder to say. Steele argues that short-term loans are at best a narrow solution for a small group of people, namely those who get into some kind of specific short-term pinch but otherwise can usually pay for what they need.

“For someone who is consistently behind on their rent, who is unemployed and has no prospective source of income, a loan is just going to be an anchor pulling them down, rather than a ladder which they can climb up,” Steele says.