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Community banks often promise to move quicker on loan applications than big, bureaucratic banks. But online lenders are starting to make small banks look slow by approving small-business loans in a day or less.
May 15
OnDeck, a New York-based online lender that makes small-business loans, announced Monday that it has raised $130 million in new debt funding.
The financing should allow the six-year-old firm to keep better pace with rising loan demand, says OnDeck chief executive officer Noah Breslow. Since 2007, the company has lent out more than $600 million, often to businesses that were unable to get a bank loan.
"Our technology is solving America's number one small business challenge: access to capital," Breslow said in a news release. "These credit facilities allow us to broaden our reach to more businesses seeking financing."
OnDeck uses information from dozens of data sources to make loan decisions quickly. Borrowers can get a loan decision within 10 minutes, and get access to funding the next day. The loan amounts are often smaller than bank loans, and they also tend to be more expensive, though OnDeck says that its funding is cheaper than other sources of credit for borrowers that don't qualify for bank loans.
OnDeck competes against Kabbage, CapTap, and dozens of other startups that make small business loans online.
Participating in OnDeck's credit facility are Deutsche Bank, KeyCorp (KEY) and Square 1 Bank.
