Alternative Small Business Lender Ondeck Doubles Its Revenue – Businessweek

He noted thats up two and a half times from the year before. The increase comes after a report earlier this year estimating that nonbank lenders including OnDeck loaned about $3 billion to small business owners in 2013. In a press release today, OnDeck said it received four times as many loan requests from residential construction contractors in 2013 compared with the year before, echoing research from Experian ( EXPN:LN ) and Moodys Analytics ( MCO ) thats highlighted a connection between rebounding housing markets and small business growth. And in yesterdays interview, Breslow said OnDeck has ambitions of moving up market, which may mean teaming with traditional banks to offer better interest rates to customers who previously considered OnDeck either too expensive or not long-term enough. (OnDecks average rates are 15 percent of the total loan amount, which would come to an annualized 30 percent on a six-month loan, far higher than what banks typically charge.) Breslow wouldnt reveal the companys 2013 loan volumes, but heres some rough math. Todays press release said OnDeck has loaned $825 million since 2007. Last year it said it lent small businesses $350 million through 2012. That would put last years loan volume at $475 million. A few other tidbits for close watchers of alternative lending to small businesses: Breslow said the revenue number follows generally accepted accounting principles (GAAP) and includes income from interest and fees, and subtracts certain costs, such as referral fees OnDeck pays on some loans. When we spoke yesterday, Breslow was in Las Vegas for an annual conference on asset-backed securities, where he was talking up the potential for securitizing OnDeck loans.
For the original version including any supplementary images or video, visit http://www.businessweek.com/articles/2014-01-23/another-sign-your-next-small-business-loan-wont-come-from-a-bank

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