Bond Street Gets $110 Million In Financing

Bond Street, the New York based lender, announced a $110 million investment Thursday (June 18) from a consortium of financial institutions. The debt and equity investment, led by Spark Capital and Jefferies, will help Bond Street offer loans to small businesses and entrepreneurs.

Additional investors, on an individual level, include Nathan Blecharczyk, an Airbnb cofounder, and David Chang, co-owner of restaurant Momofuku.

Originally founded two years ago, the lender had raised $10 million before the latest round of investment.

“We’ve often felt guilty,” said David Haber, cofounder of Bond Street, in an interview with Upstart Business Journal earlier in the week. “We’d see these amazing businesses we wanted to approve and fund immediately, and yet we didn’t have that capital on hand.” Haber said Bond Street is on track to lend out as much as $100 million through the next year and a half. And applications for loans at the company have grown between 30 percent and 35 percent per month, he said.

In terms of a staffing ramp-up, Bond Street will spend the remaining $10 million tied to its capital raise to bring 40 to 50 employees onboard over the next two years.

Bond Street’s competitive differentiator, according to Haber, comes from building its services directly into APIs from a number of sources. Those sources range from Experian and Equifax to the IRS. The API feature helps speed decisions on loan applications to two days, versus a traditional loan process that can take several weeks. The average loan, at about $175,000, carries an interest rate of about 11 percent. The interest rate charged can range between 6 percent and about 20 percent.

“On the low end we’re still pretty competitive with banks,” said Haber. “I think what’s really encouraging to see is that even bigger companies that are very bankable are choosing to forgo their existing relationship to go with us,” Haber told the site.

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