Alternative Finances

Dealstruck Grabs $8.3M In Economy-Proofing Equity Financing

So goes the economy, so goes the likelihood of getting financing as a small business. When times are bad, the money dries up; when times are good – well actually, since the last recession, the situation has still been pretty dire, which is why so many alternative lenders have popped up to service small businesses.

However, those startups still face a problem: in the event of the economy bottoming out again, being in the business of offering small business financing might not actually be all that feasible.

Dealstruck is just such an alt financing startup, and its founder Ethan Senturia wants to be around for the next 40 years no matter what the economy does during that time.

So Dealstruck has, well, struck a deal. The firm has grabbed $8.3 million in venture financing today. The company also said it secured a $50 million credit facility as part of the financing announcement.

“Anyone who gets into the business looks back over the course of 100 years, and knows in the next 100 years, there’s gonna be a downturn again,” he said. “I’m certainly not an economic forecaster, but I can tell you from our perspective as a lender, we have structured products tied to the needs of our business owners. Even in a downturn, the structure of those products will help them better use capital and help us work them through it.”

Dealstruck specializes in $50,000 to $500,000 loans for SMBs. Post-application and pre-qualification with credit agencies, Dealstruck evaluates a potential borrower’s bank accounts for activity. Assuming the credit and bank checks pan out correctly, Dealstruck can usually proffer a loan offer within a few days – a much faster pace than a SMB can hope for at a bank.

“Throwing a thousand engineers at the problem won’t solve it — it relies on domain expertise, a long history of people who have seen long cycles, and understand how assets perform,” he said. “While you’re using tech to make intelligent credit decisions, you’re really administrating a lending product, that requires experience. Half our team really comes from commercial lending.”

While some of the funding will go toward upping the employee base of the California-based firm, much of that expansion will be in the firm’s technical and marketing segments.

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