OnDeck is fixed on the small- and medium-sized enterprise market with its online lending platform, and the company’s latest announcement suggests it may be fixed on partnerships with the same objectives.
Reports in Bankless Times Monday (Oct. 18) said OnDeck is extending, yet again, its existing partnership with the Association for Enterprise Opportunity in an effort to meet the working capital needs of entrepreneurs and small businesses.
The AEO will work with local CDFIs (community development financial institutions) and nonprofit lenders to connect SMEs with lenders, reports said, leading to up to $10 million in small business loans.
Four CDFIs have funneled about $1.5 million to small businesses, and OnDeck said it will look to link 10 CDFIs to the program by early 2016.
In an interview with the website, OnDeck Chief Operating Officer James Hobson said that the company’s strategy to facilitate SME lending through CDFIs is to create a robust platform and utilize data analytics. Data is key, he added, meaning that corporate size does not matter in the ability to obtain a loan – it’s a matter of relativity, instead, thanks to a business’ financial data.
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Hobson added that OnDeck’s national scale helps the venture, too.
“Many CDFIs are focused on local communities,” he said. “A national platform allows you to cut through many of their challenges.”
Small businesses that want to participate in the program are linked to OnDeck through the TILT Forward program. The businesses are then analyzed for their financial data to mitigate risk. Hobson said that the platform’s data analytics capabilities allow it to lend to SMEs across 700 industries.
The executive also noted how data is helping mitigate risk through the launch of the OnDeck score, which is now in its fifth version. “We are at an exciting time because our score is able to allocate capital,” Hobson told the site. “As online lending becomes mainstream, these partnerships will bring added credibility to the sector while also producing more data from which we can learn and improve.”
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