OnDeck will be adding a new corporate financing product to its offering next year: equipment finance.
In a press release issued Wednesday (Dec. 19) OnDeck said it will introduce equipment finance loans to certain U.S. small businesses beginning in 2019, calling the space a traditionally “slow-moving, opaque an complicated process” in need of digitization and technological innovation.
In a statement, OnDeck CEO and Chairman Noah Breslow said that the company feels it is well-positioned to bring its existing experience in the online small business lending space to the equipment finance market.
“We expect OnDeck equipment finance loans to quickly become a vital source of online financing for small business owners seeking simple, transparent equipment financing they can understand and utilize,” he said.
The online small business lending company cited data from the Equipment Leasing & Finance Association's 2018 Survey of Equipment Finance Activity, that calculated an estimated $35 billion in new small-value (under $250,000) equipment loan and lease financing originated in the U.S. last year. OnDeck began piloting its equipment financing solution earlier this year, referring small businesses to third-party originators and loan service providers.
As the company rolls out its solution to the broader market, OnDeck said it will begin directly providing equipment finance loans between $5,000 and $100,000. Terms range from 24 to 60 months, it said, backed by used and new equipment companies have in place.
OnDeck added that it will not lease equipment.
In addition to the new product, OnDeck also announced that Mark Erickson joined the company to become its vice president of equipment finance.
“I look forward to working with the team to leverage OnDeck's online originations and underwriting technology to deliver speed and convenience for small business owners seeking equipment finance loans,” Erickson said. “With speed, service and transparency, we are poised to transform this market to the benefit of small businesses.”
Data released by OnDeck last month revealed the company's loan origination volume increased by 22 percent from Q3 2017.