OnDeck Unleashes Q4 Stats As Alt-Lending Doubt Rises

When OnDeck first went public in 2014, around the same time that fellow alternative lender Lending Club did, it signaled the possibility of a new era of small business finance. What followed, however, was lackluster, with following quarterly reports yielding disappointing stats and the realization that online lending marketplaces may not be the market savior some investors were hoping for.

Last August, OnDeck revealed a new record for small business loan sales, which boosted earnings and expectations. But the company, at the time, admitted disappointing results from a marketing campaign, as well as the challenge of an increasingly saturated alt-lending scene.

Not to mention regulation, which has imposed a sense of uncertainty over the entire industry since it first began its explosive growth.

On Tuesday (Feb. 23), OnDeck published its most recent financial figures, this time from Q4 2015.

Luckily, the results signal the potential for alternative lending to continue along a path of success. According to the company, OnDeck saw a 51 percent increase of loan originations compared to the same quarter a year prior, reaching $557 million.

The company lent more than $1.9 billion to small and medium-sized enterprises for the 2015 year, it said.

Gross revenue saw a 34 percent increase from the prior year, and there was a 67 percent increase in net revenue. The data led OnDeck to close 2015 with a net loss of $2.23 million, far less than the $18.71 million loss it posted in 2014.

OnDeck CEO Noah Breslow seemed pleased with the report.

“OnDeck delivered a strong performance during the fourth quarter of 2015, achieving several key strategic and financial milestones and wrapping up a year where we solidified our leadership in online small business lending and achieved record financial results,” he stated.

The executive pointed to the strategic collaboration with JPMorgan Chase as a highlight of the quarter, a deal that sees OnDeck underwriting small business loans for Chase clients.

Despite the optimism, the company lowered its guidance for the quarter ahead, expecting between $66 million and $69 million in gross revenue. Guidance for 2016 includes expected gross revenue of between $320 million and $328 million, according to reports.