OnDeck platform provides a credit rating to small businesses

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For small businesses that need loans smaller than $100,000, new options are becoming available every day. Image: Flickr / somekindabetty / CC-BY-SA

In business, there are big-idea startups that attract millions of dollars of funding. Then, there are most businesses — restaurants, coffee shops and specialty retailers that provide the day-to-day services we all use. A new startup called OnDeck is trying to help these 5 million businesses qualify for loans more easily.

The problem with small business lending

For many small businesses, qualifying for loans can be a challenge. Many financial institutions are wary of lending to businesses without a credit history or business history. Loans for amounts less than $100,000 are often considered not worth the work it takes to vet a full business with the standard 14-item business loan package. Faced with these two realities, many owners of businesses with fewer than 25 employees end up using their personal credit to secure financing. While this does tie business success to personal accounts, it also creates a dangerous brew of expensive financing and risk to personal finances that scares many potential business owners.

OnDeck provides a business solution

Cloud-based and interlinked, OnDeck aims to streamline the creation of financial reports and information for lenders. Businesses input their business profile, link the profile to their online banking, accounting and credit-card processing accounts. That information is blended with industry data, tax data and regional information to create a full financial profile, prospectus and business credit report. This system, five years in the making, creates the kinds of reports that big businesses use to qualify for choice loans. The reports also provide more real-time information than banks currently use, hoping to streamline the process for loans between $5,000 and $150,000.

Other resources for small businesses

OnDeck provides new financing resources for small businesses, but it is not the only new resource for getting small business credit. A new government partnership called StartUp America aims to provide discounts, resources and information to help small business owners get their business going or growing. The Small Business Administration also provides loan guarantees, counseling and information for small business owners. There are lots of resources out there for entrepreneurs willing to look for them.


Startup America Partnership

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