Chase announced yesterday that they are partnering up with OnDeck to better serve it’s small business customers. I have wondered for some time why it took so long for one of the major banks to make this move as they have been leaving revenue on the table simply because they weren’t equipped to service a large segment of their own customer base.
Going forward, when a chase customer applies for a loan under $250,000 then there is a very good chance that OnDeck will be handling that loan. All traditional banks such as JPMorgan Chase have trouble providing smaller loans under the $250,000 mark but companies like OnDeck that provide alternative funding clearly have it figured out as they have lent more than $3 billion to small businesses to date.
While this is a clear win for both Chase and OnDeck it doesn’t come without criticism. OnDeck historically has significantly higher rates and shorter terms than traditional banks loans like Chase. These are riskier loans to provide so the rates are justified and OnDeck has some of the absolute best rates in the alternative lending industry. The good news is, on these types of small business loans the decisions are usually made within days or even hours with OnDeck. I have seen a customer apply and have the funds wired into his business bank account 5 hours later that day with their On Deck Express online checkout product.
Overall this is a move that will significantly help small businesses and I see other major banks following suit and partnering up with alternative lending companies like OnDeck.
Sprout is a small business loan marketplace which works with OnDeck as well as 100+ other small business lending companies to get our clients the absolute best possible rate on a small business loan. Sprout let’s the banks compete for your business and can provide loans in as little as 24-48 hours with minimal paperwork via our online process. Call 800-865-6057 to speak with one of our Funding Specialists today!