In business, there are big-idea startups that attract a ton of funding. Several of the companies that all of us use every single day, however, are not a big idea. They’re the restaurants, boutiques, coffee shops, and hotdog carts that we use every day. A new startup called OnDeck is trying to help these 5 million companies qualify for loans more easily.
Small business lending issues
It could be difficult to qualify for a small company loan. Most financial institutions do not want to lend to individuals without a credit history or business history. This means companies may not be able to get a loan. Businesses typically do not like to do loans less than $100,000. The work involved in a 14-item business loan package just is not worth it. Financing can be secured by business owners with less than 25 employees as long as they use their personal credit. The business ends up tied to personal accounts with this, which can be dangerous. The risk is somebody potential owners will not like.
The best answer from OnDeck
Cloud-based and interconnected, OnDeck aims to streamline the creation of financial reports and information for lenders. It links companies with their accounting, credit card processing and online banking accounts. This will be in their business profile. The full financial profile, business credit report and prospectus is created with the information as well as industry data, regional information and tax data. Big businesses like reports to help them decide on loans while this program was created in five years. The information is much more real time than the information banks will give you. The process for loans between $5,000 and $150,000 will be much better with it.
Small Businesses have more resources
OnDeck provides new financing resources for smaller businesses, but it is not the only new resource for getting small company 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. For counseling, information and loan guarantees, there is another place business owners can go. This is the Small business administration. There are lots of resources out there for entrepreneurs willing to watch for them.
Articles cited
Tech Crunch
techcrunch.com/2011/05/19/smart-lending-on-deck-gives-your-startup-a-credit-score-so-you-can-secure-a-loan/
Startup America Partnership
startupamericapartnership.org/
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