Think Goldman Sachs Doesn't Support Small Business Lending?
NEW YORK (TheStreet) -- On Deck Capital, the growing Main Street business lender that has deployed more than $250 million in funding to small businesses in just a few years, has secured nearly $100 million in new debt commitments, including funding from Goldman Sachs(GS) .
The new capital will give On Deck increased lending capacity against "surging demand" from small businesses for capital, it says.
The company has secured an $80 million credit facility jointly led by Goldman and Fortress Credit, a subsidiary of Fortress Investment Group(FIG) , as well as a $17 million in venture debt loans from SF Capital and Lighthouse Capital Partners. The company didn't disclose terms of the debt financing.
One of the major issues throughout the recession and today is the difficulty encountered by small businesses in accessing capital. Not only are banks being extremely cautious when approving a loan, but the process is a lengthy and time-consuming transaction. The big Wall Street banks, in particular, have faced criticism for not supporting "the engine of the U.S. economy" -- small business owners. Goldman went as far as to launch its 10,000 Small Businesses program in 2009, a $500 million initiative including small business-geared funding for local colleges and for broader community development.
On Deck, launched in 2007, seeks to remove barriers small businesses run into when seeking bank loans.
The lender promotes its quicker, more streamlined approach for business loans and emphasizes financial health in deciding whether the business is creditworthy. It takes into account business credit data, cash flow, payments to vendors and suppliers, public record information such as liens and bankruptcies and other variables, but not a personal credit check against the owner.
"The announcement reflects the accelerating growth we've had at On Deck," CEO Noah Breslow said in an interview. "This facility that we set up with Goldman Sachs gives us the runway we need to continue to scale the business up. It's validation of the platform we built, the credit model we have and the traction we've achieved in the market."