As more small businesses look for better financing options, OnDeck Capital has become a leading option for alternative lending based on performance, not credit. Since its founding in 2007, OnDeck has created an $11 billion impact on the economy and 74,000 jobs nationwide—no small feat for a company just over a decade old. This January, WEX announced a new partnership with OnDeck that hopes to take this funding further and help even more small businesses get the capital they need, when they need it.
A New Option for Small Businesses in the US
On January 17, we announced a new partnership with OnDeck. This collaboration means OnDeck’s SME financing solutions will be integrated into the offerings of B2B payments company WEX. WEX’s business clients, they added, will have access to several loan products offered by OnDeck of up to $500,000, with lines of credit of up to $100,000.
For WEX clients, that not only means money to expand businesses but that means a chance to finance the services they buy from WEX, including fleet card solutions.
Two Ways to Fund: Cards and Financing
The partnership combines two styles of lending that allow small business owners to access the type of credit that is best for them—commercial cards and alternative financing. This means small business owners will be able to choose financing for larger purchases, while using the power of commercial and virtual card numbers to make smaller, but necessary purchases.
“OnDeck loans typically don’t compete with credit cards due to different use cases and size needs,” explained OnDeck VP of Business Development Jerome Hershey in an interview with PYMNTS. “For instance, a restaurant may want $50,000 to expand its eating space. This is a situation where a credit card line size may not be large enough.”
“The flipside is there are instances where a credit card may make more sense than an OnDeck loan — for instance, a smaller-dollar purchase at the point of sale,” the executive continued, adding that most of OnDeck’s existing SME borrowers also have credit cards to use in conjunction with external financing to help expand and support business operations.
“Whether they are looking to finance their growth by investing in more inventory or marketing initiatives, or they are looking to cover interim working capital needs, small businesses need the right credit solution for their particular need — a credit offering optimizes for loan size, speed of funding, total payback and APR.”
Addressing a Small Business’s Need for Multiple Methods of Financing
WEX’s partnership with OnDeck addresses a major gap in the industry: Small businesses too often find issues finding multiple methods of financing.
“There are a lot of borrowers who are not in the consideration set by the large banks, because they don’t meet the criteria,” explained Rashmi Singh, senior manager at the wealth management practice of EY’s Financial Services Organization, in a recent interview with PYMNTS.
Ultimately, this will help to boost the visibility, scope, and relationship-building abilities, providing a lucrative future for both companies. Learn more about the partnership from our press release, as well as the media coverage of this deal below: