By J.J Colao – March 27, 2013

On Deck Capital‘s showdown with Death happened four years ago, when it abruptly lost access to $10 million in credit. An online lender to small businesses, the Manhattan outfit learned in a tense conference call that the hedge fund providing all of its capital was cutting it off in the face of investor redemptions. “It was not lost on us, the irony of losing our own line of credit,” says CEO Noah Breslow, 37.

Until then the recession had actually been a boon. As traditional sources of credit froze for even the healthiest small businesses, On Deck’s unorthodox approach to lending–and steep interest rates–quickly gained traction. The company charges a near-usurious 18% to 36% on 3-to-18-month loans, approving and rejecting applicants in a matter of minutes based on cash flow, online sentiment and public-records data, among other variables. Its loans range from $5,000 to $150,000, with an average of $30,000.

Since launching in 2007 On Deck has lent $400 million. Following the hedge fund calamity, it survived by laying off 6 of 30 employees, raising $6 million in equity funding and cutting loan volume by half. Piecing together lines of credit from small hedge funds and asset managers, it has grown at a torrid pace since–116% compound annual revenue growth–and had a small loss last year on $37 million in sales.

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