By Max Nisen – June 10, 2013

For the vast majority of small businesses — the ones away from New York and Silicon Valley and in industries like dentistry and auto repair — getting financing is a massive pain.

It involves reams of documents, weeks of waiting, and frequent rejection.

New York startup On Deck Capital hopes to appeal to these millions of businesses with a loan application process that takes minutes to complete and can be approved within a day.

On Deck’s secret is software that evaluates loans within minutes based on analysis of data including cash flow, past credit use, and vendor payment history.

While banks look closely at a business owner’s personal history, the startup makes decisions based on data about the business itself.

At the same time, the startup is efficient enough to deal with small clients.

“Banks typically don’t love lending to smaller businesses,” On Deck CEO Noah Breslow told Business Insider. “It’s much more efficient for a bank to make a million dollar loan than a $50,000 loan.”

This has been the status quo for years, and banks have been slow to innovate in the space due to tight regulatory scrutiny, their sheer size, and issues with their legacy business.

Other startups in the space include Capital Access Network and Kabbage, and even Amazon is getting into the game.
For On Deck to succeed, it will have to prove that its rapid loan evaluations are effective and gain a market foothold before competition moves in.

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