With $275M In Capital Deployed To Main Street Businesses, On Deck Raises $100M Of Its Own

By Rip Empson – August 31, 2012

We make a lot of noise about the venture capital and angel funding startups raise to help grow their businesses. But there are a lot of mom-and-pop shops out there — businesses that are equally important to the success of the economy, whether they be restaurants or small brick-and-mortar retailers — that don’t qualify for venture funding from top firms. Instead, the country’s small businesses typically to turn to negotiating with banks for loans, which can be a headache to secure.

These SMBs don’t have finance departments or the experience to nail the lengthy, 14-item loan packages that would make them attractive to lenders. On Deck Capital launched in 2006 to give these small businesses a capital lifeline. Using a blend of data aggregation and ePayment technology, the company aims to simplify the borrowing process for Main Street businesses.

So far, it’s been working. To date, the founders tell us, On Deck has doled out $275 million in capital to SMBs and expects to cross $300 million early next month. What’s more, loan originations have increased by 50 percent in just the last four months. The company has taken off since raising $19 million in series C last year, a round which brought its own capital backing to $38 million from investors like Contour Venture Partners, First Round Capital, Khosla Ventures, RRE and Village Ventures.

But in order to make an impact lending at a truly national scale, On Deck has been on a mission to beef up its own capital reserves. This week the company’s lending capacity increased nearly three-fold, as On Deck secured nearly $100 million in new debt commitments, which includes an $80 million credit facility led by Goldman Sachs and Fortress Credit Crop as well as $17 million in venture debt loans from SF Capital and Lighthouse Capital Partners.

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