Earlier this week we invited five OnDeck customers in for a face-to-face discussion about their experience finding a small business loan, and their experience with us. Over the next few weeks we’ll be sharing what the panel had to say and how it could help other small business owners on their journey.
All five, before they came to OnDeck, had first been to their bank. None of them felt like their banker understood them or their business.
Seasons, A Floral Design Studio
Gerald said, “We started with the bank, but they weren’t very helpful. They just piled on the paperwork and acted like they didn’t want our business. I needed capital to expand and it was obvious I wasn’t going to get any help from our bank.”
“In order to offer a wider array of products to our customers, we needed some extra capital to expand our inventory,” said Ben. “Making a larger purchase from our suppliers—buying in bulk, would give us a better price and a better profit margin. Our bank was willing to give us a small line of credit, but not enough to do what we needed. We’d been in business for a year and a half at the time. They could see we had a successful business, but we hadn’t been around long enough for them to approve the loan we were looking for.”
One Call Support Services
Jay said, “We’re a very project-oriented business and needed cash to start a new project. We went to our bank, but they just didn’t care. They treated us like we were too small and didn’t want to lend money to anyone who really needed it. They weren’t going to go out of their way to help a company like us.”
“The first of the year is a very busy time for us, so we were looking for some capital to help us ramp up for the busy season,” said Laura. “Our bank was not helpful. They said it would take at least six weeks and we would have had to provide a mountain of paperwork to get us a line of credit. With OnDeck, the process was quick and painless.”
“I needed access to capital in order to hire a full-time project manager,” said Tom. “This allowed me to focus on pursuing larger and more profitable projects. The banks were unwilling to give me a small line of credit without a ridiculous amount of paperwork and hoops to jump through. The end result of the process is basically they only lend money to those that prove they don’t need to borrow money.”
The first place most small business owners go when they’re looking for a loan is the local bank where they have their checking account and other business-related banking services. Unfortunately, very few people actually find success there.
Every quarter, Pepperdine University publishes their Private Capital Access Index, which included responses from 3,615 participants, from Dunn & Bradstreet Credibility Corp’s business database, who answered the survey questions. The report suggests, if you’ve been turned down by the bank, you’re not alone. The most recent survey results indicate that 54.1% of those surveyed over the first quarter of this year went to the bank, yet only 39% said they found success there.
Fortunately, there are other small-business financing options. Don’t be discouraged if the bank turns down your loan application. These five business owners are great examples of savvy entrepreneurs who refuse to let obstacles get in the way of building a strong and thriving business.
Stay tuned for more feedback from our first customer feedback panel and see what they did to find the capital they needed.