In business, there are big-idea startups that attract millions of dollars of funding. Many of the companies that we all use every day, however, aren’t a big idea. They’re the restaurants, boutiques, coffee shops, and hotdog carts that we use every day. OnDeck owners have a new chance to create a credit rating separate from their owners. This credit rating would supply a new opportunity for entrepreneurs to build or expand their business.
Small Businesses having difficulty getting loans
It can be difficult to qualify for a small company loan. Several financial institutions are wary of lending to companies without a credit history or business history. Businesses typically don’t like to do loans less than $100,000. The work involved in a 14-item business loan package just is not worth it. Financing could be secured by business owners with less than 25 employees as long as they use their personal credit. This could be dangerous since all the risk is there for the business owner and is tied to personal accounts.
OnDeck provides a business solution
OnDeck is interlinked and Cloud-based. It can help lenders get the financial reports they need. Businesses input their business profile, link the profile to their online banking, accounting and credit-card processing accounts. That information is mixed with industry data, tax data and regional information to create a full financial profile, prospectus and business credit report. This system, five years in the making, creates the kinds of reports that large companies use to qualify for choice loans. For loans between $5,000 and $150,000, the report hopes it can streamline information for banks.
Small Businesses have more resources
OnDeck is not the only resource for small company credit even though it is helpful. A new government partnership called StartUp The United States aims to provide discounts, resources and information to help small business owners get their business going or growing. The SBA also provides loan guarantees, counseling and information for small business owners. More resources are accessible for any entrepreneur that wants one.
Articles cited
Tech Crunch
techcrunch.com/2011/05/19/smart-lending-on-deck-gives-your-startup-a-credit-score-so-you-can-secure-a-loan/
Startup America Partnership
startupamericapartnership.org/
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