New Law Spurs Lending – But Not to Main Street

The Small Business Administration has announced that in the week since the Small Business Bill was signed by President Obama, 2,000 small businesses have received loans totalling more than $1 billion. While the increased lending is certainly good news, a quick review of the numbers hints at another problem.

$1 Billion divided by 2,000 small business loans comes out to $500,000 per loan. And while the size of each loan certianly varies – it is clear that this $1,000,0000 in small business lending was not focused on Main Street. The hair salons, auto repair shops, restaurants, doctors and dentists who need $20,000 and $50,000 loans are the foundation of our economy and of our communities.

The current lending system (even with recent changes) is simply not focused on Main Street, and has reduced the underwriting of these businesses to a personal credit score – a highly inaccurate judge of the health of a business.

On Deck understands the importance of Main Street businesses to the economy, and has built a proprietary technology platform that offers a far more efficient way to judge the health of small businesses. Using this platform On Deck has provided more than $80,000,000 in capital to Main Street, and we look forward to helping more and more small businesses grow.