New business gives credit ratings to small businesses

In the world of tech startups, getting funding is pretty standard. Discover an angel investor or big-name investment firm to dump millions of dollars into your idea. Then there are the small businesses that all of us use that are not the “big idea.” A new startup called OnDeck is trying to help these 5 million businesses qualify for loans more easily.

Small Businesses having difficulty getting loans

Getting a small business loan isn’t easy. Some companies have trouble with this. Many financial institutions are wary of lending to companies without a credit history or business history. Companies 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. Faced with these two realities, several owners of companies with fewer than 25 employees end up using their personal credit to secure financing. This could be dangerous since all the risk is there for the business owner and is tied to personal accounts.

How OnDeck can help

Cloud-based and interconnected, OnDeck aims to streamline the creation of financial reports and information for lenders. Any business using it will link it to a business profile with their online banking, accounting and charge card accounts. The full financial profile, business credit report and prospectus is created with the information also as industry data, regional information and tax data. Big companies like reports to help them decide on loans while this system was created in 5 years. For loans between $5,000 and $150,000, the report hopes it can streamline information for banks.

Other resources for smaller businesses

It can be a good idea to get OnDeck. There are other small business credit resources though. A new government partnership called StartUp The United States aims to provide discounts, resources and information to help small company owners get their business going or growing. The SBA also provides loan guarantees, counseling and information for small company 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/