OnDeck And JPMorgan Chase Expand Their Partnership
Online lender OnDeck and JPMorgan Chase have announced that they are extending their contract and this will see the two financial institutions continue to partner in small business lending specifically with regards to the Chase Business Quick Capital, JPMorgan’s digital product aimed at small enterprises. The period of extension could beup to four more years.
With the Chase Business Quick Capital product access to credit for businesses is simplified for loans not exceeding $200,000 and which have a repayment term of under two years. Small business clients of the lending giant are able to make an application in a matter of minutes and the decision-making process is done in seconds. Funds are then transmitted to the applicant on the same day or the following day.
The extension of the partnership will now see OnDeck continue to offer technology enablement with a view to supporting the Chase Business Quick Capital online lending offering.
“We want to be the easiest bank for small businesses to work with, and part of that is simplifying delivery of our products so they have more time to run their businesses,” said the chief executive officer of Chase Business Banking, Andrew Kresse.
The Chase Business Quick Capital online lending offering was launched early last year and was by invitation-only made available to existing customers of JPMorgan Chase. The giant lender intends to continue refining the product and this will consist of enhancing the digital features of the product as well as expanding access in the coming year.
The extension of the partnership comes in the wake of OnDeck releasing its earnings report for the second quarter. Shares of the online lender consequently rose by 17% after revealing that progress had been made in efforts to reduce costs. OnDeck also revealed that it had made considerable progress towards improving its borrowers’ credit profile.
Like has been the case with other firms in the online-lending business, investors have raised concerns over the ability of OnDeck to improve loan quality. The firm has consequently resorted to tightening credit requirements as well as reducing expenses. This has consequently result in slower growth.
Three months ago the online lender announced that it would be reducing its yearly costs by approximately $45 million. This would be achieved by laying off about 27% of the employees. Most of these changes have been implemented and the lender projects that beginning next year, its growth rate will be in the double digits.