On Deck, a technology platform that connects Main Street businesses directly to capital, announced that the On Deck system has delivered more than $100 million in loans to thousands of Main Street small businesses nationwide. At a critical time in the nation’s recovery, this milestone demonstrates that the millions of U.S. pizza places, flower shops, salons, pharmacies, auto repair shops, and other local retail and service businesses are, contrary to the general perception of the financial system, top performing borrowers worthy of capital to grow and expand their businesses. 

Until now, the personal credit score has been the underpinning of small business lending in the U.S., preventing millions of healthy Main Street businesses from accessing the capital they need to hire new employees, operate, and expand. In delivering this $100 million to Main Street, the fundamental difference introduced by On Deck was to use technology to automate the evaluation of the financial health of Main Street Businesses—a process that until now has been too costly and time consuming to apply to small borrowers. Now with these results a new generation of tools are available, overturning the ubiquitous practice of using the business owners’ personal credit score to judge Main Street businesses.

“We started On Deck with the goal of fundamentally changing small business lending in America, and reaching this milestone underscores how the On Deck technology identifies healthy businesses hidden behind misleading personal credit scores,” says Mitch Jacobs, CEO, who founded On Deck in 2006. “Banks have never had cost effective tools to evaluate Main Street businesses like restaurants, salons, auto repair shops, and small retailers based on anything other than their personal credit scores. The On Deck team has done an incredible job in a very difficult environment solving this classic automation challenge and now a highly efficient, proven technology is available to deliver Main Street businesses much needed capital.”

Thousands of Main Street businesses that were wrongly turned away due to their personal credit score have been able to purchase equipment, launch marketing campaigns, hire employees, and further invest in growing their businesses through On Deck’s technology. Of the $100 million On Deck has delivered, Main street retailers and restaurants have each received more than $20 million; automotive and health care practices have seen more than $10 million each; and millions more has been delivered to businesses ranging from salons and spas to dry cleaners and small manufacturers.

On Deck evaluates the creditworthiness of these businesses based on factors reflecting the true health of a business, including cash flow and business credit data. This is a significant breakthrough for small business lending, with a major credit bureau recently confirming the system is 10 times more effective at predicting successful repayment of short-term business loans than using the personal credit score alone.

“On Deck provided me with the capital I needed to help grow my business,” says Jonathan Golden, owner of Land of a Thousand Hills Coffee Company, an Atlanta-area coffee company that includes three retail locations. “Our sales were up 40 percent in 2010, yet the banks wouldn’t focus on our true financial health when evaluating us; the On Deck system did.”

The typical On Deck customer is a Main Street business (retailer, restaurant, dentist, florist, etc.) that has been in business more than one year and who has between $300,000 and $3,000,000 in revenue.

Denise Lee Yohn: QSR's Marketing Guru, Finance, Growth, News, Operations