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JPMorgan teaming up with OnDeck Capital for lending
JPMorgan won’t be left behind. The biggest U.S. bank is tying itself to OnDeck Capital, one of the biggest online lenders, to offer small business loans.
The pilot project will launch in January, with Chase, the main U.S. banking unit for JPMorgan, offering loans of up to $250,000 to its 4 million small business customers through the OnDeck platform, reports the Financial Times. OnDeck promises real-time approvals and same or next day funding. Branding and funds will come from Chase.
“It is not a question of friend or foe,” says Jenn Piepszak, chief executive for business banking at Chase, referring to the competitive threat posed by the likes of OnDeck. “We clearly bring scale and customer acquisition to the table; what they offer is a disruptive customer experience that is very complementary with our existing services.”
OnDeck was launched in 2007, and has rapidly expanded its virtual platform to quickly process loans and provide funding. The company originated $1.3 billion of loans in the first nine months of 2015. Analysts expect online lenders like OnDeck to account for more than 8% of total consumer unsecured lending and 16% of small business lending within five years.
Goldman Sachs is also readying itself to launch an online lending platform for small businesses and consumers. In May Goldman hired Harit Talwar from Discover Financial Services to lead a new business focused on “digitally-led banking services.”