Working Capital (Debt) Financing For Entrepreneurs: Mitch Jacobs, Founder And CEO, On Deck Capital (Part 5)

By guest authors Irina Patterson and Candice Arnold

Irina: What business sectors do you usually see?

Mitch: It’s all of the local services that you would see in any community or neighborhood. Restaurants, retail, local practitioners such as doctors, dentists, veterinarians, hospitality, hotel and lodging, plumbing, HVAC, repairpeople. Those are the major categories. Then there’s a category of “other” that probably includes another 50 [types of businesses]. It’s all of the different retail and service operations that make a neighborhood or town work.

Irina: How about e-commerce?

Mitch: We do support e-commerce and home-based e-commerce. Again, it has to be a legitimate operation from a size standpoint, so what we look for in e-commerce is a lot of transactions. If you’ve got a lot of transactions, then you’ve got a real business. It doesn’t matter whether it’s on Main Street or off Main Street.

Irina: Did I understand you correctly that businesses usually stay with you for six months and then they go on to something else, or do they stay longer?

Mitch: The initial transaction is about 75% [take a loan for] six months. Then they stay on the system and then when they apply for a another transaction, which could be a year later – it could be some period of time later – they are able to quickly and easily access the capital because our system is able to continue accumulating information on their businesses so that they are credit ready at any given time.

Irina: What is your biggest loan to date?

Mitch: It’s in the $100,000 range.

Irina: Do you have any interesting stories associated with any particular companies?

Mitch: At this point, we’ve received probably over 100 different stories. And they all are very similar in terms of how they describe their experiences. The narrative is that they had been searching, they had worked with their banks, they had gone to non-bank alternatives and resources such as the Small Business Administration, or they had gone to community development grant organizations and other organizations that they’d heard about.

And in every case, they spent a couple of months figuring out whether it was the right option for them and in each case, it turned out either that they were declined or the criteria of the program was not right for them.

And then through some mechanism, they heard about On Deck, and they applied. They quickly got access to the capital and were able to complete the projects that they had been so eager to engage in [and that prompted] that search for capital.

We hear that story from almost every industry in every state in the United States, and it’s very exciting to be on the receiving end of it.

This segment is part 5 in the series : Working Capital (Debt) Financing For Entrepreneurs: Mitch Jacobs, Founder And CEO, On Deck Capital
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