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Company Overview


Company Address 1400 BROADWAY


New York, NY 10018

Company Phone 888-269-4246

Company Website

CEO Noah Breslow

Employees (as of 9/30/2014) 369

State of Inc DE

Fiscal Year End 12/31

Status Filed (11/10/2014)

Proposed Symbol ONDK

Exchange New York Stock Exchange

Share Price 16.00-18.00

Shares Offered 10,000,000

Offer Amount $207,000,000.00

Total Expenses $4,000,000.00

Shares Over Alloted 1,500,000

Shareholder Shares Offered --

Shares Outstanding 66,160,636

Lockup Period (days) 180

Lockup Expiration --

Quiet Period Expiration --

CIK 0001420811

Company Description

We are a leading online platform for small business lending. We are seeking to
transform small business lending by making it efficient and convenient for small
businesses to access capital. Enabled by our proprietary technology and
analytics, we aggregate and analyze thousands of data points from
disparate data sources to assess the creditworthiness of small businesses
rapidly and accurately. Small businesses can apply for a term loan or line of
credit on our website in minutes and, using our proprietary OnDeck Score, we can
make a funding decision immediately and transfer funds as fast as the same day.
We have originated more than $1.7 billion in loans and collected more than
4.4 million customer payments since we made our first loan in 2007. Our loan
originations have increased at a compound annual growth rate of 127% from 2011
to 2013 and had a year-over-year growth rate of 171% for the nine months ended
September 30, 2014.

The 28 million small businesses in the United States are integral to the U.S.
economy and the vibrancy of local communities, employing approximately 50% of
the private workforce. Small business growth depends on efficient and
frictionless access to capital, yet small businesses face numerous challenges
that make it difficult to secure such capital. Small business owners are time
and resource constrained, but the traditional borrowing process is time
consuming and burdensome. Small businesses surveyed by the Federal Reserve Bank
of New York indicated that the traditional funding process required them, on
average, to dedicate 26 hours, contact 2.6 financial institutions and submit 2.7
loan applications. These challenges exist in part because it is inherently
difficult to assess the creditworthiness of small businesses. Small businesses
are a diverse group spanning many different industries, stages in development,
geographies, financial profiles and operating histories, historically making it
difficult to assess their creditworthiness in a uniform manner, and there is no
widely-accepted credit score for small businesses. In addition, small businesses
often seek small, short-term loans to fund short-term projects and investments,
but traditional lenders may only offer loan products that feature large loan
sizes, longer durations and rigid collateral requirements that are not well
suited to their needs.

The small business lending market is vast and underserved. According to the
FDIC, there were $178 billion in business loan balances under $250,000 in the
United States in the second quarter of 2014, across 21.7 million loans. Oliver
Wyman, a management consulting firm and business unit of Marsh & McLennan,
estimates that there is a potential $80 to $120 billion in unmet demand for
small business lines of credit, and we believe that there is also substantial
unmet demand for other credit-related products, including term loans. We also
believe that the application of our technology to credit assessment can
stimulate additional demand for our products and expand the total addressable
market for small business credit.

To better meet the capital needs of small businesses, we are seeking to use
technology to transform the way this capital is accessed. We built our
integrated platform specifically to meet their financing needs. Our platform
touches every aspect of the customer lifecycle and a potential customer can
complete an online application 24 hours a day, 7 days a week. Our proprietary
data and analytics engine aggregates and analyzes thousands of online and
offline data attributes and the relationships among those attributes to assess
the creditworthiness of a small business in real time. The data points include
customer bank activity shown on bank statements, government filings, tax and
census data. In addition, in certain instances we also analyze reputation and
social data. We look at both individual data points and relationships among the
data, with each transaction or action being a separate data point that we take
into account. A key differentiator of our solution is the OnDeck Score, the
product of our proprietary small business credit scoring system. Both our data
and analytics engine and the algorithms powering the OnDeck Score undergo
continuous improvement to automate and optimize the credit assessment process,
enabling more rapid and predictive credit decisions. Each loan that we make
involves our proprietary automated underwriting process, and approximately
two-thirds of our loans are underwritten using a fully-automated underwriting
process that does not require manual review. Our platform supports same-day
funding and automated loan repayment. This technology-enabled approach provides
small businesses with efficient, frictionless access to capital.

We believe that the differences between our approach and the approach adopted by
traditional lenders are what have allowed us to better address the challenges of
small business lending. In our approach, manual underwriting has largely been
replaced by an automated, data-driven approach to credit assessment. Expensive
branch networks have been replaced by an online website for applications and
account management. Service of consumers and businesses of all sizes has been
replaced by a singular focus on small business. In addition, we are subject to
less regulation than traditional lenders because we do not make loans to
consumers nor do we take deposits. We believe that differences in our loan
products allow us to better meet the needs of small businesses. Small business
owners typically seek small, short-term loans so we offer term loan products
that range in size from $5,000 to $250,000 and feature terms of 3 to 24 months
versus traditional lenders that offer larger and longer term loans. At
September 30, 2014, our outstanding loans had original loan balances ranging
from $5,000 to $250,000. We also offer a line of credit product that can be
approved more quickly than comparable products offered by traditional lenders.
We believe that small business owners prefer predictability so we offer fixed
interest amounts and automated daily or weekly repayments compared to
traditional lenders that offer both fixed and variable rate loans with monthly
repayments. We also believe that small business owners value flexibility so we
don’t have the rigid collateral requirements that are typical of traditional
lenders. All or substantially all of our term loans and lines of credit are
currently collateralized through a security interest in our customers’ assets,
but we do not require a minimum amount of collateral to make a loan. We intend
to transition to unsecured lines of credit in the near future.

We lend to a wide variety of small businesses across more than 700 industries
and in all 50 U.S. states and have recently begun lending in Canada. The top
five states in which we originated loans in 2013 and in the nine months ended
September 30, 2014 were California, Florida, New York, Texas and New Jersey,
representing approximately 14%, 10%, 8%, 8% and 4% of our total loan
originations for the year ended December 31, 2013 and approximately 15%, 9%, 8%,
8% and 4% of our total loan originations for the nine months ended September 30,
2014, respectively. Our most frequent customers are professional services firms,
retailers, restaurants and food service companies, healthcare specialists and
wholesalers. We also lend to customers with a range of financial and operating
histories: our customers have a median of $568,000 in annual revenue, with 90%
of our customers having between $150,000 and $3.2 million in annual revenue, and
have been in business for a median of 7.5 years, with 90% in business between 2
and 31 years.

We believe that our product pricing has historically fallen between traditional
bank loans to small businesses and certain non-bank small business financing
alternatives such as merchant cash advances. The weighted average pricing on our
term loan originations has declined over time, as measured by both average
“Cents on Dollar” borrowed per month and APR, as shown in the table below.

Q1 Q2 Q3 Q4 Q1 Q2 Q3
2013 2013 2013 2013 2014 2014 2014
Average “Cents on Dollar”
Borrowed, per Month 2.73 ¢ 2.71 ¢ 2.62 ¢ 2.60 ¢ 2.53 ¢ 2.38 ¢ 2.24 ¢
APR 65.9 % 65.0 % 62.9 % 62.1 % 60.3 % 57.1 % 53.2 %

We attribute this pricing shift to increased originations from our direct and
strategic partner channels as a percentage of total originations, as well as our
declining cost of funds rate. “Cents on Dollar” borrowed reflects the monthly
interest paid by a customer to us for a loan, and does not include the loan
origination fee and the repayment of the principal of the loan. Because many of
our loans are short term in nature and APR is calculated on an annualized basis,
we believe that small business customers tend to evaluate term loans primarily
on a “Cents on Dollar” borrowed basis rather than APR.

We have a diverse and scalable set of funding sources. These include debt
facilities, securitization of small business loans generated by OnDeck and the
OnDeck Marketplace, a proprietary whole loan sale marketplace that allows
institutional investors to directly purchase small business loans from us. We
believe that having diverse sources of capital enables us to reduce our average
cost of capital, provides multiple sources of capital in a variety of economic
climates and provides increased flexibility as we seek to increase our loan
originations. Affiliates of certain of our underwriters in this offering are
participants in our various financing facilities and have acted in various
administrative roles in connection with such facilities.

We were incorporated in Delaware in May 2006. Our principal executive offices
are located at 1400 Broadway, 25th Floor, New York, New York 10018, and our
telephone number is (888) 269-4246. Our website is

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Current Price
Bid Ask Day's Range
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#26   What a junk stock this has become. live Starmocity 01/13/16 02:27:57 PM
#25   $ONDK recent news/filings stocktrademan 12/02/15 03:25:57 PM
#24   Might be something here. Pat1200 12/01/15 05:44:19 PM
#23   Symbid Whitepaper: Higher Rates, Higher Risks: Learn Leonitus 11/09/15 06:41:12 PM
#22   It's happened to many good companies. starbuxsux 08/05/15 09:50:52 AM
#21   And yet its falling harder than a rock. Starmocity 08/05/15 09:49:49 AM
#20   $ONDK - On Deck Capital beats by $0.06, starbuxsux 08/03/15 04:27:22 PM
#19   $ONDK - OnDeck Announces Forward Purchase Agreement to starbuxsux 08/03/15 04:18:52 PM
#18   OnDeck Reports Second Quarter 2015 Financial Results starbuxsux 08/03/15 04:12:39 PM
#17   The Street Sweeper just published an article on rbtree 02/11/15 01:40:44 PM
#16   Both ONDK and LC trading @21 and change. Phantom Fiber 01/12/15 01:49:47 PM
#15   Being wrong predicting OS always fun... Maybe we T695 12/22/14 09:03:50 AM
#14   I try never to make predictions but I starbuxsux 12/19/14 12:56:38 PM
#13   I also predict we open somewhere in the T695 12/18/14 07:46:27 PM
#12   I'm thinking we start a nice uptrend from here. T695 12/18/14 07:38:06 PM
#11   With this share structure I'm waiting for $20 starbuxsux 12/18/14 03:49:22 PM
#10   Should see a turn around from here T695 12/18/14 12:05:29 PM
#9   Just got in at 26.12 T695 12/18/14 12:03:49 PM
#8   Yep...stopped out at $28 now it looks like starbuxsux 12/18/14 11:52:55 AM
#7   Bottom could be 25 T695 12/18/14 11:31:17 AM
#6   May even wait for it to go lower T695 12/18/14 09:44:17 AM
#5   Seem to be more sellers than buyers at T695 12/18/14 09:25:50 AM
#4   Watched it all day to see what it does T695 12/18/14 09:24:29 AM
#3   You had $26.12 yesterday didn't you? starbuxsux 12/18/14 09:14:53 AM
#2   I'm watching this close but I'm waiting till T695 12/18/14 09:05:39 AM
#1   IN @ $27.02 avg starbuxsux 12/17/14 03:11:32 PM