March 5, 2015
By Bob Coleman
Editor, Online Small Business Lending Report
Conventional wisdom is small loans are unprofitable and banks are reluctant to approve smaller small business loans.
Thus, the reason for the explosion in online alternative lenders who promise to disrupt the small business loan space by traditional bank, brick and mortar lenders.
Two online alternative lending companies went public last year — OnDeck Capital and Lending Club and neither have yet turned a profit.
An investment lender, Lending Club,matches borrowers with lenders for a fee.
The company’s 2014 results announced last week:
Loan Originations $1.4 billion
Revenues: $213 million
4th Quarter Loss: $9 million
The stock was hammered on the news, down almost 10%.
Says CFO Carrie Dolan, “We are entering 2015 with strong momentum on many fronts, and we intend to continue to execute on our strategy of fast yet disciplined growth.
“We will also continue to aggressively invest in product development, engineering, process automation, and the buildup of support and risk management functions to pave the way for our long term growth opportunity.”