On Deck Capital Inc. will begin offering equipment finance loans to select U.S. small businesses in 2019.
The small-business lender will soon issue fixed-rate equipment finance loans ranging from $5,000 to $100,000, with terms ranging from 24 months to 60 months. The average ticket size is expected to be consistent with OnDeck's other small-business loan offerings. OnDeck will only offer equipment finance loans, not leases, and they will be secured by new and used equipment.
OnDeck currently offers a term loan and a line of credit product. Marking OnDeck's third finance product in its 10-year history, the new loans will expand an ongoing pilot referral program that began in the summer of 2018. Under the pilot program, OnDeck has referred small businesses seeking equipment financing to a third party that then originates and services the loans.
The lender plans to initially originate these loans from current direct and indirect marketing channels, but it might add vendor financing programs over time, said Jim Larkin, vice president of marketing and communications. OnDeck will originate and hold the equipment loans on its balance sheet. Servicing of the loans will initially be conducted by a third party, but that will be migrated in-house over time, Larkin said.
The small-business lender expects to finance both new and used equipment across a variety of industries, including office equipment, medical, manufacturing, retail fixtures, construction and light transportation. Similar to the company's other lending practices, OnDeck will not issue equipment finance loans to gun makers or sellers.
OnDeck also announced that Mark Erickson was appointed as vice president of equipment finance. He previously served in executive roles in sales, operations, syndications and risk at Key Equipment Finance Inc., a unit of KeyCorp.