In the interest of facilitating online small-business loan access for its customers, J.P. Morgan Chase & Co. recently partnered with On Deck Capital Inc., a small-business financier with cutting edge technology. The auspicious decision suggests that the banking industry will continue to connect with independent, up-and-coming lenders rather than challenge them. However, J.P. Morgan didn’t spark this trend.
In late 2015, Regions Financial Corp. collaborated with Fundation Group LLC, which is one of the nation’s leading direct lenders. Regions sought Fundations out because of their transparent terms and their documented management of billions in loans and leases within lending markets. Additionally, five years ago, a faction of Wells Fargo & Co. coordinated with CAN Capital Inc. to assist customers who’d been declined a bank in loan past. Wells Fargo connect them with the online lender.
Big banks are drawn to small-business lending because it means that they’ll partner with potential Silicon Valley goliaths. By retooling the small-business process, banks stand to further occupy their pockets with cash. Newcomers to the business industry have emboldened the banks, contributing to post-recession recovery. While loan output is significantly lower than it was in 2006, the nation’s ten largest banks near extended nearly $45 billion in credit in 2014.
With that said, Bank of America has expressed no interest in partnering with alternative or online lenders, unwilling to allow one of the loan firms to sully its reputation. Independently, Bank of America offers an online portal connecting small-business leaders with resources and information. They provide banking, a business credit cards, and information about popular financing options, preferred SBA (Small Business Administration) lenders, health care practice loans and a small business online community for entrepreneurs to chat and exchange information.
OnDeck, J.P. Morgan Chase’s new partner, offers short term loans, long term loans and lines of credits to entrepreneurs and small businesses.
Eddie Dovner is an entrepreneur, inventor, and CEO who is based in West Palm Beach, Florida. Learn more about Eddie Dovner by visiting his pages on LinkedIn, Twitter, and SlideShare. Also, please learn more by visiting EdwardDovner.org and EddieDovner.com.