OnDeck has launched a new product that could allow SME clients to have their loans approved within two hours. Lightning Loans has already been tested and will now be rolled out to commercial brokers.
The product will be capped at a maximum of $ 100,000 and will only require six months of bank statements as proof. It aims to lighten the burden of brokers by clearing two-thirds of SME loans that are approved with ease, allowing them to focus on more complex operations, as well as drastically reducing turnaround times.
OnDeck recently announced their new KOALA score – Key Online Australian Loan Algorithm – to help them help in decision-making. It’s a risk management model that uses data and analytics to assess borrowers and tell them who to lend to.
“This allows us to make a more predictive decision about a company’s ability to borrow money and how much we should lend it,” said CEO Cameron Poolman. “We can access more data and get a more predictive score. “
“The goal of Lightning Loans is to use that score, but to create a process around it that gets us back with decisions for small businesses within 90 minutes. 65% of businesses that apply for loans under $ 100,000 are able to go through the Lightning Loans process and get very quick decisions.
“What’s great for brokers and clients is that they can make that decision very quickly and then decide for themselves if it’s something for them. They can decide whether they want to do the project in their business: whether they want to do a marketing plan, hire new staff, or buy factory equipment and use the depreciated asset.
“It’s a very quick decision about how much they can borrow and have that availability. I think this is in stark contrast to what brokers are seeing from other lenders on the mortgage side. We’ve invested a lot in our business to increase speed and access to SMBs, and Lightning Loans to be able to come back with this quick response.
“We’ve had a great response from our brokers so far, they absolutely love being able to get that kind of speed, and the only data we need are 6 month bank statements. This for those 65% of customers – we want to reach 80% but we are on a good trajectory.