On Tuesday, OnDeck and JPMorgan Chase announced a partnership in what I think is the biggest news for the marketplace lending industry all year. The largest bank in the country, with $2.6 trillion in assets and close to $100 billion in revenue, decided that they needed help in providing loans for small businesses. So they turned to OnDeck.
I caught up with Noah Breslow, CEO of OnDeck, yesterday to discuss this historic deal. The roots of the deal began all the way back when OnDeck was choosing its bankers for their IPO in 2014. Noah met with Jaime Dimon and other senior executives at Chase and they were very intrigued with OnDeck’s business. Dimon himself seemed passionate about doing something with small-dollar business loans and the seeds of the partnership were sewn.
OnDeck ended up choosing JPMorgan as one of its bankers for their IPO and soon after they began serious discussions. Dealing with the nation’s largest bank meant that OnDeck had to ramp up much of its infrastructure to meet the stringent requirements for this partnership. This meant significant investments in IT, data security, compliance and more.
How the Deal Will Work
There has been a lot written about the JPMorgan Chase/OnDeck deal this week but I have not read anything that describes the details of how this deal will actually work. With the proviso that they are conducting a pilot and the final details may change, Noah explained how the partnership would operate.