The <em>New</em> New Alternatives A different crop of lenders is emerging, claiming that it will revolutionize tight credit markets. Really?
By Gwen Moran •
Opinions expressed by Entrepreneur contributors are their own.
When credit is tight, it's not unusual for a cadre of alternative lenders to emerge. The current credit crunch is no exception--but this time there are some interesting options.
On Deck Capital is a New York City-based alternative lender targeting small businesses that are unable to qualify for traditional bank loans up to $100,000. Because they look at business performance in addition to the borrower's credit score, they can be more forgiving of a few black marks and late payments, says CEO and founder Mitch Jacobs. Since 2006, the group has lent $75 million to approximately 2,000 small businesses.
Another new player is Revenue Loan, based in Seattle. This group lends money to startups in exchange for a percentage of future revenue. The return is traditionally capped at three to five times the revenue of the company, depending on the deal.
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