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 Edited by Frances Dodds
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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