PNC Financial Services Group's PNC Bank
will use technology from digital lender OnDeck Capital to extend loans
to small businesses online, the companies said on Monday.
From 2019, businesses in the United States will be able to apply for
lines of credit of up to US$100,000 through their mobile devices or
computers on PNC's website and receive an answer within minutes, they
said.
PNC believes the service — which combines the bank's credit expertise
and balance sheet with OnDeck's origination technology — will make it
easier and faster for small businesses to access credit.
"The goal is to take the lending experience, which normally takes
multiple days to get approval, down to three or five minutes," Lakhbir
Lamba, head of retail lending at PNC Bank said in an interview.
New York-based OnDeck is one of the most established companies that
lends to businesses through its website and then sells loans to
financial institutions such as banks. The partnership with PNC is its
second deal with a large bank, having first partnered with JP Morgan
Chase & Co in 2015.
The deal comes as more large banks start offering loans to businesses
and consumers online, a model that was pioneered by younger companies
looking to upend traditional lending.
Some banks, including Goldman Sachs Group Inc, have built their own
technology to lend online, while others, such has Banco Santander, have
opted to partner with financial technology companies.
"This provides further weight to the trend in the industry of banks and
fintechs partnering," OnDeck's CEO Noah Breslow, said in an interview.
Last week OnDeck set up a subsidiary called ODX to provide technology
and other services to banks looking to lend to small businesses online.
It said it has several other large banks in the pipeline as potential
partners.
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