OnDeck (NYSE: ONDK), a NYC-based platform for small business lending, entered into an amended forward purchase agreement with an affiliate of Jefferies Group LLC, giving Jefferies the ability to purchase up to $500m in small business loans through OnDeck Marketplace® over the next 12 months.
OnDeck Marketplace is a platform that enables institutional investors to purchase small business loans originated by OnDeck.
Participants include institutional investors, asset managers, hedge funds and business development companies.
To use the platform, each institutional investor opens its own OnDeck Marketplace account, purchases loans on a programmatic basis, and then receives daily principal and interest payments from the loans it owns.
Loans in OnDeck Marketplace are assigned one of six grades primarily based on their OnDeck Score®, and these grades set the prices institutional investors pay for individual loans. These comprehensive metrics allow OnDeck and institutional investors to better evaluate risk when making small business loan decisions.