Wells Fargo & Co., the third-biggest U.S. bank by assets, is starting a program to offer small businesses online loans in as soon as one day, targeting territory occupied by On Deck Capital Inc. and LendingClub Corp.
The FastFlex program will offer one-year loans of $10,000 to $35,000, with borrowers required to make weekly payments, according to a statement Tuesday by San Francisco-based Wells Fargo, which will begin offering the financing this month and has been running a pilot program since August.
“With a $100 billion lending goal, we want to make every responsible small-business loan we can,” Lisa Stevens, Wells Fargo’s head of small business, said in the statement. The program will offer short-term credit “through an easy, fast- decision application process that includes competitive interest rates, clear terms and as-soon-as next-day funding,” she said.
On Deck and LendingClub have sought to bypass banks through peer-to-peer loans over the Internet, making the process cheaper and faster for borrowers. Traditional Wall Street banks are looking to break into the burgeoning industry, with JPMorgan Chase & Co. saying in December it was collaborating with New York-based On Deck to provide credit to the lender’s 4 million small-business customers.
On Deck shares dropped 3.7 percent to $4.73 at 10:59 a.m. in New York. LendingClub slumped 5.4 percent to $4.37, extending its decline for the week to 38 percent, after disclosing on Monday that Chief Executive Officer Renaud Laplanche resigned amid internal-control lapses and abuses related to the sale of some of its loans. The U.S. Securities and Exchange Commission is examining what happened, people with knowledge of the matter said.