Building a Successful Business with OnDeck

Offering efficient and tailored access to capital is the mission of OnDeck Canada, one of the country’s leading online business lenders that relies on data analytics and digital technology to make real-time lending decisions.

“We are trying to create a friction-less onboarding application process – to make it as easy as possible for merchants to submit their application, to get an approval, and to sign a contract,” said Stefan Capombassis, OnDeck Canada’s Vice President of Sales.

By focusing on servicing this vital funding need of small and medium-sized enterprises through every part of the entrepreneurial journey, OnDeck itself has been able to grow leaps and bounds since the company launched in Canada – amidst the backdrop of the Great Recession. Since 2007, the OnDeck Group has issued over US$13 billion in loans in Canada, the U.S. and Australia for various types of business demands.

Capombassis has been on the frontlines with the company since its own startup days. “When I start working with David [Souaid, Chief Revenue Officer], it was a true startup. I was the first salesperson – I was entrusted with bringing in business, building partnerships, building up a sales team. Brick by brick, year after year, we slowly built up the company to one of the market leaders in Canada,” he said.

Capombassis credited this growth to their focus on cultivating authentic relationships with their clients. He also advises businesses to do the same with their financing providers. That begins with doing your research and conducting due diligence into the many providers (alternative lenders as well as traditional banks) available in the market, according to him. He recommended getting a deep understanding of how the offers differ, specifically when it comes to repayment and flexibility.

Take the time to understand what you’re dealing with, Capombassis stressed.

“It’s not just what the cost of the loan is compared to our competitor. It’s also, how do we treat you in the long term? Because [OnDeck] doesn’t want you as a short-term client – we want to build long-term relationships with our clients.”

He noted that OnDeck “doesn’t pretend to be everything to everybody.” He added: Very often, we are working with business owners who are combining our financing with Royal Bank or BMO or Scotia or the BDC [Business Development Bank of Canada]. That’s the reality of the situation.”

That being said, he warns that it’s likely “not safe for anybody to put all their eggs in one basket” and rely on only one lender — especially the big banks, which tend to be more conservative and risk-averse in their financing with newer and smaller businesses.

He points to the example of his spouse — who owns a women’s clothing boutique in Montreal — to illustrate the issues with relying solely on banks. “While [my wife’s boutique has] had many years of success, at some point [her tier-one bank’s] appetite for retail business changed and they reduced their line of credit from $45,000 to $10,000. That has a very big impact on the small business owners to purchase inventory.”

OnDeck Canada offers three types of financing programs for small- and medium-sized business owners:

• business loans

• lines of credit

• and “flex funds” (factor financing based on a business’s debit and credit card receivables)

Business loans require fixed-dollar repayments, while flex funds — as the name suggests — offer more flexible repayment options based on sales. These two options suit more immediate needs as business owners obtain the funds right away. Being a pre-set borrowing limit, a line of credit can be tapped into at any time and over a longer period.

Capombassis’ tips for business owners include ensuring:

• the return on investment exceeds the cost of capital

• the return on investment exceeds the cost of capital

• the repayment amount you’re approved for is manageable

He also emphasized closely monitoring one’s personal and business credit and finances as an owner and not overlooking these as you focus on your passion of running the business — whether it’s a restaurant or somebody in fashion, like his wife. While monitoring bills isn’t as inspiring as experimenting with a new menu or supplier, these shouldn’t be neglected. “Not paying your Fido or Bell bill for six months because you’re too busy running your business can have a massive negative impact on your personal credit. That can in turn impact what you can qualify for or if you qualify for a business loan,” Capombassis said.

“We often say on the sales side of our business, ‘Our money is used to survive or thrive.’ That is more applicable now than ever. During COVID, very often our funds have been used to survive through the hardships. And now that we’re hopefully coming out of COVID, opportunities are presenting themselves, and money is being used for opportunities instead of surviving,” he added.

This past December, the BDC found in its annual survey of business owners that they are optimistic and bullish about the economy in 2022. This signals more growth opportunities and demand for capital — as well as more innovation from lenders like OnDeck to stay on top of the industry and customer trends.

Running a business, much like life itself, is a chess game. “You have to think three moves ahead. Don’t think what [financing] am I going to need now. Think three moves downs: what am I going to need nine months from now — to make sure my business will continue to thrive. Who are the companies I want to align with — is OnDeck Canada one of those companies? And for many small businesses, we are,” he said. “I sleep well at night because the company I work for and have worked for a decade genuinely has the best interests of small businesses owners in mind.”