On Deck recently attended the “Overcoming Obstacles to Small Business Lending” Forum at the FDIC headquarters in Arlington Virginia. Shown live on CNBC, the event featured two panels focusing on both the obstacles in small business lending and ways to overcome these problems. The impressive list of panelists included Federal Reserve Chairman Ben Bernanke, Senator Mark Warner, Chairman of the FDIC Sheila Bair and Thomas D. Bell Jr., Chairman of the U.S. Chamber of Commerce.
Time and time again during the event we heard what could certainly be called On Deck talking points being delivered by different panelists. During a lengthy discussion on the effect falling real estate values have had on small business lending (in regards to collateral) – several speakers made a point to stress the importance of underwriters actually understanding the financial health of the businesses – and not taking short cuts.
Chairman Bernanke: “Collateral can be a substitute for good underwriting…there are substitutes for lazy lending, which is the hard work of understanding the business”
Chairman Bair of the FDIC: “Look at the creditworthiness of the borrower, look at the cash flows, look at the ability to repay – not just the underlying collateral – you will have good healthy lending going forward”
The second panel included an excellent 5+ minute discussion with On Deck CEO Mitch Jacobs on a question he posed regarding the personal credit score holding back lending to Main Street businesses. This talk about the (unfortunate) dependence on the personal credit score and how technology can be used to solve the issue generated a significant amount of interest with both members of the panel as well as other attendees – many of whom came up after to agree with our take on the issue, and discuss how we can help help solve the problems addressing Main Street.
It was another great day for On Deck as we continue to spread the message about how technology will solve the problem of delivering capital to Main Street.