Last month, it was reported that OnDeck had hit the pause button on lending as it reassessed the market and adjusted operations in light of the global COVID-19 pandemic. During the Q1 earnings call, OnDeck CEO Noah Breslow stated:
“… this challenging and dynamic operating environment clearly has a very direct impact on the small business lending landscape in which we operate, creating near term headwinds, as well as long-term opportunities including potential consolidation within our industry. We continue to work with our board to explore all options to maximize shareholder value.”
There were rumblings of a possible sale.
The “Mid-Quarter Update” that was filed a week ago on May 28th, outlines all of the actions taken to mitigate the impact of the Coronavirus on operations.
OnDeck said they remain focused on managing credit risks and improving collectability from existing accounts. Meanwhile, in a positive note, OnDeck said it is:
“…observing early signs of improvement in industries less impacted by the pandemic and in geographies that are beginning to reopen..”
“The COVID-19 pandemic continues to have a profound impact on the small business lending environment. We are generally tracking to the second quarter origination and expense targets discussed during our first-quarter earnings call. We plan to align our second half 2020 origination strategy and operating expense to fit our liquidity position and the operating environment to position the Company for success as the pandemic abates and the economy begins to recover.”
OnDeck also posted a deck providing additional insight into actions taken by management to buttress the firm as the Coronavirus lingers.
OnDeck is not alone in its challenges. Other online lenders have had to make quick adjustments as governments issued stay at home orders and businesses shut down. It’s pretty hard to plan for a pandemic.
For OnDeck and other Fintech lenders, the big question remains as to how long will the Coronavirus be a problem and when will the economy emerge from the health crisis-induced recession.
OnDeck Mid Quarter Update Investor Deck FINAL May 2020