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OnDeck’s Latest Deal Shows Banks Are Ready to Outsource Some Small Business Loans

The U.S. subsidiary of Spain’s BBVA bank (shown above, in Madrid) will team with OnDeck to provide loans
The U.S. subsidiary of Spain’s BBVA bank (shown above, in Madrid) will team with OnDeck to provide loansPhotograph by Angel Navarrete/Bloomberg

Banks are outsourcing some of their small business lending. This week brought more evidence that banks aren’t interested in competing with a new breed of alternative lenders for low-dollar-amount small business loans. BBVA Compass, a U.S. subsidiary of Spanish lender BBVA, is teaming with online lender OnDeck to offer business owners short-term loans.

Under the deal announced this week, BBVA Compass, which has 687 branches across the South and West, will market OnDeck loans to its small business banking customers. OnDeck will make the loans and collect repayments.