Revenue growth outpaced rising expenses at OnDeck Capital during the third quarter, allowing the fast-growing small-business lender to turn a profit.

New York-based OnDeck earned $3.7 million, compared with a $3.3 million loss in the same period a year earlier, the firm reported Monday.

Gross revenue totaled $67.4 million, up 55% from year earlier, as loan originations in the quarter climbed 54%, to $482.7 million. That growth more than offset a 99% jump in operating expenses, to $42.5 million.

OnDeck has expanded its lending at a rapid pace since going public in December 2014, but the company's share price has fallen as its expenses, including sales and marketing costs, have also risen sharply.

The company keeps some loans on its own balance sheet, while selling others to investors. The latter business has grown quickly over the last year; so-called marketplace loans rose to 38% of the company's loan originations in the third quarter, up from 8% a year earlier.

OnDeck's loans are often marketed to small businesses that cannot qualify for a bank loan, and its interest rates are far higher than those of bank loans. But average interest rates on the company's loans have been falling, and that trend continued in the third quarter.

The average annual percentage rate on OnDeck's loans was 42.7% during the quarter, down from 52.8% in same period last year. The company attributed the decline to an increase in the average length of its term loans, a shift to less expensive loan distribution channels, and an effort to offer lower prices for repeat borrowers.

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