Wells Fargo is starting a program to offer small businesses online loans in as soon as one day, targeting territory occupied by On Deck and LendingClub.
The FastFlex program will offer one-year loans of $10,000 to $35,000, with borrowers required to make weekly payments, according to a statement Tuesday by San Francisco-based Wells Fargo, which will begin offering the financing this month and has been running a pilot program since August.
"With a $100 billion lending goal, we want to make every responsible small-business loan we can," Lisa Stevens, Wells Fargo's head of small business, said in the statement. The program will offer short-term credit "through an easy, fast-decision application process that includes competitive interest rates, clear terms and as-soon-as next-day funding," she said.
On Deck and LendingClub have sought to bypass banks through peer-to-peer loans over the Internet, making the process cheaper and faster for borrowers. Traditional Wall Street banks are looking to break into the burgeoning industry, with JPMorgan Chase saying in December it was collaborating with New York-based On Deck to provide credit to the lender's 4 million small-business customers.
On Deck shares dropped 3.7 percent to $4.73 at 10:59 a.m. in New York. LendingClub slumped 5.4 percent to $4.37, extending its decline for the week to 38 percent, after disclosing on Monday that Chief Executive Officer Renaud Laplanche resigned amid internal-control lapses and abuses related to the sale of some of its loans. The U.S. Securities and Exchange Commission is examining what happened, people with knowledge of the matter said.