Lender Dealstruck Plans Expansion With $58M Equity, Credit Funding

Dealstruck, the San Diego-based lender to small- and medium-sized businesses, announced it has raised an $8.3 million round of equity funding led by Trinity Ventures and a new $50 million credit facility led by Brevet Capital Management.

The new financing brings Dealstruck’s lending capacity to more than $100 million, the company said, and will be used to lend more money to small businesses nationally. Since its launch in October 2013, the company has made more than $50 million in loans.

Dealstruck offers loans of between $50,000 to $250,000 to qualifying small- and medium-sized businesses—typically those that have more than $20,000 in revenue, the company says on its website. Dealstruck’s roots are in crowdsourcing the loans from accredited investors, rather than operating solely as a direct lender to the businesses, as Xconomy’s Bruce Bigelow detailed during an interview with CEO Ethan Senturia in 2013.

Dealstruck’s business has migrated from being a pure peer-to-peer lender, however, and now primarily funds loans from its own balance sheet and institutional investors, Senturia wrote in an e-mail after Wednesday’s announcement.

The company has customers in 43 states and offers three base product: a term loan, an asset-based line of credit, and an inventory line of credit. Duration of the loans ranges from six to 48 months, and the interest rates are slightly higher than that of a bank, in the low teens, Senturia wrote.

Dealstruck is a part of an active alternative lending market, with new entrants such as Fundbox, which offers short-term loans for a single fee, and more established public companies such as San Francisco’s Lending Club (NYSE: LC) and New York-based On Deck Capital (NYSE: ONDK). Palo Alto, CA-based Upstart makes loans to 20-somethings who may need funding for a startup or are looking to consolidate debt, as Xconomy’s San Francisco Editor wrote in December.

Brevet Capital is a New York-based hedge fund that also makes direct loans to small- and medium-sized businesses. Trinity Ventures, focused on early stage tech companies, is based in Menlo Park, CA.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley

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