What: Shares of On Deck Capital are up nearly 34% at 2:30 EST on Wednesday after it announced a new partnership to bring its lending products to JPMorgan customers.
So what: On Deck will work as a technology services provider for JPMorgan, with the loans staying on the bank's balance sheet, according to a report by the Wall Street Journal.
An 8-K filed by On Deck Capital confirmed its partnership with JPMorgan and added that the bank will use the company's "small business lending platform and the OnDeck Scoreto serve its small business customers."
Inking a partnership with the largest domestic bank by assets -- and a good underwriter, at that! -- serves as validation that On Deck Capital's credit scoring systems and technology may be the best solution for banks that typically cannot process small-dollar loans to businesses on profitable terms.
Now what: On Deck Capital noted in the 8-K that the partnership isn't slated to start until 2016, and gave no indication of how it might affect revenue or profitability. But if this partnership is even remotely needle-moving for a $2.4 trillion bank by assets, it should be monstrous for On Deck Capital. The market seems to agree, adding more than $200 million to On Deck Capital's market cap in a single trading day.
The article Why On Deck Capital Inc. Stock Rocketed Today originally appeared on Fool.com.
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