After the economy crashed credit and loans dried up. This was especially true for small businesses. But a new crop of business loans has become available to borrowers. One such company is OnDeck Capital, which launched in 2007. OnDeck Capital claims to be 100% focused on small business loans, trying to fill a gap in the market for small business funding needs.
Their approach is to focus on the business’s performance rather than the personal credit of the individual borrowers. This all sounds good. However, there is one caveat to all of this. OnDeck often requires a personal guarantee on the loan. So even though they are evaluating the business performance, you may be on the hook personally if the loan goes south. Notice, I say “may.”
Personal Guarantee with OnDeck Capital
If you’ve had a loan go bad with OnDeck Capital, one of the first things to evaluate is whether there is a personal guarantee AND whether that personal guarantee is enforceable. Arizona law requires the signatures of both spouses for a valid personal guarantee of a business loan. If there is a defect in the way the personal guarantee paperwork was done, it could invalidate the personal guarantee, which dramatically changes the picture and your negotiating leverage. It’s a good idea to have this issue fully evaluated by a licensed Arizona attorney.
Did OnDeck Capital Sell the Debt to a Debt Buyer Like CACH, LLC?
After a loan goes into default, OnDeck could choose to sell the debt to a third party debt buyer. One such debt buyer they have purported to transfer to is CACH, LLC. Once the loan has been transferred or sold to a third party debt buyer, a whole new set of issues arises as to the enforceability of the loan. Accordingly, you should always have your situation evaluated by a licensed attorney to see if certain defenses might apply to your situation. Debt buyers could have problems proving ownership of the debt.
Settling OnDeck Capital Debt
In light of the foregoing issues, it may be possible to settle your debt with OnDeck Capital for a fraction of the alleged balance. But first, you need to evaluate all the issues and determine your defenses and position in the matter. We can help with that.