Briefly describe your career and how you came to work at OnDeck?
I have been in the capital markets space for nearly 20 years. Prior to OnDeck, I was a Managing Director of the Asset Finance Group at Gleacher & Company; Managing Director and Head of Structured Products Group at Keefe, Bruyette & Woods; SVP at Fortis Securities and WestLB AG; and Portfolio Manager at PPM America.
You come from a traditional finance background. How has the transition been to a tech company?
The transition has been exciting and OnDeck has been an eye opening experience for me. While OnDeck has many similar characteristics of traditional lenders that I used to advise, the tech aspect makes OnDeck extremely unique. There is a tremendous amount of electronic data about small businesses that traditional lenders are ignoring or unable to process. Through our technology platform, we are able to digest and analyze a significant amount of data in real time, which allows us to make better credit decisions faster.
What do you like most about working at OnDeck?
It’s inspiring to be a part of a company that is helping small businesses succeed and our economy grow. We are on the forefront of fundamentally transforming an antiquated lending system through technology.
How does OnDeck differentiate itself from the other online small business lenders?
We’re doing two things to disrupt the industry: we’re making short term working capital more accessible and we’re making the process faster so business owners can spend their time growing their business instead of trying to find financing. First, our OnDeck Score enables us to make capital more accessible by incorporating business operations and performance data to more accurately assess a business’ health. Second, we’ve deployed a proprietary technology that delivers speed and convenience to small business owners, as well as superior service they deserve. We find that business owners generally want to speak to someone about their loans and so we have loan specialists available Monday through Saturday to talk to customers about their needs and options.
What is one common misconception people have about OnDeck?
Many of our customers think we are similar to banks. They know we are more tech enabled than banks, but they are blown away with just how fast and easy the process is. We have a 10-minute, online application process (vs. days or months of bank paperwork) and we evaluate small businesses using thousands of data points (vs. relying heavily on business owners’ FICO scores).
What projects are you working on that have you particularly excited?
Our mission at OnDeck is helping small businesses, and small businesses have many financing needs. We are constantly testing new features and products to better serve small businesses, and I am focused on making sure we have flexibility on the financing side to meet all their needs. We are also growing OnDeck Marketplace, where institutional investors can buy loans we originate directly. Accessing the securitization market is another big step in executing OnDeck’s financing strategies. Through securitization, we are able to continue improving our financing terms while diversifying our investor base, which significantly benefits all key stakeholders in the business.
Education is a big part of growing this industry. What is OnDeck doing to facilitate this?
Educating small businesses is very important to us. When we launched, the direct lending space was in its infancy. Most small business owners were not aware of alternatives to banks. Over the years, we have increasingly added new educational resources for our customers. For example, we have a blog and newsletter that distributes daily tips such as how to apply for a loan and how to better manage your business. We also host OnDeck events and have partnered with organizations such as SCORE to provide small businesses with resources they need to make vital business decisions.
Are there any other companies in the space that you think are doing very innovative things?
There has been a secular change in the lending space. Similar to OnDeck innovating the small business lending space, companies like LendingClub, Prosper and SoFi are changing the landscape of the personal lending space. It is an exciting time for our industry.
What’s next for OnDeck?
OnDeck’s vision is to transform how money flows to small businesses by leveraging our platform to enable all types of investors to make capital on demand a reality for small business owners. Think of how Priceline transformed travel, or Zillow has transformed home buying – we believe small business financing can be ongoing and friction-free. We’re excited to continue to bring new products to market for our customers and really be a partner to small businesses throughout their entire lifecycle.
What’s next for Zhengyuan Lu?
My main focus on the capital markets side is to build the most durable and scalable financing platform to ensure that small business can always have access to capital from OnDeck. We have made significant progress over the last couple of years, and the work is never done.
What do you do for fun outside of work?
I am an avid traveler. We started a summer tradition of seeing a new country every year since my youngest turned 4, and he is 11 now. I am also addicted to running on the weekends. I think running is therapy for the mind.
Do you have any favorite restaurants?
I live in Chappaqua, and we love Le Jardin Du Roi in town, a small family owned French bistro. They serve very rustic French food that brings you back to south of France, and they always treat you like a family.
Do you have any unusual talents?
When my kids were little, I started learning small magic tricks to amuse them. I kept it going over the year so I have accumulated a lot of magic tricks.