[CreditGuy]

That isn't the case for those who actually know the space. There are brokers who have a lower bad debt than their own in house sales teams........

It has nothing to do with loan performance and everything to do with reputational risk. A broker shop that funds $5M in volume with a 3% bad rate is still someone a public company shouldn't be associated with when the principals have been sanctioned by the SEC, had their NASD certs revoked, been convicted of securities fraud, etc..

[jotucker1983]

I disagree with the notion that just because they are a public company, that they shouldn't employ Independent Contractors to resell their services. On Deck just released a new agreement as everyone knows that includes an extensive background check on their brokers in question, which is what I think every single company (public or not) in this space ought to be doing. Everybody that's out reselling these loans/advances ought to go through a background check and be subject to penalties for breaking the law/committing fraud just as a W2 employee would be.

Investors are investing in On Deck Capital's platform, portfolio, and philosophy, not the shop of the broker, which usually isn't exclusive to On Deck in the first place.

[Guy In The Know]

It has nothing to do with loan performance and everything to do with reputational risk. A broker shop that funds $5M in volume with a 3% bad rate is still someone a public company shouldn't be associated with when the principals have been sanctioned by the SEC, had their NASD certs revoked, been convicted of securities fraud, etc..

Correct, it has to do with the pricing the brokers charge (not the loss rates) and the general sketchball factor.