If there's any doubt about the growth of alternative lending, look no further than the IPO market.
For the second time in two weeks, an alternative lending company has gone public. New York City-based OnDeck Capital rose in its debut earlier Wednesday on the the New York Stock Exchange. OnDeck Capital's shares opened at $26.50, and touched a high of around $28.
That's well above $20 the stock priced at late Tuesday. That level surpassed the forecasted range of $16 to $18. Based on late Tuesday's pricing, OnDeck Capital raised about $200 million from its IPO, valuing the firm at about $1.32 billion.
OnDeck Capital caters specifically to small businesses, and does not allow peer-to-peer investments. Instead it partners with distributors, from financial institutions to independent sales groups, to connect businesses to capital. Since its launch in 2007, OnDeck has deployed more than $1.7 billion in small business loans to 25,000 businesses in more than 700 industries.
Separately, Lending Club, a marketplace or peer-to-peer lender and among the largest in the industry, also went public last Thursday on the NYSE, pricing above the initially forecasted range of $15 and continuing to climb throughout the day.
Lending Club CEO Renaud Laplanche said on CNBC's "Squawk on the Street" that the company has the opportunity to transform the entire banking system, "making it more transparent, more cost efficient, more consumer friendly."
Both Lending Club and OnDeck illustrate the growth of the alternative lending market, despite low interest rates.