Small Biz: David vs. Goliath

Homemade gelato, shaving products for real men, and easy money: 3 companies try to find their niche among the giants.

On Deck vs. FICO
On Deck vs. FICO
The challenge: To loosen FICO's role in bank lending to small businesses.

What they did: : Small businesses have never had much luck with banks, largely because loan officers can't figure out if the businesses are creditworthy. Often such decisions are based on entrepreneurs' personal FICO credit scores. On Deck founder Mitch Jacobs, 39, is offering an alternative: a website that will give entrepreneurs an "On Deck score," which shows a business's ability -- not the owner's -- to repay its debts. The company will then be matched up with a lender through, one of several such matchmakers. Entrepreneurs can get scored free through the site. Jacobs's company, based in New York, expects to turn a profit by year's end. The company offers its own loans. But these deals don't come cheap: 18% to 36% interest rates for loans that range from three to 18 months.

By Elaine Pofeldt, contributor @FortuneMagazine - Last updated February 06 2012: 1:57 PM ET
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