In a sign that alternative finance for small business owners is increasingly going mainstream, OnDeck Capital is reportedly readying for an initial public offering.

News of the deal, which is expected to fetch $200 million for OnDeck and value the company at $1.5 billion, was reported in the Wall Street Journal Friday. Underwriters for the offering, which will reportedly occur before the end of the year, include JPMorgan Chase, Morgan Stanley, and Deustche Bank. 

The alternative finance company uses an online platform to assess and underwrite small businesses seeking capital. It's part of an increasingly crowded field of companies that have leapt into small business financing since the great recession, at a time when banks largely abandoned the territory for fear of risk.

Lending Club, the biggest peer-to-peer lending company for individual borrowers, also announced plans to go public later this year. It expects to raise $500 million in a deal that could value the company at $4 billion. Lending Club has similarly gotten into business loans recently.

OnDeck's other competitors include Biz2Credit, Kabbage, and Lendio, among a host of others. Such alternative finance business have something common: their non-traditional methods of underwriting, which can include assessing business owners' daily checking account balances or payment histories to vendors, rather than the traditional FICO credit scores that banks use. 

Alternative lenders claim their methods enable them to make quicker, more accurate decisions. But the loans can be expensive for businesses; repayment terms can often be on a daily basis, or have high periodic interest rates of 40 percent or more.

OnDeck says it analyzes more than 2000 data points, which could include real time cash flow and customer reviews, to arrive at a financing decision within minutes.

OnDeck was ranked 302 on the Inc. 500 list for 2012. At the time, it reported revenue of $20 million, and had a compound annual growth rate of more than 1200 percent. Since its founding by chief executive Noah Breslow in 2006, the New York company has raised $180 million in venture backing from sources as varied as Google Ventures, Paypal co-founder Peter Thiel, and former American Express chief executive James Robinson III.

OnDeck, which did not return a request for comment, claims to have provided more than $1 billion in financing to small business owners over the last 7 years.

David Goldin, president and chief executive of AmeriMerchant, a competing company in New York, which provides merchant cash advances and working capital loans to small business owners online, cheered the news as validation of the industry. 

"This industry is expanding, and the OnDeck IPO shows that Wall Street is now taking this industry seriously," Goldin says.