OnDeck began offering loans to small businesses in 2007. Since their founding, they have lent over $4 billion to over 700 industries. Today, OnDeck is one of the top sources for business term loans and business lines of credit.
In addition to having a generally positive reputation among borrowers, was #11 on Forbes ‘100 Most Promising Companies’ List in 2014. People who have taken out business loans with OnDeck have left positive reviews on our site. You can scroll to the bottom of the page to read what people are saying.
OnDeck caters to a variety of industries – the company has lent to over 700 industries to date. While the minimum credit score is 500, typical borrowers have a credit score over 600. The average borrower has also been in business for about 7 years and makes roughly $600k/year. OnDeck loans are perfect for people who need cash fast – they take 2 business days to fund. OnDeck will loan you about 15% of your annual revenue at a time.
Short term loans from OnDeck (3-12 months) are typically used for seasonal industries, marketing, and inventory / everyday expenses. Longer term loans from OnDeck (15-36 months) are used more for expansion, franchising, and new equipment / product purchases.
- In business for 1+ years
- Making $100k+/year
- 550+ credit score
- No bankruptcies in the last 2 years
OnDeck provides loans to businesses that have been in operation for at least twelve months or longer. They have become a financial outlet for businesses that are not able to obtain assistance otherwise. Other benefits of the platform include:
OnDeck makes applying for a business loan quick and straightforward. Business owners simply upload qualifying documents to OnDeck and wait 1 business day to hear if they have been approved. Business owners can also apply over the phone, but will need to send their qualifying documents at a later time.
OnDeck’s requirements are transparent and comparatively low. Banks and many other alternative lenders typically do not consider customers with a personal credit score of 500. Most of these lenders also require your business to be at least 2 years old. Lower qualification requirements open the door for more business owners to receive critical funding and grow their business.
Before applying for a loan with OnDeck, they show you the exact minimum qualifications your business needs to meet:
- 500 personal FICO score
- 1 year in business
- $100k in annual revenue
- Established in the U.S., Canada, and soon Australia
Fast Access to Cash
Business owners looking for fast access to cash will find it with OnDeck – they provide funding in 24 hours. Small businesses can generally fill out the online application within ten minutes, and owners will know if they have been approved instantly (in most cases).
No Prepayment Penalties
OnDeck does not have prepayment penalties, and in fact, offers prepayment benefits with a discount to the outstanding interest. OnDeck has a 2.5% origination fee on the first loan, but this fee is reduced to 1.25% on a subsequent loan or refinancing and waved to 0% thereafter.
While OnDeck has helped a number of businesses get the financial help they need to get off the ground, there are some drawbacks that should be pointed out. These limitations include the following items:
Exact Rates are Unknown
Compared to banks and some other alternative lenders, OnDeck has high borrowing rates. With OnDeck, the APR is anywhere from 19.99% to 39.99%.
In addition to having high rates, OnDeck’s actual rates may be hard to find. Their website contains contradictory information stating that interest rates start at 5.99%, the average interest rate is 15%, the average interest rate for a 12-month loan is 25%, and in general, most loans fall between 18-36%. For this reason, when we calculated the cents on the dollar for a $100k loan over 12 months, we took the highest interest rate we found (36%) to prepare business owners for the worst case scenario.
When you take out a loan with OnDeck, they place a general lien on your business’ assets and require a personal guarantee for the loan. While we agree that a general lien on your business’ assets protects both the borrower and the lender, a personal guarantee is a concern. If you are unable to pay your loan and your business assets do not cover the debt, OnDeck can assume your personal real estate and bank accounts.
Finally, OnDeck financing charges an origination fee, although they are very upfront about it. Here is what you will pay in origination fees:
- 2.5% on your first loan
- 1.25% on your second loan
- 0% on any additional loans
*Star Rating is determined by evaluating APR range, minimum credit score requirement, revenue requirement, length in business requirement, and other related approval data.
Frequently Asked Questions
How long will it take to receive funds from OnDeck?
Kabbage is able to have funds available for you to start using within approximately 2 days.
Does OnDeck require collateral with its loans?
OnDeck does require some form of personal and business collateral in order to receive a loan.
Does OnDeck have prepayment penalties?
OnDeck does not have any prepayment penalties if you were to pay ahead of schedule.
Does OnDeck charge origination fees?
OnDeck does charge an origination fee. This fee will be 2.5% or less.
Does OnDeck charge closing fees?
OnDeck does not charge a closing fee.
How can I contact OnDeck?
You can contact them by calling or by visiting OnDeck’s site and filling out their loan application.
Types of Loans Offered
- Short Term Business Loans – $5,000 to $250,000
- Long Term Business Loans – Up to $500,000
- Lines of Credit – Up to $100,000
5.99% to 36%
- 3-12 months for short term loans
- 15-36 months for long term loans
The Borrowing Process
See if you qualify for a business loan from OnDeck within seconds on the company’s homepage. Based on your answers to these questions, OnDeck will let you know right away if you do not require, or if you may proceed. If you meet the basic requirements, you will be asked to answer questions about your business, yourself, your financing needs, and your bank statements. After filling out all of this information, you could know within minutes if you qualify.
OnDeck is one of the fastest business loans in the alternative lending space. The application takes less than 5 minutes, and you’ll hear back if you prequalify almost instantly. Funding is often available in two business days.
First, OnDeck wants to know how much money you need to borrow, when you need funds, and how you plan on using your loan.
You will then need to answer questions on the following:
- Your business
- Your personal information / finances
- Upload bank statements.