OnDeck

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OnDeck began offering loans to small businesses in 2007. Since their founding, they have lent over $5 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, OnDeck 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.

Typical Borrowers

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 seven years and makes roughly $600k/year. OnDeck loans are perfect for people who need cash fast - they take one business day to fund. OnDeck will loan you about 15 percent of your annual revenue at a time.

Best Uses

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.

Minimum Qualifications

  1. In business for one or more years
  2. Making $100k+/year
  3. 500+ credit score
  4. No bankruptcies in the last two years

The Good

  • Easy application
  • Low requirements
  • Fast access to cash

Easy Application

OnDeck makes applying for a business loan quick and straightforward. Business owners simply upload qualifying documents to OnDeck and wait one 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.

Low Requirements

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 two 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
  • One year in business
  • $100k in annual revenue
  • Established in the U.S., Canada

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. In fact, OnDeck offers prepayment benefits with a discount to the outstanding interest. OnDeck has a 2.5 percent origination fee on the first loan, but this fee is reduced to 1.25 percent on a subsequent loan or refinancing and waved to 0 percent thereafter.

Learn more about OnDeck

The Bad

  • Exact rates are unknown
  • Personal guarantee
  • Fees

Exact Rates are Unknown

Compared to banks and some other alternative lenders, OnDeck has high borrowing rates. With OnDeck, the APR is anywhere from 5.99 percent to 30 percent. 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 percent, the average interest rate is 15 percent, the average interest rate for a 12-month loan is 25 percent, and in general, most loans fall between 18-36 percent. 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 percent) to prepare business owners for the worst case scenario.

Personal Guarantee

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.

Fees

Finally, OnDeck financing charges an origination fee, although they are very upfront about it. Here is what you will pay in origination fees:

  • 2.5-4 percent on your first loan
  • 1.25-3 percent on your second loan
  • 0-3 percent on any additional loans

The Bottom Line

OnDeck is a good alternative lending source for small businesses that does not qualify for an SBA or bank loan. It will be difficult for you to find a company that is more upfront about their loans. If you meet the minimum application requirements, we strongly recommend you consider OnDeck for a business loan. The company makes applying for a loan easy, has flexible term lengths and amounts, and reasonable qualification requirements. See if you qualify

4 OnDeck Reviews

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  • User Score

    3

    August 25th, 2016 Renton, WA

    Be careful with Ondeck fine print. Please make sure you completely understand what you are getting into. Here are some learnings for me: 1. Don't get tempted by fast funding. While Ondecj was superbas the in funding, they had some fine print which caused problems later. 2. They will charge interest on the day you take the loan. For example, if you take 40k loan with interest of 19% , on day 1 of your loan, you are legally obligated to pay 47,600$ 3. Record all your conversations and deal with only Ondeck employees and no third party. 4. Don't fall into the trap of reducing interest rates in 6 months. They will not reduce the interest rates no matter how well you pay off the loan

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  • User Score

    10

    June 15th, 2015 Washington, VA

    I spent lots of time trying to get financing for my three businesses and when I finally came across On Deck I was able to get the funding I wanted, quickly, without the typical hassles of endless paperwork and the funding came through just as promised.

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  • User Score

    10

    June 15th, 2015 Pleasant Grove, UT

    We are a truly small company with no working capital and not enough cash flow to get a loan from our own bank. OnDeck reviewed our bank statements and tax returns along with our application (a simple one!) and we had a loan within a few days. It wasn't huge but it helped us get a new piece of much needed equipment. These folks are not running a scam. The terms of the loans are simple and easy to understand and the process goes like they say it will. If you have a small business and need a small to medium sized loan, check it out.

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  • User Score

    10

    June 12th, 2015 UT

    OnDeck helped me get the money I needed for some long overdue construction projects. I really didn't want to dip into my savings for the project or mess up my cash flow. OnDeck helped out in every way. The process was easy and the people I dealt with were professional and top notch. Thanks a million

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