OnDeck Small Business Loan Review: Rewards for Repeat Borrowers and Fast Funding

We recommend OnDeck for borrowers with fair or better credit, for business owners looking to do their borrowing in one place and for borrowers who need money quickly.

Editor's Rating

4.0

Good for

  • Businesses that need funds quickly
  • Business owners with fair to average credit scores
  • Repeat customers

Bad for

  • Startups or new businesses
  • Businesses with low annual revenue

OnDeck Small Business Loan Review: Rewards for Repeat Borrowers and Fast Funding

We recommend OnDeck for borrowers with fair or better credit, for business owners looking to do their borrowing in one place and for borrowers who need money quickly.

Good for

  • Businesses that need funds quickly
  • Business owners with fair to average credit scores
  • Repeat customers

Bad for

  • Startups or new businesses
  • Businesses with low annual revenue

Editor's Rating

4.0

OnDeck Small Business Loan Review: Rewards for Repeat Borrowers and Fast Funding

Editor's Rating

4.0

Good for

  • Businesses that need funds quickly
  • Business owners with fair to average credit scores
  • Repeat customers

Bad for

  • Startups or new businesses
  • Businesses with low annual revenue

OnDeck is a great choice for borrowers who need money quickly or those with only fair to average credit scores. OnDeck provides loans and lines of credit up to $500,000 and $100,000, respectively, with funding in as fast as one day. APRs range from 9.3% to 99.7% on loans and 13.99% to 39.9% on lines of credit. Terms are three months to three years on loans and six months on lines of credit. We also recommend OnDeck for borrowers looking to establish a relationship with their lender as OnDeck offers discounts on fees and interest rates to repeat borrowers.

OnDeck Review: Who Should Apply?

We recommend OnDeck for borrowers with fair or better credit, for business owners looking to do their borrowing in one place and for borrowers who need money quickly. OnDeck provides term loans and lines of credit up to $500,000 and $100,000 respectively. APRs range from 9.3% to 99.7% on loans and 13.99% to 39.9% on lines of credit.

Good for...Bad for...
  • Businesses that need funds quickly
  • Borrowers with fair or better credit
  • Repeat customers

  • Startups or new businesses
  • Businesses with low annual revenue

The Pros of OnDeck

One major selling point of OnDeck is the benefits afforded to repeat customers. If you want to do your small business borrowing in one place, we’d recommend that you consider OnDeck. Provided your previous loans were in good standing, you may be able to qualify for a lower interest rate on each new loan you take out with OnDeck. OnDeck also provides discounts on the origination fee with each additional loan you take out. While the origination fee on your first loan will be 2.5% to 4%, origination fees decrease to 1.25% to 3% on your second loan and to 0% to 3% on any subsequent loans. To take out another loan with OnDeck, you must have repaid at least half of the balance of your existing loan, and you cannot have any delinquent payment history with the lender.

Another feature we like about OnDeck is the speedy funding time. Completing an online application and qualifying only takes a few minutes, and if you are approved for a loan, you can receive funds in as quickly as 24 hours. This makes OnDeck a great option for business owners who need money in a pinch. OnDeck is also available to businesses in all 50 states and Canada (excluding Quebec Province).

The Cons of OnDeck

Average APRs at OnDeck are high. According to the company’s most recent quarterly filing, the average APR was 32.1% for a line of credit and 43.2% for a business loan in Q2 of 2017. While lower APRs are available, only borrowers with very strong credit profiles and business financials will qualify for these rates. Because the criteria to qualify at OnDeck is more lenient than at a traditional bank and the funding time is faster, APRs will naturally be higher to reflect this. Most banks won’t lend to businesses that have low annual revenue or are less than two years old, and they may require a lengthy application process. Banks also tend to have strict credit requirements, but this means that banks have very competitive interest rates if you can qualify. You will need to decide if the tradeoff between a low APR and convenience is worth it.

If the thought of making daily or weekly repayment bothers you, we wouldn’t recommend getting a loan from OnDeck. You can only make weekly or daily payments at OnDeck (weekly for a line of credit and your choice between the two for a term loan), and while this can be good for some types of businesses, it is not suitable for all, especially if it will negatively impact your cash flow.

Finally, OnDeck does not lend to businesses in the certain industries. For a complete list, see the OnDeck website.

Final Thoughts

We think OnDeck is a great choice for borrowers looking to establish a relationship with their lender and for those who want speed and convenience. OnDeck rewards repeat borrowers by reducing origination fees and interest with each subsequent loan -- and the lender reports your activity to business credit agencies to help build your business credit score. The lender also offers insanely fast funding times, getting borrowers funds in as fast as 24 hours. However, if you can afford to wait for funds, we suggest you shop around to get the best deal as average APRs at OnDeck are quite high. And finally, if you can’t afford to make weekly or daily payments, an OnDeck loan is not right for your small business.

Eligibility Criteria

To qualify for an OnDeck business loan or line of credit you and your small business must meet the following criteria:

Minimum RequirementsAverage Borrower Profile
Age of business1 year7 years
Annual revenue$100,000$450,000
Credit score500660

In addition to these requirements, OnDeck does require borrowers personally guarantee the loan, and OnDeck will file a blanket lien against the business, but there are no specific collateral requirements.

Business Loans and Lines of Credit Features

OnDeck offers both term loans up to $500,000 and lines of credit up to $100,000.

Business Loan Features

OnDeck has both short-term and long-term loans. Short-term loans have maturities of one year or less, and long-term loans have maturities from 15 to 36 months. On short-term loans, rates are quoted as a total interest percentage, which is the same as fixed simple interest. For instance, a short-term $10,000 loan with a 10% simple interest rate means you would pay $1,000 in interest, for total payback of $11,000. Long-term loan rates are quoted as an annual interest rate, which is similar to an APR but does not include fees.

Loan Amount Range$5,000 - $500,000
APR Range9.3% - 99.7%
Fees
  • Origination fee: 0-4%
  • No prepayment penalty
Loan Terms3 - 36 months
Repayment OptionsDaily or weekly fixed payments

Line of Credit Features

OnDeck offers a flexible line of credit with terms of six months and amounts up to $100,000.

Line Amount Range$6,000 - $100,000
APR Range13.99% - 39.9%
Fees
  • Monthly maintenance fee: $20 (can be waived)*
  • No prepayment penalty
Line of Credit Terms6 months
Repayment OptionsWeekly fixed payments

*Can be waived for six months if you draw $5,000 within first 5 days of having an account.

Application Process

OnDeck has a streamlined online application process. To complete the application, you will need to fill in details about the loan you are seeking and provide some information about your business, including your business tax ID, estimated gross annual revenue and average bank balance. You will also need provide personal information, such as name, address and phone number. You will be required to make an account with OnDeck during the application process.

OnDeck Application Process
OnDeck Application Process

Once you sign the application and electronic-signature agreement, you will find out if you qualify for a loan within a few minutes. If you are approved, a loan specialist will contact you via phone to confirm your eligibility. You will need to provide bank statements for the past three months and your driver’s license information to verify your identity and business information. Funds will be deposited into your account in as little as 24 hours.

How Does OnDeck Compare to Other Online Lenders?

While OnDeck has its advantages, you may be looking for online lenders that have more flexible terms and repayment options. Let’s take a look at the competition.

OnDeck vs. Funding Circle

We recommend Funding Circle over OnDeck if you want monthly repayment or longer loan terms up to five years or if you can afford to wait to qualify for a lower rate. Funding Circle provides term loans up to $500,000 with APRs between 8% and 33% and terms from one to five years. While Funding Circle has stricter eligibility criteria and slower funding times than OnDeck, it does have lower average APRs. To qualify, you’ll need to be in business at least two years with $150,000 or more in annual revenue. Your business must also show profitability for the past two years and be registered as an LLC or incorporated. You will need a personal credit score of 620 or higher, and you must personally guarantee the loan. Because funding can take up to 10 days, we suggest borrowers looking for fast cash apply with OnDeck.

OnDeck vs. Lending Club

Similar to Funding Circle, we suggest a Lending Club business loan if you want longer terms, want monthly repayment or can afford to wait for a lower rate. Lending Club offers both business loans and lines of credit up to $300,000 with rates between 7.77% and 35.11%. The average APR at Lending Club is around 13%. Terms on the loan range from three months to five years, and terms for the line of credit are 25 months. If you want to take out a loan through Lending Club, you’ll need to be in business at least two years with $75,000 in annual revenue. Lending Club also prefers if you have a personal FICO score of 620 or above. You will also need to own at least 20% of the business and personally guarantee the loan. Lending Club is a peer-to-peer lender, so funding can take anywhere from two to 14 days.

OnDeck vs. Kabbage

We’d recommend a Kabbage loan if your credit score or business’s annual revenue prevent you from qualifying for an OnDeck loan. While Kabbage only offers a line of credit, the criteria to qualify are very straightforward: you’ll need to be in business one year with at least $50,000 in annual revenue to qualify for up to $100,000 (to qualify for up to $150,000, you'll need to be in business three years with $500,000 in annual revenue). There is no minimum credit score needed to be eligible, and Kabbage places an emphasis on evaluating your business’s revenue and financial history when approving you for a loan. The lender will look at your online banking, bookkeeping, vendor and social media accounts when considering your loan application. You can borrow up to $150,000 through Kabbage with terms of six or 12 months and APRs between 20% and 80%. Repayment is monthly, and there are no prepayment penalties.