Compare Small Business Loans
If you’re thinking about getting a small business loan from OnDeck or Lending Club, we’ve compared both lenders below. Generally speaking, we prefer OnDeck for borrowers who want term loans over $300,000 or who cannot meet some of the eligibility criteria at other lenders. Lending Club is a better fit for borrowers who want longer terms, larger lines of credit or a monthly payment schedule.
- OnDeck vs. Lending Club Summary
- When to Use OnDeck Over Lending Club
- When to Use Lending Club Circle Over OnDeck
- How to Choose Between the Two
OnDeck vs. Lending Club Summary
In general, we recommend OnDeck for business owners who want loans of more than $300,000 or who may not be able to meet specific time in business or credit requirements at other lenders. Lending Club, on the other hand, is better for borrowers who want longer terms, larger lines of credit or monthly repayment schedules.
|Minimum Age of Business||12 months||24 months|
|Minimum Annual Revenue||$100,000 in annual revenue||$75,000 in annual revenue months|
|Minimum Credit Score||500||620|
|Loan Amount Range||$5,000 - $300,000|
|APR Range||7.77% - 35.11%|
|Funding Time||As fast as 24 hours||7+ business days|
|Apply Now||Apply at OnDeck||Apply at Lending Club|
When to Use OnDeck Over Lending Club
OnDeck may be a better option than Lending Club if:
- You own a business that is not yet 2 years old
- You have a lower credit score
- You want a term loan for more than $300,000
We recommend OnDeck for borrowers who may have a newer business or a lower credit score. In terms of age of business and credit score requirements, OnDeck is more lenient than Lending Club. To qualify for an OnDeck loan or line of credit, you’ll need to be in business only one year and have a minimum personal credit score of 500. In comparison, Lending Club requires borrowers have at least fair or better credit, which is generally any score above 620, and businesses be at least two years old. For both lenders, borrowers will need to show somewhat substantial annual revenue of at least $100,000 at OnDeck or $75,000 at Lending Club.
OnDeck is also better for borrowers who want term loans of more than $300,000. OnDeck makes term loans from $5,000 to $500,000 with terms from three months to three years while Lending Club only provides term loans up to $300,000. When compared to other online lenders, OnDeck offers some of the highest loan amounts. If you need even more than $500,000, we suggest borrowers consider a traditional bank or SBA loan. These loans can range up to several million dollars or more and can be used to finance large-ticket expenses, such as real estate purchases or business acquisition.
When to Use Lending Club Over OnDeck
Lending Club is a better option than OnDeck if:
- You want longer terms on your loan or line of credit
- You want a line of credit for more than $100,000
- You want a monthly repayment schedule
For borrowers who want longer terms on their loan or line of credit, we recommend Lending Club over OnDeck. This is because Lending Club offers terms from one to five years for loans and 25-month terms for lines of credit. At OnDeck, you can only get terms from three months to three years on loans and six months on lines of credit. We also recommend Lending Club for borrowers who want a line of credit over $100,000. Through Lending Club, you can take out a line of credit from $5,000 to $300,000, whereas OnDeck only provides lines up to $100,000.
Finally, Lending Club provides a standard monthly repayment schedule for both loans and lines of credit. This type of repayment schedule is the same as what you would find with a conventional bank or SBA loan or line of credit. Many online lenders, OnDeck included, will require more frequent repayment, which is not ideal for all types of businesses. OnDeck, for instance, requires borrowers make either daily or weekly payments on loans and weekly payments on lines of credit. For businesses with inconsistent cash flow cycles, this could be an issue. However, if your business’s cash flow cycle is steady, you may prefer smaller, more frequent payments.
How to Choose Between OnDeck and Lending Club
OnDeck and Lending Club have different eligibility criteria, so you first need to think about where you can reasonably qualify for a loan. Lending Club, for instance, has higher time in business and credit requirements than OnDeck, requiring businesses to be at least two years old and borrowers to have credit scores of at least 620. OnDeck only requires businesses to be one year old and borrowers have a credit score of 500 for a loan or line of credit. Both companies have hard annual revenue requirements: Lending Club requires $75,000 and OnDeck requires $100,000. In addition, Lending Club requires that borrowers own at least 20% of the business.
Next, think about the actual terms of the loan you want. How much money do you need? Do you need a term loan or a line of credit? How long and how frequently do you want to repay? Answering these questions will help you decide which product from which company is the best fit for your business. Lending Club offers longer terms on loans and lines of credit, monthly repayment schedules and larger lines of credit up to $300,000. OnDeck, in contrast, offers larger term loans up to $500,000, weekly or daily repayment schedules, and shorter terms up to three years.
Be sure to pay attention to any fees charged by the lender. Both OnDeck and Lending Club charge origination fees, with higher origination fees coinciding with higher interest rates. OnDeck, however, offers reduced rates on origination fees if you take out more than one loan with the lender. This can be an attractive perk if you plan on taking out multiple business loans. And unlike some bank and SBA loans, neither lender charges a prepayment penalty, so you can pay off your loan balance early and save on interest costs.