What we like:
Short minimum term length
|Estimated APR||9.99% – 99.00%|
|Loan Amounts||$5,000 – $500,000|
|Term Lengths||3 – 36 months|
|Origination Fee||2.5% – 4%|
The rating in the box above covers all of OnDeck’s small business financing products. The product information in the box above is only about the term loan product.
OnDeck is a financial services company that focuses on the business lending market for small to mid-sized companies. They offer various lending products to business owners to assist with a variety of funding needs. The specific offerings to businesses are based on the borrowing company’s performance, not simply personal credit history. As a technology-based platform, OnDeck serves business owners in all 50 states through a streamlined application, underwriting, and approval process all completed online.
Currently, OnDeck offers both business loans and lines of credit to qualified customers, with various repayment terms and borrowing costs inherent to each product. Regardless of the product selected, business owners can submit an application through OnDeck’s online platform in as little as 10 minutes, and for the most qualified borrowers, approval and funding can be received within as little as one business day.
Business Term Loans by OnDeck
OnDeck is best known for its business owner loans. The business loans are either short-term, with repayment terms ranging from 3 to 12 months, or long-term, with repayment terms ranging from 15 to 36 months.
For short-term loans, the funds are typically used for smaller, immediate business financing needs, including updates to a physical location, inventory deals, marketing campaigns, or seasonal hiring. OnDeck short-term loans offer a fixed, simple interest rate currently as low as 9 percent. Repayment may take place on a weekly or daily basis, depending on the length of the loan and the overall evaluation of the borrower and their business.
For longer-term loans offered through OnDeck, borrowers may use the funds for a myriad of lengthier financing needs. These may include expanding a product or service line, establishing a new location, large inventory purchases, buying equipment, or developing a new product or service. Long-term business loans through OnDeck currently have a fixed interest rate as low as 9.99 percent, and repayment may take place on a weekly or daily basis.
Both short- and long-term business loans from OnDeck have an origination fee, ranging from 2.5 to 4 percent of the amount borrowed. For subsequent loans, business owners may incur a lowered origination fee, ranging from 1.25 to 3 percent of the loan amount for a second loan, and 0 to 3 percent of the loan amount for a third loan. There are no prepayment penalties with OnDeck fixed loans, and interest rates are determined based on the total amount borrowed and a full assessment of the information included in the application. Depending on the length of the loan, business owners may borrow up to $500,000.
Business Lines of Credit by OnDeck
In addition to short- and long-term fixed loans, OnDeck has started offering business lines of credit to qualified borrowers. With a business line of credit, business owners have access to a revolving credit line, up to certain limits, which can be used over and over again as the business financing needs change over time. Credit lines offered by OnDeck may extend up to $100,000 for the most qualified borrowers, with interest rates currently as low as 13.99 percent.
With the flexible line of credit from OnDeck, business owners only pay back the amount they use through fixed weekly payments. Line of credit payments are deducted automatically from the business owner’s business bank account each week. There is a $20 monthly maintenance fee for using an OnDeck line of credit. However, that is waived for six months if a draw of $5,000 or more is made in the first five days after establishing an account. There are no fees to draw money on the business line of credit. The credit line maximum and the interest rate are determined based on the creditworthiness of the borrower.
The application process requires inputting information like the name of the business, the industry in which the business operates, financial details of the business, and personal information about the owners applying for a loan or line of credit. The financial needs of the business and bank statements are required as part of the application process as well. Once these details are received, OnDeck reviews the information and offers an approval or a request for additional information from the borrower.
The benefit of working with OnDeck for a business loan or line of credit is this simplified application process and fast turnaround time for approval. Unlike traditional bank loans offered by conventional financial institutions, OnDeck has worked diligently to provide an easy, fast process to benefit business owners when they truly need it.
OnDeck Loan Qualifications and Restrictions
All business owners should apply through OnDeck’s online platform, and they are evaluated based on a similar set of criteria put in place by the company. For both business fixed loans and flexible lines of credit, the borrower must have been in business for at least one year, with a minimum of $100,000 in annual revenue over the past 12 months. For fixed loans through OnDeck, business owners must also have a personal credit score of at least 500; business line of credit applicants must have a personal credit score of at least 600 to qualify.
Nearly all businesses that meet these credit guidelines are eligible to receive funding through an OnDeck business loan or line of credit. However, the company does have some restrictions as far as the industries with which it will work.
Currently, OnDeck does not work with financial services or investment firms, including banks, credit unions, mortgage lenders, and non-bank finance companies. The lender also excludes business owners operating in adult entertainment, gambling, drug dispensaries, as well as guns and ammunition sales or manufacturing. OnDeck also excludes vehicle sales businesses, sellers (like pawn shops and flea markets), administrative outsourcing, and government and non-profit organizations. A full list of restricted industries may be viewed here.
The History of OnDeck
OnDeck has been in operation since 2007, and has grown into a publicly traded company funding billions in loans and serving more than 700 industries. The company has deep roots in the business community, and it was founded on the premise that small to mid-sized businesses needed another method to secure financing to grow and prosper.
The business lender is headquartered in New York City, and it provides loans to qualified borrowers in the U.S., Canada, and Australia. Depending on the location of the business owner borrowing the funds, an OnDeck loan may be issued by Celtic Bank which is a Utah-chartered industrial bank that is an FDIC member.
Customer Experience With OnDeck
OnDeck continues to be a major player in the online lending space, specifically focused on United States, Canadian, and Australian business owners who may not be able to easily qualify for a traditional business loan from a bank or credit union.
The company has been in business for more than a decade, giving it ample time to accrue reviews from business owners around the world. OnDeck currently holds a Better Business Bureau Accreditation, with a rating of A+,and it has a composite score of 4.55 out of 5 from customer reviews submitted to the BBB.
In addition to being accredited by the Better Business Bureau, OnDeck is also listed on TrustPilot, an online rating service provided to the public to ensure transparency in companies throughout the world. OnDeck currently has a rating of Excellent on TrustPilot, based on more than 1,000 customer reviews. The composite TrustScore of OnDeck is 9.66 out of 10.
OnDeck is a leader in its marketplace, serving hundreds of thousands of business owners since its inception. Through a short- or long-term fixed business loan, or a flexible business line of credit, OnDeck customers have access to the financing they need in as little as one business day. OnDeck has less stringent requirements than a conventional bank lender, making it easier for business owners from nearly all credit and revenue categories to qualify for financing.4.12 OnDeck Small Business Financing