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Compare Kabbage vs. OnDeck business financing

Both are top online lenders, but which can support your business needs more easily?

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Aliyyah Camp
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Maybe this situation sounds familiar: Your business is doing well, but you can’t seem to push it into the next level. Taking out a business loan could give you the boost you need to increase your inventory, pay for advertising or set up a website that kicks things up a notch.

The good news: The Internet’s changed the game when it comes to business financing. Which means you’re not stuck with the rigid, slow process you’ll get with your local bank.

Instead, you’ll find a range of online providers working hard to earn your business with fast decisions that look beyond your credit score when deciding how much they can provide. We take a look at how the non-bank business lenders, Kabbage and OnDeck, compare.

Winner snapshot

Kabbage logoOnDeck logo
Funding speedTieTie
Reputation
  • Winner
Lending limits
  • Winner
Costs
  • Winner
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Overview of Kabbage and OnDeck

When it comes to the basics, Kabbage and OnDeck offer similar products: financing with low rates and online applications for fast funding to qualified businesses. Both consider your business’s cash flow and performance — as well as your credit score — when coming to a decision on your loan amounts and terms.

Founded in 2008, Kabbage can approve you for a revolving business line of credit without tapping into your cash flow. You can often get a decision on your application in minutes, with loans available in all 50 states.

OnDeck was founded a year earlier, and it too works to help small businesses. But rather than limiting your options to a line of credit, OnDeck also offers business term loans of up to $250,000. Like Kabbage, OnDeck’s services are available nationwide and offer quick decisions with funding typically available in one business day.

Loan requirements

Both online lenders have some overlap when it comes to eligibility: Your business must have been up and running for at least a year, for example. But OnDeck requires a higher minimum annual business revenue for approval, which could shut out smaller businesses.

Get a business loan with Kabbage if:

  • You’ve been in business for at least a year.
  • Your business brings in at least $50,000 annually or had revenue of at least $4,200 per month in the last three months.

Unlike OnDeck, Kabbage claims that you can improve your eligibility by opening up your checking and other business accounts to its review.

You’re eligible for a business loan with OnDeck if:

  • You’ve been in business for at least a year.
  • Your business brought in at least $100,000 in revenue last year.
  • The majority business owner has a personal credit score of at least 600.

Which lender can get me money faster?

Kabbage and OnDeck offer similar online applications that are easy to complete for nearly instantaneous decisions. Their differences come down to funding turnaround — or when you can actually start accessing your approved funds after approval.

Kabbage

Kabbage offers a simple approval process from application to funding — and all online. To start, you create an account with your email and password, telling Kabbage the name of your business and your industry. You then link your business accounts — such as PayPal, eBay, Amazon or QuickBooks and more — and provide additional details.

It typically takes only a few minutes for you to learn whether you’re approved and how much you’ve qualified for. Once you accept a contract, Kabbage makes your line of credit available to you online within a few days.

OnDeck

OnDeck’s online application is also quick and simple — and doesn’t require a lot of paperwork. Once you’ve submitted your personal, business and financial details, you could see a decision in minutes. Then simply accept the loan contract to see your funds in your online account in one to five business days, depending on the type of loan you choose.

  • Winner: Tie

    You’ll find easy-to-complete applications, quick decisions and fast funding with both online lenders.

Which has a better reputation?

Kabbage

Looking at Trustpilot, we found 3,000 reviews from users who score Kabbage an impressive 9.3 out of 10. More than 80% users rate it an excellent lender, some touting Kabbage’s minimal paperwork required for approval. Still, customers complain online about high monthly payments, despite the flexibility of a line of credit.

OnDeck

OnDeck has more than 850 reviews on Trustpilot, with a slightly better average of 9.4 out of 10. More than 90% users rate it an excellent provider. Customers appreciate OnDeck’s different approach to interest but complain rates that can be confusing to parse.

  • Winner: OnDeck

    OnDeck wins this category by a hair: Its average score is marginally better than that of Kabbage.

How much can I borrow with each lender?

Applying with either lender will not affect your credit, which means that you’re free to see what you qualify for, adding your potential rates and terms to your list of factors to weigh when comparing your options.

Kabbage

With a Kabbage business line of credit, you can apply for as much as you need — from $1,000 to $150,000.

OnDeck

OnDeck offers lines of credit of up to $100,000, or you can choose to borrow from $5,000 to $250,000 through an OnDeck term loan.

  • Winner: OnDeck

    While OnDeck’s lines of credit top out at $100,000 — $50,000 less than what you can get with Kabbage — you might want to see whether a business term loan of up to $250,000 might work better for your business needs.

Which lender offers more affordable financing?

For this category, it all comes down to breaking down heavy marketing. Technically, Kabbage doesn’t charge “interest” on its lines of credits. Instead, your loan is subject to a complicated fee structure that’s broken down by months and loan amount percentages. OnDeck’s a bit more transparent about what you’ll pay, expressing its fees more traditionally as APRs.

Kabbage

You won’t be charged interest for a Kabbage loan. But that’s more than made up for with a tricky fee structure that even we have trouble following.

Every month, you pay back an equal amount on your principal plus a monthly fee that can be up to 10% of your loan amount, depending on your creditworthiness. Fees are further broken down by six-month or 12-month terms, though you won’t pay this fee until you actually withdraw money.

For six-month business lines of credit, you’ll pay:

  • 1.5% to 10% of your principal for the first two months.
  • 1% of your principal for the remaining four months.

For 12-month business lines of credit, you’ll pay:

  • 1.5% to 10% of your principal for the first six months.
  • 1% of your principal for the remaining six months.

The upside is that you won’t pay origination fees or prepayment penalties, which gives you some room to save on fees by paying off your loan early.

OnDeck

Whether you take out a business line of credit or a short-term business loan, OnDeck charges an APR on your loan amount and a fee for the convenience. Business loan terms can be anywhere from three to 36 months, giving you flexibility to apply for only as much as you need for lower monthly repayments.

On its business lines of credit, you’ll get an average APR of 34.1% — the high end of its advertised APRs that range from 13.99% to 39.99%. Lines of credit also come with a high monthly maintenance fee of $20, but OnDeck will waive this fee for up to six months if you withdraw $5,000 or more from your LOC within five days of opening your account.

For a short-term business loan, you’ll pay from 9% to 99% APR — an incredibly wide range that prevents knowing what to expect. However, the average seems to be between 21.6% and 40.1% APR. Term business loans come with origination fees of 2.5% to 4% of the amount you borrow. These fees drop to between 1.5% and 3% for any second loan and to 0% to 3% for all subsequent loans (encouraging repeat borrowing, we might add).

  • Winner: OnDeck

    OnDeck offers business lines of credit and term business loans. Not to mention a more transparent way for you to fully understand what you’re looking at as far as interest and fees when repaying the loan.

Case study: Food truckin’: Chris takes out a $10,000 line of credit

Chris has run his food truck for just over 14 months when he notices that his sales take a major dip over winter since fewer people want to eat outside when it’s cold. He wants a 12-month $10,000 line of credit to make sure he can pay for supplies over the slow season.

Bypassing the hassle of his bank, he compares lines of credit offered by nontraditional online lenders Kabbage and OnDeck, looking at their fees and ease of use.

KabbageOnDeck
Fees1.5% to 10% fee of the principal for first 6 months and 1% of remaining principal for last 6 months.$20 monthly maintenance fee.
Ease of application
  • Easy online application.
  • Doesn’t require a credit check until after contract acceptance.
  • Easy online application.
  • Considers your cash flow in making its lending decision.

Chris finds that both lenders offer easy applications with fast turnaround, so he instead focuses on what he could face in interest and fees. With Kabbage, Chris first needs to break down his $10,000 into 12 monthly payments — about $835 a month. He’s finally able to figure out that he could pay from $150 to a whopping $1,000 a month in fees on top of his already high monthly payment for at least the first six months of his loan, which could drop to $50 or less for the remaining six months.

With OnDeck, Chris could pay $240 in fees over the life of the loan, along with up to $1,400 to $4,000 in interest, depending on how much he withdraws from his line of credit.

Chris ultimately makes his decision based on transparency, choosing OnDeck for its easy-to-understand rates and fees that make it easy to predict what he could end up paying over the life of his loan.

Compare other business loan lenders

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Name Product Filter Values Loan amount APR Requirements
Lendio business loans
Finder Rating: 4.75 / 5: ★★★★★
Lendio business loans
$500 – $5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.
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Biz2Credit business loans
Finder Rating: 4.7 / 5: ★★★★★
Biz2Credit business loans
$25,000 – $6,000,000
Starting at 6.50%
6+ months in business; $100,000+ annual revenue; 500+ credit score
Get only the capital you need through secure, prescreened lenders with this highly rated company offering SBA, expansion, working capital and other loans.
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ROK Financial business loans
Finder Rating: 4.7 / 5: ★★★★★
ROK Financial business loans
$10,000 – $5,000,000
Starting at 6%
Eligibility criteria 3+ months in business, $15,000+ in monthly gross sales or $180,000+ in annual sales
A connection service for all types of businesses — even startups.
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Fundbox lines of credit
Finder Rating: 4.2 / 5: ★★★★★
Fundbox lines of credit
$1,000 – $150,000
Not stated
6 + months in business, $100,000+ in annual revenue, 600+ credit score
Get flat rate, short-term financing based on the financial health of your business, not your credit score.
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Compare up to 4 providers

Bottom line

Kabbage and OnDeck are neck and neck when it comes to small business funding. Both are easy to use and can get you money quickly.

It can be easier for you to get short-term working capital with Kabbage, which doesn’t require as much business revenue to qualify. But given a complicated fee structure, it can also be difficult to know exactly how much you could pay over the life of your line of credit.

If you’re looking to borrow more than $150,000 for your business, OnDeck could be a better choice, but you’ll need stronger personal credit and higher business revenue for approval.

Ultimately, when looking for small business financing, it could help to compare your full range of options with other providers before making a decision.

See how other top business financing providers compare

LoanBuilder vs. OnDeck
BlueVine vs. Fundbox
Fundbox vs. Kabbage
OnDeck vs. Prosper
OnDeck vs. LendingClub

Frequently asked questions

How safe is it for me to borrow through Kabbage or OnDeck?

For safety, you’ll want to look at both user ratings and any technological safeguards a lender puts in place to protect your personal and financial information.

Kabbage is a safe, trustworthy direct business lender accredited by the Better Business Bureau since 2008. Its site is SSL encrypted and your funds are FDIC insured.

Like Kabbage, OnDeck is a direct lender with high user approval and accredited by the BBB since 2014. OnDeck uses Transport Layer Security encryption to protect your personal and financial information on its site.

What if I’ve only been in business for under a year?

With research, you can find lenders willing to provide loans to businesses in operation as few as six months, but these loans can come with high interest rates or require collateral. Another option is a personal loan, provided you meet the lender’s eligibility.

What’s the difference between a line of credit and a loan?

There are a few key ways term loans and lines of credit differ.

With a term loan, you’ll start paying interest toward the entire amount you borrow from the get-go. With a line of credit, you’ll have access to funds up to a specified limit, and you pay interest only on the money you withdraw from this line of credit.

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