Is OnDeck legit or a scam? What you need to know | finder.com

Is OnDeck legit or a scam?

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Find out what OnDeck offers small business owners to protect their personal and banking information when applying for a loan.

OnDeck is a safe, trustworthy direct business lender founded in 2007 and available in all 50 states. Read further to learn what to watch out for when getting a business loan through OnDeck.

OnDeck Small Business Loans

OnDeck Small Business Loans

OnDeck provides small business owners funding of up to $500,000 to grow their businesses.

  • Maximum Funding Amount: 500000
  • Minimum Funding Amount: 5000
  • Term loans and lines of credit available
  • Get an approval decision in minutes
  • Must have been in business at least one year with annual revenue of $100,000 or more and have a personal credit score of 500+

    Is OnDeck legit?

    Yes, OnDeck has been providing funding to small businesses since 2007. This direct lender has high approval rates because it bases its loan decisions on cash flow and performance, rather than on your credit score only.

    What makes OnDeck unique?

    OnDeck claims to be 50% less expensive than merchant cash advances on average, along with other benefits that could make it a contender for your funding needs.

    • Quick decisions. After you apply for a loan with OnDeck, you can expect a decision in minutes, with funding deposited within five business days of approval.
    • No prepayment fee. You won’t pay a fee if you repay your loan early.
    • Wide range of loan amounts. OnDeck offers loans that range from $5,000 to $500,000.
    • Customer support. OnDeck specialists are available to help with questions six days a week.
    • Loyalty benefits. Customers who return to the lender for additional services can see reduced fees and pricing.

    What to look out for

    • Potentially high APRs. OnDeck’s APRs range from a reasonable 9% to a much higher 99%, depending on your application.
    • Shorter loan terms. OnDeck offers loan terms from three to 36 months, which may not be enough time to pay back your loan.
    • Origination fees. You’ll pay a one-time origination fee of 2.5% to 4% of your total loan amount on your loan. Subsequent loans come with lower origination fees — but the focus on return customers could be a sign of unreasonable terms and rates that are difficult to meet in one go.
    • Daily automatic payments. OnDeck automatically deducts fixed amounts from your bank account daily, which could take a significant bit out of your business cash flow.
    • Secured loans. OnDeck offers secured loans that are not secured by personal collateral of the borrower — rather, they’re secured by a general lien. This allows the lender to seize the borrower’s personal property if they fail to pay back the loan.
    • Not all loans are FDIC insured. Your business loan could be issued by the FDIC-insured Celtic Bank or another non-FDIC insured bank. Read your loan’s terms and conditions carefully to see which applies to your loan.

    Is applying for a business loan with OnDeck safe?

    Yes, OnDeck has two features that make it a safe lender for your business loan:

    • A+ BBB rating. BBB accredited since 2008, OnDeck now boasts an A+ rating.
    • TLS encryption. OnDeck uses Transport Layer Security encryption to protect your personal and financial information on its website.

    What else do I need to know?

    Many OnDeck borrowers seem to walk away happy with their experience, but others complain that it’s more difficult to obtain a loan than expected. If you don’t meet OnDeck’s eligibility criteria, review the details other business loans to find one you qualify for.

    Bottom line

    OnDeck may be a fit for business owners with fair personal credit or better who are looking for a business loan to be repaid within three years. But loans come with some features that have the potential to hurt cash flow, like daily repayments.

    Before making any final decision regarding a business loan, be sure to compare your options and determine that it’s the right choice for you.

    Frequently asked questions about OnDeck

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