OnDeck small business loans review
Fair-credit borrowers may be able to get funds as fast as the next business day.
finder.com’s rating: 4.7/ 5.0
OnDeck could be a helpful alternative if you’ve struggled to qualify for a business loan in the past. It bases its loan decisions on cash flow and performance, rather than just your credit score. But its daily or weekly repayments can put a strain on your budget.
OnDeck offering fewer loans, due to COVID-19
OnDeck paused its regular loans in April 2020 to help business lenders connect with Paycheck Protection Program lenders. It reopened its lending program on June 8, but not at the same scale as before. This likely means that fewer loans are available — and those that are may be harder to qualify for.
And in July 2020, OnDeck was acquired by Enova, which also owns the short-term lenders CashNetUSA and NetCredit. No new changes have been announced, but we will update our information if there are any shifts in OnDeck’s lending practices.
First, do I qualify?
You’re eligible for an OnDeck business loan if you and your business meet the following criteria:
- Personal credit score of 600 or higher
- Business is at least one years old and based in the US
- At least $100,000 annual revenue
- No bankruptcies in last two years
- No unresolved liens or judgments
The average OnDeck customer has a business that’s been around for seven years and earns $450,000. The majority of OnDeck customers also have a credit score of at least 660.
What makes OnDeck business loans unique?
OnDeck is an online lender that looks at your whole business’s profile — not just your business’s credit score — when considering your application. By using alternative data like your business’s success and cash flow, OnDeck opens up financing to business owners who’ve had trouble getting funding from a bank in the past.
It’s also very user-friendly — you can apply on your phone in just a few minutes.
What’s an OnDeck business loan?
OnDeck offer short- and long-term unsecured business loans ranging from $5,000 to $250,000. Loan terms run from 3 to 12 months, giving you a flexible payment period that suits your business. However, you’ll be on the hook for daily or weekly repayments, which can be difficult to swing if your business is seasonal or you hit a slump in sales.
When it comes to costs, OnDeck charges interest as well as an origination fee between 0% and 5% on both its short- and long-term loans. Here’s how it breaks down:
- Short-term loans start at 9% simple interest
- Long-term loans start at 9.99% annual interest rate (AIR)
You can apply online, and if approved your loan funds could be transferred to your selected bank account as soon as the next business day.
OnDeck line of credit
In addition to offering business loans, OnDeck has a line of credit for working capital expenses like managing accounts receivables and ongoing projects.
Credit limits run up to with APRs starting at 13.99%. Like with a credit card, you only pay interest on the funds you borrow and repay your balance with fixed, weekly repayments.
There’s a $20 monthly maintenance fee, though OnDeck waives it for the first six months if you withdraw $100,000 within five days of opening your account. There are no draw fees.
What are the benefits of an OnDeck business loan?
From its loyalty perks to its range of loan terms, here are a few perks of borrowing from OnDeck:
- Fast funding. You may be able to receive your loan as soon as the next business day after getting approved.
- Loyalty perks. Customers who return to the company for additional services may receive reduced fees.
- Range of loan terms. You can repay your loan over a few months or several years depending on your business’s financial situation and needs.
- Available in all 50 states. Businesses from all 50 states and Canada, excluding Quebec Provence, can apply to get funding.
- Dedicated specialists. US-based specialists are available to help with customer questions six days a week.
What to watch out for
Consider these potential drawbacks before taking out a business loan from OnDeck:
- Weekly or daily repayments. Shorter periods of time between repayments might not work if your business doesn’t have an even cash flow or wants to make a large purchase that could temporarily clear out your bank account for a few days or weeks.
- Not for startups. Your business must be around for over a year and make at least $100,000 annually to qualify for an OnDeck loan.
- No prepayment benefits on short-term loans. While OnDeck doesn’t charge prepayment penalties, the way it calculates how much you owe in interest and fees means you won’t be able to save by paying your short-term loan off early.
- Restricted industries. Flea markets, bed-and-breakfasts and car dealerships are just a few types of businesses OnDeck won’t lend to. Be sure your business isn’t on this list before you apply.
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What do borrowers say about OnDeck?
OnDeck has mostly positive customer reviews as of June 2019. It’s been accredited with the Better Business Bureau (BBB) since 2008, which gives it an A+ rating. The BBB bases its rating on criteria including complaint history, transparent business practices and government actions against the business.
The majority of BBB and TrustPilot customer reviews are mostly positive. BBB users gave it nearly 4 out of 5 stars, while 94% of nearly 2,000 Trustpilot reviewers rated it as “Excellent.” They gave it an average score of 9.7 out of 10. Most were happy with the relationships they’d developed with the OnDeck team.
Is OnDeck legit?
Yes, OnDeck is a legit lender with two features that make it a safe option for your business loan:
- A+ BBB rating. Accredited with the BBB 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.
How do I apply?
- Click the Go to site button on our page to be redirected to OnDeck’s website and click Apply Now.
- Fill in OnDeck’s four-page application with details about yourself, your business and the loan you’re applying for.
- Carefully read and check off the application agreement and e-signature agreement before submitting your application.
- Wait for OnDeck’s automated underwriting software to process your information and do a soft pull on your credit score. You should find out if you’re approved for funding within minutes.
- An OnDeck loan specialist will call you to go over the details of your application and ask for additional documentation if needed.
Once your loan is finalized, you can receive funding as quickly as one business day.
What documents do I need to apply?
You’ll need to gather a few documents to complete the application:
- Business tax ID
- Credit card statements for the last three months
- Bank statements for the last three months
- Social Security number for business owner or owners
- Driver’s license number and state of issue
I got the business loan from OnDeck. Now what?
After receiving your funds, OnDeck will start taking daily or weekly “micropayments” out of your business’s bank account. They’re intended to have as little impact as possible on your cash flow, but you could end up in trouble if your bank account has low funds for a short period of time.
Try to avoid making large purchases that might temporarily drain your account and keep a close eye on your balance. If you have any trouble with repayments, you can call customer service at 888-556-3483. Representatives are available weekdays from 8 a.m. to 9 p.m. ET and Saturdays from 9 a.m. to 5 p.m. ET.
I didn’t get the loan. What can I do?
First, don’t panic. There are other loans out there, and you can always reapply after tweaking your finances. Turn it into a learning experience: Contact OnDeck to find out why your application was rejected. Knowing your weaknesses — and making the appropriate changes — is a great way to get ready for your next loan application.
See how OnDeck compares to its competitors
OnDeck vs …
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 its loans come with some features that have the potential to hurt cash flow, like daily repayments.
Gauge the financial health of your business before applying, and compare different business loan options to see if OnDeck is the right choice for you. If you like what OnDeck offers but still aren’t 100% sure, you can always browse lenders similar to OnDeck to make sure you’re making the right decision.
Frequently asked questions
Business loan ratings
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★★★★★ — Poor
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Read the full methodology of how we rate business loan providers to get a better picture of what goes into each star rating.