See how these two online business lenders compare on costs, customer reviews and more.
Relatively young small businesses might want to look at OnDeck and Funding Circle. These nontraditional online lenders impose fewer requirements than many banks, often with faster turnaround. Read on to learn which — if either — is right for your small business.
An overview of OnDeck and Funding Circle
OnDeck is an online lender that offers secured business term loans and lines of credit, mainly to small and relatively young businesses. Its application, underwriting and funds disbursement take a fraction of the time other online lenders might take, making it a good bet for emergency funding.
Funding Circle doesn’t directly provide capital to businesses. Instead, it can connect your needs with willing investors in its network. You’re limited to fixed-term business loans, but they come with competitive starting interest rates and fees. Although not as fast as OnDeck, Funding Circle can provide quick funding, slashing how long banks and credit unions typically require.
First, am I eligible?
OnDeck offers loans to businesses that have been around for a shorter time and to borrowers with lower credit scores. But Funding Circle could be a better choice if your business brings in less than $100,000 a year.
You’re eligible for an OnDeck business loan if:
- Your credit score is at least 500.
- Your business has been around for at least one year.
- You bring in at least $100,000 in revenue a year.
You’re eligible for a loan through Funding Circle if:
- Your credit score is at least 620.
- Your business is at least two years old.
- You have no criminal record and no bankruptcies in the past seven years.
- You run a for-profit business in an approved industry
- You have a plan for paying off tax liens of $5,000 or more.
Which lender can get me money faster?
OnDeck claims it can get you money in as little as 24 hours after approval — which itself takes only a few hours.
Funding Circle’s application process can be more involved, and approval can take up to 24 hours. Once you get the green light, you could receive your funds within five days.
You can apply for a loan and receive your funds with OnDeck in the time it takes to just get approved with Funding Circle.
Which has a better reputation?
OnDeck gets an A+ from the Better Business Bureau, where it has been accredited since 2008. It does well with customer reviews too, averaging 9.4 out of 10 from nearly 1,000 Trustpilot users. Nearly all of these users — 92% — rated it an “Excellent” service.
Funding Circle also gets an A+ from the BBB, where it’s been accredited since 2013. It scores an average 9.4 out of 10 on TrustPilot, based on more than 3,000 reviews. Only 88% of these reviewers gave it an “Excellent” rating, however.
Funding Circle might have three times as many online reviews, but OnDeck has enough to make the numbers matter. In the end, customers are slightly more satisfied with OnDeck.
How much can I borrow with each lender?
With OnDeck, you can take out business loans of $5,000 to $500,000.
Funding Circle allows you to borrow from $25,000 to $500,000 to fund your business.
OnDeck offers a wider range of loan amounts than Funding Circle.
Which lender offers more affordable financing?
OnDeck’s business term loans come with AIRs that start at 9.99%. These loan terms range from three months to three years.
OnDeck’s revolving credit lines can be pricier, with rates starting at 13.99%, and they require weekly repayments. While this means your payments are broken into smaller amounts, having a week or two of bad business — or even just low funds — could set you back.
APRs can be much lower with Funding Circle — as low as 4.99%. You can take anywhere between six months and five years to pay off your loan, depending on your needs.
Winner: Funding Circle
Funding Circle is the clear winner here, offering lower rates and a wider range of terms.
Imagine this scenario: Yousef and Greg have run an upscale vending machine business for more than 10 years and now want to expand to other states. To do this, they’ll need to purchase at least 10 more vending machines and supplies that can run them about $80,000 in total.
To get the new plan off the ground more quickly, they rule out banks and credit unions, and narrow their online options to OnDeck and Funding Circle.
Comparing the rates they qualify for, here’s what they found:
|Loan term||3 years||5 years|
In the end, Yousef and Greg choose Funding Circle for its lower, more affordable monthly payments and a significantly lower overall loan cost.
Whether OnDeck or Funding Circle is better for your business depends what you value in a loan. Businesses that need quick funds for emergency expenses might do better with OnDeck. Funding Circle could be a better choice for those concerned with overall costs above all else.
Or maybe neither does it for you or your business. You can compare more options before making a final decision to get the best possible deal.
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