OnDeck Small Business Loans Review

OnDeck is a financial lending platform that provides term loans and lines of credit to small businesses. While the company has specific eligibility requirements, it also uses digital analytics and other data to determine a person’s creditworthiness.

In this review, we’ll share insights into OnDeck’s best fast business loans to help you determine whether using this lender may be a smart move for your business.

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Best for quick funding

Whether you’re expanding your business, paying contractor invoices or covering payroll, there may be a time when you need a cash flow boost for your business. If you’re exploring options and need funding fast, OnDeck’s quick application process and same-day funding may be the right solution for your business.

OnDeck small business loans pros and cons

Pros

• Good for lower credit scores

• Quick application process

• Funds available within the same business day

Cons

• High interest rates and origination fees

• Personal guarantee and business lien required

• Frequent automatic payments required

Pros explained

Good for lower credit scores

Unlike many traditional business credit lenders, OnDeck considers borrowers with mid-range fair credit (625 FICO) and higher. Businesses must also be active for at least a year prior to the loan application in order to qualify.

Additionally, the business owner will need a business checking account and should be able to prove a gross annual revenue of at least $100,000 to be eligible to receive a loan offer from OnDeck.

Quick application process

OnDeck’s smooth online application helps business owners go through the loan application process with ease, but applicants should prepare some documentation before applying.

The application process will ask for the following:

• Business Employer Identification Number (EIN) and/or Social Security number

• Annual gross revenue estimate

• Average business bank account balance

OnDeck may also ask for documentation on business financials for the previous three months leading up to your application.

Funds available within the same business day

Once you accept a funding option from OnDeck and agree to the repayment terms, you may be able to access the money you borrowed that same day.

You’ll be alerted that you now have access to a set amount of loan funding. Then you can withdraw the amount needed for your projects from the provided account. Once you draw from that credit line, the clock starts ticking to begin making fixed weekly payments.

Same-day funding can be used for term loans up to $100,000, and it’s only available in certain states.

Cons explained

High interest rates and origination fees

OnDeck has faced criticism for its origination fees and high interest rates for its loans. At the time of this writing, OnDeck’s loans have interest rates ranging from 29.99% to 66%.

Personal guarantee and business lien required

The OnDeck loan program also requires business owner borrowers to make a personal guarantee for the loan. In addition, the lender places a lien on the business’s assets until the loan has been paid. These measures may seem excessive, but by agreeing to these conditions, business owners can obtain funding quickly.

Frequent automatic payments required

OnDeck loans require weekly payments when you withdraw funds from your line of credit. The lender also charges loan customers a $20 monthly maintenance fee. However, that fee may be waived if you withdraw $5,000 or more from your credit line within the first five business days of opening your account.

OnDeck small business loans policy plans and offerings

Business term loan

OnDeck offers business term loan amounts ranging from $5,000 to $250,000 to qualified borrowers. These term loans are often referred to as short-term lines of credit since the maximum loan amount is comparatively low. Typical bank loan amounts are often much higher, into the millions of dollars.

A business can obtain a loan from OnDeck to refurbish its building or make a capital expenditure in a tight time frame. The lender can often approve loan applications and distribute funds within 24 hours, a good option for businesses that need capital quickly.

Here are some of the key advantages of OnDeck’s business term loans:

• No collateral required: Businesses do not have to put up any physical collateral for the loans, per OnDeck specifications. This helps to make it accessible for companies that may not have assets to pledge.

• Flexible repayment terms: OnDeck’s typical repayment terms are 12 months, but borrowing companies can pay back their loans in a shorter timeframe without a prepayment penalty. This gives businesses the flexibility to choose a payment term that works best for their cash flow.

• Online application and approval process: The application and approval process is completed entirely online, which makes it convenient for businesses to apply for a loan.

• Repeat borrower program: OnDeck has a program for repeat borrowers, which allows them to apply for a loan more easily and quickly after repaying their first loan.

• Credit score requirement: OnDeck has lower credit score requirements (625 FICO minimum) than traditional lenders, making it more accessible to businesses that may have difficulty getting approved for a loan through other channels.

OnDeck’s term loans are an enticing loan program for small- to medium-sized businesses. Qualified applicants can apply online or by phone in less than 10 minutes.

If you qualify for a term loan (under $100,000), you may be able to receive your funds same-day. When it comes to a business line of credit, you can gain access to funds of up to $10,000 in just a few minutes.

Business line of credit

OnDeck’s business line of credit helps small business owners get out of a tight spot in their cash flow. This financing option allows businesses to borrow between $6,000 and $100,000. These funds can be used for any business-related expense, such as inventory, equipment or working capital.

Some of the advantages of this type of financing for business owners include the following:

• No individual collateral required to qualify

• Approval may be provided in as little as 24 hours

• Same-day funding may be possible

• View account information, payment schedules and transaction history online

• Draw funds anytime, regardless if banks are closed

• OnDeck reports to business credit bureaus so you can improve your credit with on-time payments

OnDeck’s requirements for a business line of credit are:

• 625 FICO score

• Business checking account

• $100,000 annual revenue

• One year in business minimum

No collateral is required, though they do reserve the right to place a general lien on your assets and ask you to sign a personal guarantee.

Interest rates are high on these loans: The average annual percentage rate for an OnDeck business line of credit is 48.9%. Note that fees (origination, monthly maintenance) are added to your balance. However, there is no draw fee, unlike some other lenders that offer business lines of credit.

With a business line of credit, weekly payments with a 12-month term are required. The 12-month period resets each time you draw from the line of credit.

OnDeck small business loans pricing

OnDeck’s term loans are available in amounts ranging from $5,000 to $250,000. The lender’s business credit loans are available in amounts of $6,000 to $100,000.

Interest rates for OnDeck term loans start at 29.99%. The rate depends on your creditworthiness, as well as your annual revenue, cash flow and time in operation as a business. In addition, there are origination fees for OnDeck loans. Be sure to evaluate your loan terms to see how much fees affect the total cost of the loan.

OnDeck small business loans financial stability

OnDeck is owned by Enova, an international financial company that provides online financial services across a number of brands, including OnDeck.

Enova’s revenues grew nearly 35% in Q4 2022 compared to the same period a year earlier. Through its companies, it has provided over $25 billion in various loans to more than 7 million customers. OnDeck has delivered some $14 billion in loans to businesses globally.

Although we always try to include accurate and up-to-date information, we don’t claim this information is complete or fully up to date. As always, we recommend you do your own research as well.

OnDeck small business loans accessibility

OnDeck is open for business 24-7-365. Business owners can click over to the OnDeck online application and fill it out to see if their business qualifies for a term loan or line of credit.

To qualify for an OnDeck loan, you must have the following:

• Personal FICO credit score of 625 or higher

• Active business checking account

• Yearly minimum revenue of $100,000

• Time in business must be at least 12 months

Availability

OnDeck’s loan services are available to qualified borrowers via their online application or by phone at (888) 269-4246 (Monday through Friday, from 9:30 am to 7:30 pm ET). It doesn’t lend to businesses in Nevada, North Dakota or South Dakota.

Additionally, OnDeck has a list of business types that it will not serve, which includes industries like non-profits, adult entertainment, firearms vendors, gaming and more.

Contact information

When existing customers need to contact OnDeck, the company makes available its dedicated Customer Service team at (888) 556-3483. Its customer service representatives generally respond quickly to calls and emails.

The company’s main office is located at 1400 Broadway, FL 25, New York, NY, 10018-5225.

OnDeck small business loans customer satisfaction

The user experience with this lender appears to be a healthy one, with OnDeck earning mostly positive reviews. Currently, the company has a rating of 4.7 out of 5 stars on one popular online review site. This rating is an average of over 3,700 reviews at the time of writing. Out of those reviews, 94% of customers ranked the company as “excellent.”

OnDeck has been accredited by the Better Business Bureau since 2008 and has a BBB rating of A+. Customers rank OnDeck lower on this site — 3.71 out of 5 — but there have only been eight complaints made against OnDeck in the last 12 months.

OnDeck small business loans FAQ

Is there a minimum credit score for OnDeck?

Yes, OnDeck requires business owners who apply for one of its loans to have a minimum personal FICO credit score of 625.

What fees does OnDeck charge?

OnDeck charges a range of fees for its term and business loans. Origination fees range from 0% to 4%, based on the loan amount. A monthly maintenance fee will likely be applied, and, depending on the terms of your loan, you may be assessed late payment and returned payment fees as applicable.

What is OnDeck’s interest rate?

Interest rates are continually changing, but at the time of writing, the going interest rates are between 29.99% to 66% for business loans from OnDeck.

How we evaluated OnDeck small business loans insurance

In compiling this review, we analyzed various features of OnDeck’s finance options, including:

• Loan costs: Borrowers pay a monthly maintenance fee for a line of credit

• Eligibility: Minimum FICO score of 625, annual revenue of $100,000 minimum and ongoing business for at least 12 months

• Loan amount maximum: $250,000 for term loans and $100,000 for lines of credit

• Customer ratings: Customers have provided mostly excellent reviews

• Ease of application: Convenient online application loan process

Summary of Money’s OnDeck small business loans review

Overall, OnDeck’s online lending platform ranks well with customer ratings and has a good track record for issuing some of the best small business loans.

Its two main borrowing solutions — term loan and line of credit — may work well for small businesses that need fast access to cash to pay for unexpected expenses, payroll or other short-term funding needs. OnDeck is also known for being more flexible than traditional lenders in terms of the loan amounts they are willing to offer.

Speed of funding is one of the hallmarks of OnDeck. You might qualify for same-day funding if you’re approved for a loan under $100,000. For a business line of credit, you may be able to access instant funding, depending on your application strength. Your account could be available for you to draw funds ranging from $500 to $5,000 within minutes.

OnDeck’s capital lending may appeal to business owners with lower credit scores who need a funding solution. However, OnDeck’s term loans and lines of credit come with relatively high interest rates, plus fees (origination and monthly maintenance). Paying back these loans on time could be somewhat challenging for some small businesses.

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