OnDeck small business loans review

What makes OnDeck shine

OnDeck offers fast funding, sometimes in a matter of minutes with the term loan or the line of credit. The lines of credit also come with no draw fees or prepayment penalties.

Credit lines typically take a few days to process a withdrawal, but OnDeck can give you access to cash in a matter of minutes if you draw up to $10,000 — even on nights and weekends. This makes it particularly useful when you need to bridge gaps in cash flow and avoid high-cost emergency financing, like a merchant cash advance.

Considers more than your credit score

OnDeck also looks at your whole business’s profile — not only your credit score — when considering your application. It uses alternative data to make financing accessible to business owners who’ve previously had difficulty securing funds. For example, OnDeck considers factors like how your business has used past credit, your vendor payment history and your online presence.

Where OnDeck falls short

OnDeck’s biggest downfall is the high cost. It may accept credit scores as low as 625, but it’ll cost you a pretty penny. It may also require daily or weekly repayments based on your loan terms.

High APRs include a monthly maintenance or origination fee

OnDeck’s credit lines come with rates starting at 29.9% APR, with a weighted average rate of 48.9% APR. Its short-term loan rates start at 29.9%, with a weighted average of 62.1% APR.

In comparison, most banks charge no more than 10% on business loans, even when rates are high. BlueVine — a lender similar to OnDeck — offers a line of credit with a much lower starting rate of 7.8% APR.

While there are no origination or draw fees on OnDeck’s line of credit, the APR includes a $20 monthly maintenance fee. Borrowers may pay up to a 4% origination fee on short-term loans. But OnDeck may reduce or waive the monthly maintenance or origination fee for repeat borrowers.

OnDeck increased rates in 2020

The starting rate on OnDeck’s loans are significantly higher than the rates available before COVID-19. Previously, rates on term loans started at 11.89% APR and lines of credit began at 10.99% APR — higher than a bank, but average for an online lender. Its new starting rates of 29.9% are much higher than the starting rates available with most online lenders we’ve seen.

OnDeck loan details

OnDeck is clear on how its loans work and their cost.

How to qualify for OnDeck

OnDeck only has a few minimum requirements to qualify for a business loan or line of credit:

• 625 credit score
• One year in business
• Minimum $100,000 annual revenue
• Active business checking account

To get instant funding from your line of credit, you need a business debit card with the account they have on file. If you don’t have a debit card, it uses ACH to send you withdrawals. It caps instant line of credit withdrawals at $10,000.

How to apply

Apply for a loan online or over the phone by calling 888-269-4246. If you apply online, the application takes about 10 minutes to complete. Before you get started, have your business tax ID, three months of business bank statements, the business owner’s social security number, driver’s license and state of issue on hand. OnDeck typically gives you an initial offer in a matter of minutes.

After you’ve reviewed the offer and submitted any additional documents, OnDeck will run a hard credit check and process your application. You can receive your funds as soon as 24 hours after signing the closing documents.

Depending on your loan terms, you may need to make daily or weekly repayments.

How OnDeck compares to other lenders

BlueVine and Backd are two more online lenders also serving businesses that can’t qualify for traditional financing. Both can process your application within minutes and get you funds as soon as the next business day.

OnDeck short-term loans	Bluevine business lines of credit	Backd
★★★★★ Finder rating 4.6 / 5	★★★★★ Finder rating 4.3 / 5	★★★★★ Finder rating 4.4 / 5
Loan amount $5,000 – $250,000	Loan amount $5,000 – $250,000	Loan amount $10,000 – $2,000,000
APR Average is 55.9% to 56.1%.	APR Starting at 7.8%	APR Competitive
Loan term 3 to 24 months	Loan term 6 or 12 months	Loan term 6 to 16 months
Requirements Companies in business at least 1 year, $100,000+ in gross annual revenue, majority owner with a 625+ personal credit score, active business checking account	Requirements 12+ months in business, $10,000+ in monthly revenue, 625+ credit score	Requirements 1+ years in business, $100K+ annual revenue, 600+ FICO, business bank account, US based business

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BlueVine may be a good alternative for established businesses. Its credit limits are slightly higher than OnDeck, with lower rates. But you’ll need to be in business for at least two years to qualify and make at least $40,000 in monthly revenue.

Backd may be a good alternative for new businesses. Like OnDeck, Backd only requires one year in business but has a higher credit score minimum of 600. It offers lines of credit and term loans, though starting rates are similarly high. Despite the high APR, Backd gets overall positive customer reviews.

OnDeck reviews and complaints

OnDeck gets mostly positive reviews on Trustpilot and has fair customer reviews on its Better Business Bureau (BBB) profile. Most reviews praise the fast approval process, easy application and great customer service. Other customer reviews rave on about the accessible funding and overall frictionless experience.

Negative reviews are expected with a direct lender, and there are several reviews of customers expressing disappointment on declined applications and complaints about high rates. But overall, most reviews are pleased with OnDeck’s service.

Is OnDeck legit?

Yes, OnDeck is a legitimate lender. Founded in 2006, OnDeck was one of the first lenders in the online business loan space. Since, it’s funded $13 billion in small business loans across the globe — including businesses in Canada and Australia. In July 2020, OnDeck was acquired by Enova, a company that also owns the payday and installment loan providers CashNetUSA and NetCredit.

It’s more transparent than your average online lender when it comes to rates, fees and terms. While like most online lenders it’s not federally regulated and isn’t required to meet the same requirements as a bank or credit union. This partly helps OnDeck fund more borrowers who can’t qualify for bank funding.

But if you want that extra layer of legitimacy, consider applying with a federally-insured institution.