OnDeck is an alternative lender that provides business term loans for small businesses. They offer fast service, getting you your much-needed funding faster than most fast lenders. An OnDeck business loan can also be very affordable if you qualify for their best terms.
OnDeck Business Loan: Special Qualities & Features
An OnDeck business loan can be provided very quickly. You just need to apply online or by phone, either of which only takes about 15 minutes. If you’re approved, you can access your new funds in about 24 hours.
This fast turnaround time can be useful in many situations. If you need to fund an unexpected expense quickly, it will provide you with the funds you need. If you want to consolidate other debts into one simple, larger debt, you can also do so very quickly with OnDeck. Speed can help make any situation better.
Mid-Ranged Credit Score Requirements
If you have a credit score of 600 or more, you qualify for an OnDeck loan. We will get into their requirements in more detail soon…
Overall, OnDeck is still an easy-to-access and simple lender.
Many alternative lenders charge prepayment fees if you decide to pay them back early. This may sound stupid, because it is in so many ways. However, from a lender’s point of view, it’s always best if the borrower keeps a loan for its full length. Paying a loan off too soon cuts out the possibility of further interest, which is how business lenders make most of their money.
Many lenders who don’t charge prepayment fees advertise that fact as a major benefit. It certainly is, even though these charges are becoming less common overall.
OnDeck business loans are one step better, however. With an OnDeck business loan, you can actually save money on interest by prepaying. If you qualify for their flexible options, you can have your remaining interest waived upon prepayment.
OnDeck’s interest rates are not the lowest, but their fees are rather moderate. Origination fees cap off at about 4%, and their line of credit comes with a $20 per month maintenance fee. While fees are never fun, OnDeck’s business loans don’t charge too much in fees.
OnDeck makes no secret of the fact that they prefer working with certain types of businesses. They work particularly well with medical and catering businesses. However, they do have a list of business types that they simply won’t work with.
Quickly Explore some of OnDeck’s biggest competition:
|Lender||Minimum Revenue||Time in Business||Minimum Credit||Next Steps|
|$50,000/yr||1 year||560+||See if you qualify|
|$100,000/yr||1 year||600+||See if you qualify|
|$25,000/yr||3 months||500+||See if you qualify|
|$42,000/yr||9 months||550+||See if you qualify|
|$75,000/yr||2 years||620+||See if you qualify|
OnDeck Business Loan Pricing & Terms
There are two business loan products offered by OnDeck.
Business Term Loan
OnDeck business term loans have an APR starting from 9%. This is a good rate, but in some cases, you will land an APR closer to 99%. This wide range makes them a bit hard to assess. Their stated weighted average APR for a business term loan is 25.6%. If you qualify for their best rates, then you will find them to be a very cheap business lender. However, APRs that go well above 25% can represent a serious threat to your cash flow.
These business term loans can have terms lasting anywhere from 3 to 36 months. A repayment schedule can be set up to be either daily or weekly. Depending on how qualified you are as a borrower, they can offer you anywhere from $5,000 to $500,000.
Business Line Of Credit
OnDeck also offers a business line of credit. The rates for the line of credit start at 13.99%, but they too can be quite high. According to OnDeck itself, the weighted average APR for their line of credit is 32.8%.
An OnDeck business line of credit can have a limit of anywhere from $6,000 to $100,000. Repayments are always weekly.
In Either Case…
Regardless of which kind of loan you take from them, you will receive rates based on their assessment. The following factors can land you a lower APR on either loan type:
- Higher credit score
- More experience in business
- Healthy business banking history
- Higher revenue
- A lack of any bankruptcies
These factors can also increase the amount of money OnDeck is willing to lend you.
Do I Qualify For An OnDeck Business Loan?
OnDeck’s terms are more stringent than many other alternative lenders’ terms. However, their better rates can justify this higher bar of entry. Here are the minimum requirements for a loan from OnDeck:
- A credit score of at least 600
- At least one year in business
- Annual revenue of at least $100,000
- A personal guarantee
- No bankruptcies for the last 2 years
The above requirements are for both their term loans and lines of credit.
Factors To Keep In Mind
You Must Pay More Often
One strange way OnDeck stands apart is through its payment schedules. Instead of monthly payments, you are forced to choose between a daily or weekly repayment schedule. This can represent a threat to your cash flow if you don’t factor it into your financial plan.
Not For Every Business
Be sure to have a look at the list of business types that OnDeck doesn’t service.
Also, even if you can qualify for a loan with them, try shopping around. You may find a lender that offers you a product better suited for your business.
OnDeck Business Loan: The Last Word
If you’re looking for a strong and reputable business lender, OnDeck has the qualities you’re looking for. OnDeck business loans offer a fair amount of flexibility. Their rates are potentially very expensive, but they are still fairly tame relative to other fast business lenders. If you want speed, you typically have to pay a premium for it. Given that fact, OnDeck is quite a good alternative lending option.
As a bonus, OnDeck has better customer reviews than many business lenders. You can find them on reputable mediums, such as the Better Business Bureau’s page for them.