OnDeck VS Kabbage Comparison: Which Loan Is Better For Your Business?
Get the full scoop on loan products, borrower requirements, and loan rates and fees to decide whether OnDeck or Kabbage is better for your business.
|Ideal For||Established businesses that have trouble qualifying for bank loans||Small businesses seeking banking services in addition to financing|
|Pricing (APRs)||29.9%-99.9% (based on loans originated in the half-year ending March 31, 2022)||9%-36%|
|Lending Products Offered||Term loans, lines of credit||Lines of credit|
|Additional Features||None||Checking account, payment processing|
|What’s Missing||Equipment financing, invoice factoring, higher borrowing limits||Equipment financing, term loans, invoice factoring, higher borrowing limits|
|What’s Next||Apply Now
Although online searches yield thousands of results for alternative lenders, there are two that have emerged as frontrunners in recent years: OnDeck vs. Kabbage.
Before clicking the mouse to hit “send” on your next business loan application, read on to learn more about how OnDeck vs. Kabbage stack up to each other, what to expect throughout the application process, and which is the best choice to fit your business needs.
Table of Contents
- OnDeck VS Kabbage: Main Differences
- Kabbage: Best For The Unbanked
- OnDeck: Best For Fast Borrowing
- OnDeck VS Kabbage: Borrower Requirements
- Loan Rates & Terms
- Application & Funding Process
- Kabbage & OnDeck Competitors
- Which Is Best For My Small Business Loan Needs?
- FAQs: OnDeck & Kabbage Loans
- Comparing OnDeck VS Kabbage: The Final Verdict
OnDeck VS Kabbage: Main Differences
Kabbage and OnDeck occupy a very similar niche, but there are a couple of key differences. Of the two, only OnDeck offers short-term loans. Meanwhile, Kabbage offers some bank-like services.
Both Kabbage and OnDeck offer:
- Business lines of credit
- Fast online applications
- Relaxed lending qualifications
- Terms lasting less than three years
Kabbage: Best For The Unbanked
While Kabbage isn’t a bank, it can offer some bank-like services, namely checking accounts. These checking accounts also have a higher yield than your typical savings account. The company has been a little more cautious as of late — the Kabbage Card is no more, and the minimum credit score to qualify for a line of credit has gone up. However, Kabbage still offers some neobanking perks to customers.
- High-yield checking accounts
- Free mobile check deposits
- Financing qualifications are lower than most banks
- Low borrowing amounts
- Hard credit pull on applications
OnDeck: Best For Fast Borrowing
OnDeck could almost be considered an archetype for transparent online lenders. The company offers fast financing with quick turnaround times and provides flexibility by providing both lines of credit and short-term loans. At the moment, OnDeck has more lenient borrowing requirements.
- Multiple types of financing are available
- Funds are disbursed quickly
- Financing qualifications are lower than most banks
- Low borrowing amounts
- Financing can be expensive
OnDeck VS Kabbage: Borrower Requirements
|Time In Business||1 year||1 year|
|Business Revenue||$100,000/year||$4,200 for the last 3 months|
Is it easier to get a loan from Kabbage or OnDeck? It depends on your circumstances.
Both companies require borrowers to have been in business for a year, so neither is a good solution for startups. OnDeck is slightly less concerned about credit scores, potentially making it the better option for companies with credit issues. On the other hand, Kabbage has lower revenue requirements, making it a good choice for small-scale operations.
Does Kabbage Check Credit?
At one point, Kabbage did not have a minimum credit score requirement. Even back then, however, Kabbage did check applicants’ credit scores and factor them into its underwriting process.
Do Kabbage & OnDeck Perform Hard Or Soft Pulls On Credit?
Kabbage performs a hard pull on credit during the application process. It’s important not to simultaneously apply for a bunch of loans that require a hard pull, as this can drop your credit score. Do your research to make sure this loan is right for you before submitting your application.
OnDeck performs a soft credit pull during the application process, which does not affect your credit score. In some cases, if the credit file is restricted, consent for a hard pull will need to be given by the borrower.
Loan Rates & Terms
|Borrowing Amount||$5,000-$250,000 (short-term loans); $6,000-$100,000 (lines of credit)||$1,000-$250,000|
|Term Length||Up to 24 months (short-term loans), up to 12 months (lines of credit)||6 months|
|Estimated APR||29.9%-99.9% (based on loans originated in the half-year ending March 31, 2022)||9%-36%|
|Additional Fees||$20 maintenance fee (lines of credit), 0%-4% origination fee (short-term loan)||None|
|Collateral||Personal guarantee, blanket lien in some cases||Personal guarantee|
Now that you have an idea of the types of loans Kabbage and OnDeck have to offer, it’s time to talk numbers. Evaluating the rates and terms is an important step in determining a business loan’s affordability and overall cost. How do Kabbage’s loan rates and terms stack up to OnDeck’s?
Which Lender Offers Higher Borrowing Amounts?
It depends on whether you’re talking about lines of credit or short-term loans.
OnDeck provides the highest borrowing amount if a business owner qualifies for one of its term loans. With these loans, borrowers can be approved for up to $250,000. Kabbage does not offer a comparable term loan program.
When it comes to limits for lines of credit, though, Kabbage comes out on top, offering up to $250,000 to borrowers. With OnDeck, lines of credit are available for up to $100,000.
Which Lender Offers Less Expensive Loans?
It’s not easy to make a 1:1 comparison on how expensive a loan will be because the cost can vary greatly from borrower to borrower. That said, the APR of Kabbage’s lines of credit will probably be lower for most customers than OnDeck’s. This also takes into consideration the supplemental fees OnDeck charges.
Which Lender Offers Better Repayment Terms?
OnDeck offers better repayment terms because there are more options for borrowers. For its term loans, repayment terms from three to 36 months are available. OnDeck’s lines of credit have repayment terms of up to 12 months, and payments are made weekly.
Kabbage offers a six-month repayment term. Payments are made monthly with this loan.
Do Both Lenders Require Collateral?
Kabbage does not require collateral to receive a line of credit. However, business owners must sign a personal guarantee during the application process.
OnDeck also does not require collateral. However, a blanket lien is required for all loans.
Application & Funding Process
At this point, you should have a better understanding of what Kabbage and OnDeck have to offer. Maybe you’ve even decided to move forward with one of the aforementioned loan products. Before you do, you should know what to expect during the application and funding process.
What Information Will Kabbage & OnDeck Require During The Application Process?
Basic business and personal information are required when applying for a Kabbage line of credit. This includes your legal and business name, social security number, contact information, and business tax ID. Through Kabbage’s secure platform, you’ll connect your bank account. Other accounts that document your business revenue, such as Amazon, PayPal, and eBay, can also be linked to increase your odds of approval and qualify for a higher line of credit.
When applying for a loan through OnDeck, a minimum amount of information is needed during the application process. This includes basic personal and business information, such as your legal name, business name, and contact information. Additional details may include your business tax ID, social security number, driver’s license number, and business bank statements for the last three months.
How Long Does The Initial Kabbage Application Take?
The initial application for a line of credit through Kabbage takes an average of 10 minutes. An approval decision can be determined just minutes after submitting the application, though there’s no guaranteed time length for how long it will take.
How Long Does The Initial OnDeck Application Take?
You should expect to spend about 10 minutes completing the initial OnDeck application. An approval decision can be made within minutes of submitting the application, with funding available in as little as 24 hours.
How Long Does It Take To Get Line Of Credit Draws From Kabbage & OnDeck?
OnDeck uses the traditional Automated Clearinghouse network for transferring funds. The money is available in one to two business days with this method. For faster funding, OnDeck offers Instant Funding, which transfers funds to an eligible business debit card in just minutes.
With Kabbage, the length of time it will take to receive your money depends on the deposit account that you’ve chosen. For PayPal, funds will be available within minutes. Deposits to your business bank account take up to three business days to receive.
Kabbage & OnDeck Competitors
Kabbage and OnDeck are both popular for their business loan options, but they’re not the only alternative lenders on the market. Whether Kabbage and OnDeck aren’t the right fit for you or you don’t qualify, there are other lenders to consider.
|Lender||Products Offered||Required Time In Business||Required Revenue||Required Credit Score||Next Steps|
|BlueVine||Lines of credit||6 months||$10,000/month||600||Visit Site
|Fundbox||Lines of credit, term loans, flex accounts||6 months||$100,000/year||600||Apply Now
|LoanBuilder||Short-term loans||9 months||$42,000/year||620||Visit Site
|Business Credit Cards||Unsecured lines of credit||N/A||Varies||580||Small business credit card options|
The online lending market is quite competitive, whether you’re looking for a line of credit, a short-term loan, or even more traditional term loans. If you’re intrigued by Kabbage, but you either don’t qualify or want to explore similar lenders, check out our alternatives to Kabbage. Likewise, if you want something similar to OnDeck’s lending options, take a look at our OnDeck alternatives.
Which Is Best For My Small Business Loan Needs?
OnDeck and Kabbage both offer funding opportunities for business owners seeking extra capital. Each lender has its own benefits and drawbacks, so it’s important to carefully evaluate your options and determine which loan will yield the best return on investment and better fit your business’s needs.
Choose OnDeck Business Loans When
- You need more than $150,000 — OnDeck’s term loans have limits up to $250,000
- You’d rather have a term loan than a line of credit
- You want payment terms up to 36 months
Choose Kabbage Business Loans When
- You have less than $100,000 in annual revenue (but a minimum of $50,000)
- You need bank-like services
- You think you can qualify for a lower rate on your line of credit
FAQs: OnDeck & Kabbage Loans
Comparing OnDeck VS Kabbage: The Final Verdict
As we’ve hopefully shown above, Kabbage and OnDeck have similar products, but they fill slightly different niches. OnDeck straight-up offers more product diversity and is easier to qualify for but will generally have higher rates.
Interested in learning more about these small business lenders? Read our full Kabbage review or OnDeck review.
Looking for more small business loan resources? Check out our guide to the best small business loans, or read more about the different types of alternative financing.