OnDeck may be expensive, but if you need a loan fast or don't qualify elsewhere, they are hard to beat.
WRITTEN & RESEARCHED BY
Expert Contributor
Last updated onUpdated
REVIEWED BY
Editor & Senior Staff Writer
| Total Rating | 3.9 |
|---|---|
| Rates & Fees4.6 | |
| Services2.9 | |
| Eligibility Requirements3.8 | |
| Application4.5 | |
| Sales & Advertising Transparency3.8 | |
| Customer Service4.1 | |
| User Reviews4.0 | |
Table of Contents
OnDeck is a popular small business alternative lender owned by Enova International, Inc. Currently, OnDeck offers two types of business loans: short-term loans and revolving lines of credit. Those who are eligible will find that OnDeck’s loans are fast and helpful for a variety of business financing needs.
That said, OnDeck’s loans can be a bit expensive. APRs for OnDeck’s short-term loans can be as high as 98%, with the average APR closer to 50%. Of course, the rate offered to you will depend on the strength of your application.
However, if you need a loan fast or don’t qualify elsewhere, it’s hard to beat OnDeck. Despite the potential drawbacks, OnDeck is transparent, customer service is easy to get in touch with, and overall, most customers report positive experiences.
| Services2.9 |
|---|
| Lending Services 3.0 |
| Lending Limits 3.0 |
| Payment Portal & Mobile App 2.5 |
OnDeck offers term loans up to $250,000 and lines of credit up to $100,000. Only having two funding options and lower borrowing limits than some of its competitors contributed to a slightly lowered score in terms of services.
OnDeck’s lending products are mainly intended for short-term financing needs although, with term lengths reaching as long as two years, they may be able to fill some medium-term lending needs in a pinch. Those two products should be sufficient to cover most businesses’ short-term lending needs, but merchants looking for financing for equipment and similar assets will generally want lower rates and longer terms.
Loans are originated through OnDeck or another Enova subsidiary depending on your location.
There is no mobile app available, which was also factored into OnDeck’s score of 2.9/5 in this area.
| Eligibility Requirements3.8 |
|---|
| Availability 3.5 |
| Borrower Qualifications 3.5 |
| Transparency 5.0 |
Here are the minimum qualifications required to be eligible for a short-term loan or line of credit from OnDeck:
| Time In Business | 12 months |
| Credit Score | 625 |
| Business Revenue | $100,000/year |
Additionally, you must make at least five bank transactions per month to a business bank account, and your business cannot be in one of the restricted industries listed by OnDeck. This includes:
OnDeck currently does not lend to businesses based in North Dakota. Because OnDeck’s services aren’t available to borrowers in all states and several industries, it received a still-respectable score of 3.8/5.
| Rates & Fees4.6 |
|---|
| Pricing 5.0 |
| Affordability 4.2 |
OnDeck’s loans are pricey, though not egregiously so for short-term lending, although this is reflected in our rating. Helpfully, OnDeck does disclose the average rate offered to borrowers within the last six months. This transparency contributed to our rating of OnDeck’s 4.6/5 rating in terms of rates and fees.
These are the terms and fees for OnDeck’s term loans. Note that the following rates apply to loans that originated in the half-year ending March 31, 2023:
| Borrowing Amount | $5,000 – $250,000 |
| Term Length | Up to 24 months |
| Origination Fee | 0% - 5% |
| APR | 29.9% – 98%; average is 60.9% |
| Collateral | UCC-1 blanket lien, personal guarantee |
OnDeck’s term loan APR starts at 29.9%, but the average borrower will get something closer to 61%. Payments are made on a daily or weekly basis. Rather than allow or forbid prepayment on all loans, OnDeck has prepayment as an option. Loans with a prepayment option will generally have a higher interest rate. If you prepay without a prepayment benefit, you’ll still owe 75% of the remaining interest outlined in your loan agreement.
Aside from interest, the only fee OnDeck charges is an origination fee. This is taken directly out of the principal before you get the loan. So if you have a $10,000 loan with a 2.5% origination fee, OnDeck will take $250, and you’ll get $9,750.
Additionally, for returning customers who renew with OnDeck, OnDeck offers loyalty benefits, which will waive all remaining fees on your existing loan if you choose to apply for a new loan (and your current loan is at least 50% paid down). OnDeck may also offer a lower or 0% origination fee for repeat customers.
Here are the stats for OnDeck’s lines of credit. Note that the following rates apply to loans that originated in the half-year ending March 31, 2023.
| Borrowing Amount | $6,000 – $100,000 |
| Draw Term Length | 12 - 24 months |
| Draw Fee | None |
| Maintenance Fee | $20/month |
| APR | 29.9% – 65.9%; average is 52.6% |
| Collateral | Personal guarantee |
OnDeck offers revolving lines of credit. Funds replenish as you pay them back, and you repay a percentage of your total borrowed amount each week. Its credit lines are not tied to specific collateral or intended to be used for a specific purpose.
Term lengths are 12 - 24 months per draw — the window resets after each draw — and you can repay early without penalty. OnDeck’s lines of credit accrue interest, so the sooner you repay, the more money you save. As with OnDeck’s term loans, it reserves the lowest interest rates on lines of credit for the most creditworthy borrowers who have an excellent cash flow and a strong payment history on prior financing products from OnDeck.
Aside from interest, OnDeck has a $20/month maintenance fee but no origination or draw fees. Additionally, if you withdraw at least $5,000 within the first five days of opening an account, the company will waive your maintenance fee for the first six months.
OnDeck’s lines of credit carry the option of Instant Funding for transactions between $1K-$10K. This allows qualified businesses to withdraw funds from their LOC instantly at any time, with no added fee.
| Application4.5 |
|---|
| Application Process 5.0 |
| Application Timeline 4.0 |
OnDeck has a fast and straightforward application process, which is why we rated it a 4.5/5 in this area.
To start the process, all you have to do is fill out an application on the website. According to its FAQ, this is the information OnDeck might ask for:
OnDeck will also ask for a bit of personal information about yourself, your business, and why you want the loan. While applying for a loan, you can call, email, or live chat with a loan specialist to help you through the process or answer questions.
When you’re done with the application, OnDeck will let you know if you’ve been approved or not. If you have, somebody from the company will get in touch with you to go over the details, make sure you understand the loan and gather any additional information they might need.
All this usually takes less than 24 hours. Should you choose to accept the loan, it will be wired into your bank account within a day or two — possibly even the same business day. Same-day funding isn’t available in all states, however, and applies only to term loans of up to $100,000 that complete checkout before 10:30 ET, Monday through Friday.
Merchant Maverick has been researching and reviewing business lenders since 2015. Our writers have tested over a hundred different funding products, including traditional term loans, online loans, lines of credit, start-up loans, merchant cash advances, and equipment financing. In each review, we evaluate rates and fees, services, eligibility requirements, application process, sales and advertising transparency, customer service, and user reviews.
Read more about how we rate business loans and funding products.
When comparing different lenders and loan products, we consider many data points, including the ease and transparency of the application process, interest rates, repayment structure, sales ethics, time to funding, revenue and time in business qualifications, and credit score requirements. Our lists of the best funding products include only those we’ve deemed worthwhile from multiple vantage points, and often share qualities such as widespread accessibility across fifty states, low rates, flexible requirements, and competitive borrowing amounts.
We spend an average of 10-15 hours researching and updating each one of our lists, making sure the loans and funding products included meet our internal standards for quality and reputation.
The Merchant Maverick Seal of Approval 🏆
OnDeck |
|---|
After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see OnDeck for yourself.
The Merchant Maverick Seal of Approval 🏆
OnDeck |
|---|
After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see OnDeck for yourself.
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Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
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Our team of experts spends hours on every review so that we can find the best companies to recommend to our readers. OnDeck made the cut.
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