OnDeck Review

Pros

• Relaxed borrower qualifications
• Relaxed credit score requirements
• Competitive terms and fees
• Short application process
• Excellent customer support
• Prepayment discounts

Cons

• Potentially high rates

Overview

OnDeck is a hugely prolific online small business lender. Founded in 2007, OnDeck became one of the first lenders to rely primarily on technology to make their lending decisions. With their algorithms, decisions that used to take days or weeks can now only take minutes. Currently, OnDeck offers two types of business loans: short-term loans and revolving lines of credit.

Many businesses will qualify for a loan from OnDeck — if you have been in business at least 12 months, make at least $100,000 annually, and have a personal credit score above 600, you have a good chance of qualifying. 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. According to OnDeck’s latest quarterly report (Q1 2019), their short-term loans typically have APRs that range from 11.9% – 99.4%, and line of credit APRs range from 11% – 57.9%. Naturally, however, the rate you’re personally offered will depend on the strength of your business. In addition to the cost, OnDeck loans have a maximum repayment term of 36 months, so those who need a longer term length might want to look elsewhere.

Because OnDeck’s loans can be a bit expensive, you may want to make some comparisons before settling on a lender. 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.

Read on to learn more!

Visit OnDeck

Services Offered

• Short-term loans
• Lines of credit

Borrower Qualifications

Here are the minimum qualifications required to be eligible for a short-term loan or line of credit from OnDeck:

Additionally, you must make at least five bank transactions per month, and your business cannot be in one of these restricted industries.

Terms & Fees

Rating: Good

OnDeck offers short-term loans and lines of credit to eligible borrowers.

Short-Term Loans

These are the terms and fees for OnDeck’s short–term loans:

Aside from the factor rate, 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.

OnDeck does not charge interest on their term loans. Instead, your repayment amount is a fixed rate, also called a total interest percentage. The amount you have to repay is only calculated once; fixed rates don’t compound like interest. For example, if you have a fixed rate of 19% of the borrowing amount, and you are borrowing $50,000, you will have to repay $59,500 in total ($50,000 x 1.19 = $59,500). OnDeck’s rates range from about 0.4% – 0.43% of the borrowing amount per month (according to their Q1 2019 report), depending on the borrower’s term length and creditworthiness. Payments are made on a daily or weekly basis.

As reported by OnDeck’s quarterly earnings report, loans carry an effective APR between 11.9% and 99.4%. To understand how to calculate APRs on loans without interest rates, and learn about all the factors you should consider when evaluating the cost of the loan, head over to our article on short-term loans and APRs.

Lines Of Credit

Here are the stats for OnDeck’s lines of credit:

OnDeck offers revolving lines of credit. Their credit lines are not tied to specific collateral or intended to be used for a specific purpose.

Credit lines are a maximum of $100,000; you can draw from your line at any time. Term lengths are six months per draw, and you can repay early without penalty. Unlike their term loans, OnDeck’s lines of credit do accrue interest, so the earlier you repay the more money you save.

Aside from interest, OnDeck has a $20 monthly 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.

Application Process

Rating: Excellent

OnDeck has a very easy and fast application process.

To start the process, all you have to do is fill out an application on their website. According to the FAQ, this is the information they might ask for:

• Business tax ID
• Bank statements for the previous few months
• Social Security number of the business owner(s)
• Driver’s license number and state of issue

They’ll 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 normally 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.