Helen Wilbers is a Bankrate editor specializing in auto loans. Helen is passionate about demystifying complex topics, such as car financing, and helping borrowers stay up-to-date in a changing and challenging borrower environment.
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Since 2006, OnDeck has funded $15 billion in small business loans. It currently offers term loans and lines of credit to borrowers with fair credit.
Min. annual revenue
Min. time in business
Who OnDeck is best for
You don’t need perfect credit to get approved with OnDeck, which makes it a good fit for fair-credit borrowers. Furthermore, startups who have trouble getting approved elsewhere because they haven’t been operable for at least a year may have better luck with OnDeck. The lender’s fast funding times also make it worth considering if you need working capital right away, despite the hefty borrowing costs.
Who OnDeck may not be best for
If you’ve been in business for more than a year and have a solid credit rating, you may qualify for a better loan offer elsewhere. Borrowers seeking a long-term financial solution should also look beyond OnDeck for a business loan since the maximum loan term is just 24 months. And, of course, if you operate in a state or industry OnDeck doesn’t serve, you’ll have to try another lender.
OnDeck features a customizable short-term loan for business owners looking to make a specific purchase or one-time investment. Funds are dispersed in lump-sum as soon as the same day. You’ll make fixed daily or weekly payments as you repay the loan.
If your loan is in good standing after you’ve paid off 50 percent of the balance, you could be eligible for a renewal that waives any remaining interest. Plus, the new loan may come with a reduced or waived origination fee.
OnDeck charges an origination fee of up to 4 percent. Additionally, if your loan doesn’t come with OnDeck’s Prepayment Benefit, repaying early means you’ll still owe 75 percent of the loan’s remaining interest. Loans are secured by a general lien on business assets, and you’ll have to sign a personal guarantee.
Loan quick facts
Amounts: $6,000 to $100,000
Terms: 12 months, revolving
APR: 29.90%; average is 48.90%
OnDeck business line of credit overview
A business line of credit from OnDeck gives you access to a pool of cash you can borrow from to cover business-related expenses. Funds are disbursed within seconds, and you’ll only pay interest on the amount you borrow. You’ll get 12 months to repay each draws, and that term resets if you make a new draw.
There is no draw fee, but a $20 monthly maintenance fee applies. However, you can have it waived for the line’s first six months if you borrow $5,000 within the first week of opening the account.
Loans are secured by a general lien on business assets, and you’ll have to sign a personal guarantee.
Do you qualify?
Here are the eligibility guidelines for business term loans and lines of credit:
625 FICO score
$100,000 in annual business revenue
One year in business
Active business bank account in good standing
Operate outside Nevada, North Dakota or South Dakota
Build business credit: OnDeck reports account activity to the business credit bureaus, so making timely payments could help improve your business credit rating.
Early repayment incentives: Select borrowers qualify for the Prepayment Benefit option that waives the remaining interest if the balance is paid in full before the loan term ends. But if you don’t get this option, you’ll owe 75 percent of the remaining interest if you repay early.
What we don't like
Not available in all 50 states: OnDeck does not offer business loans in Nevada, North Dakota and South Dakota.
Steep APRs: The average APR for business term loans is 62.10 percent, and the average APR for the business line of credit is 48.90 percent. If your business is well-established and has good credit, you’ll likely find better business loan rates elsewhere.
Loan origination fee: Some borrowers pay an origination fee of up to four percent. A $20 monthly maintenance fee also applies to lines of credit unless you draw at least $5,000 in the first week.
How OnDeck compares to other lenders
OnDeck is a good lender for those with fair personal credit needing fast funding. Along with same-day funding in select states, OnDeck has early repayment discounts — a plus as many lenders charge prepayment penalties. That said, OnDeck has high APRs, so if you have good to excellent credit, you’ll likely find a better rate with other lenders.
OnDeck doesn’t require perfect credit, but you will need a score of at least 625. On the other hand, Credibly only requires a score of 550 to apply for a loan or line of credit.
When it comes to rates, OnDeck and Credibly have higher rates than traditional lenders. Credibly uses factor rates that start at 1.09, whereas the average APR for OnDeck’s term loans is 62.10 percent. If you’re considering using Credibly, be sure to convert your factor rate to an interest rate to determine the true cost of borrowing.
Both lenders offer short-term loans. OnDeck has terms of up to 24 months, with Credibly offering loan terms of up to 18 months. That said, you can borrow more from Credibly; maximum borrowing limits reach $400,000 for qualified applicants. OnDeck tops out at $250,000.
OnDeck is better for established businesses with decent credit who can pay off their loan quickly. You may want to consider Credibly if you have a hard time getting approved elsewhere or you’re a new business that wants a variety of loan options.
OnDeck vs. Fundbox
Both OnDeck and Fundbox are good options for people with poor to fair credit, while businesses with excellent credit may be able to find a better rate elsewhere. While both offer short-term loans, FundBox’s terms are significantly shorter. They only offer 12- or 24-week terms. OnDeck has borrowing limits of $250,000, while Fundbox’s limit is $150,000.
One area where the two lenders diverge is fees and interest. If you take out a loan from OnDeck, the APRs start at 29.90 percent, but the average APR for OnDeck’s business term loan is 62.10 percent and 48.90 for their business lines of credit. Fundbox charges fees instead of interest; starting at 4.66 percent per week for 12-week loans or 8.99 percent for 24-week loans.
Borrowers looking for short-term, fast loans will likely find that OnDeck and Fundbox are comparable options. However, OnDeck is a better option for fair-credit businesses that need a longer term to repay the loan.
How to apply for a loan with OnDeck
You can apply for a loan with OnDeck online or by phone at 888-269-4246. Most applicants receive a decision in minutes, and funds are available as soon as the same business day or within one to three days.
Live support is available to applicants by phone at 888-269-4246 Monday through Friday from 9:30 a.m. to 7:30 p.m. EST. You can also send an email to firstname.lastname@example.org to receive assistance or the answer to any questions you may have regarding business loans and the lending process.
Despite its steep APRs, OnDeck could work if you’re a small business owner that can’t get approved elsewhere and desperately need funding. Be sure to only borrow what you can comfortably afford to repay. Also, inquire about the Prepayment Benefit, which could help you save a bundle in interest if you’re eligible.
OnDeck’s business loan offerings come with steep interest rates and brief repayment periods, making them riskier for borrowers. Depending on the amount you borrow, you could get an unaffordable monthly payment, creating cash flow problems in your business.
Borrowers need a minimum credit score of 625 to qualify for a business term loan or line of credit with OnDeck. However, a higher credit score likely means you’ll be eligible for more competitive terms.
The interest rate for business term loans starts at 29.90 percent. That said, the rate you receive is determined by your creditworthiness, cash flow and your company’s overall financial health. OnDeck states that access to the best rates is limited, and based on the average rates OnDeck discloses, most borrowers pay much more.
How Bankrate rates OnDeck
OnDeck offers low maximum amounts, generous eligibility requirements and lightning-fast funding.
Qualification requirements are clear, and you can qualify with just a soft credit pull.
Customers can apply for and manage their loans online.
OnDeck offers two loan types and the option to renew your term once it’s 50 percent paid.
years in business
loan features weighed
data points collected
To select the top small business lenders, Bankrate considers more than 20 factors. These factors include loan amounts, approval and funding times, credit requirements, APR or factor rate ranges, fees, and easy-to-find rate and fee disclosures. Bankrate reviewed more than 30 lenders and gave each a rating, which consists of five categories:
Accessibility: Factors considered in this category include minimum loan amounts, approval and funding speed, minimum annual revenue and minimum credit score.
Affordability: This section measures interest or factor rates and fees.
Transparency: How easy it is to find important rates, fees and eligibility requirements are considered in this category.
Customer experience: Customer service hours, online applications and app availability are considered in this category.
Flexibility: This category considers factors like the number of loan products and ability to change payment due date.
Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.