OnDeck Business Loans Review

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Our Take

OnDeck offers large small business loans and lines of credit to help you pay for anything from inventory to equipment upgrades to debt consolidation. But because of the company’s high interest rates, it may not be the right choice for borrowers who can qualify for a loan elsewhere.

  • Pros & Cons
  • Key Takeaways
  • Company Overview
Pros & Cons
  • Same-day funding

  • Loans for fair credit

  • Builds business credit

  • Loan renewal available

  • Lower fees for repeat customers

  • Not available nationwide

  • Not available for all industries

  • Requires frequent payments

  • High average interest rate

  • Secured loans only

Key Takeaways
  • OnDeck offers both small business loans and lines of credit in amounts up to $250,000 and $100,000, respectively.
  • To qualify for a business loan, borrowers must have a credit score of 625, at least one year in business, and at least $100,000 of business revenue.
  • OnDeck has a streamlined application and borrowing process, which is frequently mentioned in customer reviews.
  • Pre-qualifying for an OnDeck loan requires only a soft inquiry in your credit, meaning it doesn’t affect your credit.
  • OnDeck loans come with several costs, including above-average interest rates, origination fees, and monthly maintenance fees on lines of credit.
Company Overview

OnDeck was founded in 2006 with the stated goal of making small business financing easier and more efficient to get online. 

In four years, the company surpassed $100 million in capital lent to small businesses in all 50 states. It has since expanded its operations into Canada and Australia and has exceeded $13 billion in loans and lines of credit. In 2020, OnDeck was acquired by Enova International, but it still operates under the OnDeck name.

OnDeck offers business loans and lines of credit, primarily to small businesses. The company serves businesses in all states except Nevada, North Dakota, and South Dakota. 

There are some industry restrictions. The company doesn’t lend to businesses in the following industries:

  • Adult entertainment and materials
  • Drug dispensaries
  • Firearms vendors
  • Government, non-profit, public administration, civic organizations
  • Horoscope and fortune telling
  • Loan brokers
  • Lotteries, casinos. raffles, gaming, and gambling
  • Money services
  • Mortgages
  • Rooming and boarding houses
  • APR Range Average of 49.06%
  • Loan Amount $5,000–$250,000
  • Loan Terms 3–24 months
  • Recommended Minimum Credit Score 625
  • Origination Fee 0%–4%
  • Late Fee Not disclosed

Pros Explained

  • Same-day funding: Depending on the time of day your loan is approved, you could have the money in your bank account by 5 p.m. the same day.
  • Loans for fair credit: OnDeck loans are available to borrowers with credit as low as 625, which is lower than many lenders offer.
  • Builds business credit: OnDeck reports your payments to the business credit bureaus to help you build your business’s credit.
  • Loan renewal available: You can renew your business loan and your remaining interest will be waived.
  • Lower fees for repeat customers: When you renew your business loan, you can do so with a lower origination fee (as low as 0%).

Cons Explained

  • Not available nationwide: OnDeck business loans aren’t available in Nevada, North Dakota, or South Dakota.
  • Not available for all industries: While OnDeck loans money to businesses in more than 700 different industries, there are a handful of industries that aren’t eligible.
  • Requires frequent payments: Rather than monthly payments, OnDeck requires either weekly or daily payments on your loan.
  • High average interest rate: OnDeck business loans have higher interest rates than many lenders, with an average APR of more than 49%.
  • Secured loans only: OnDeck doesn’t offer unsecured loans. Instead, the company places a lien on your business’s assets, meaning you could lose your business if you don’t pay.

Types of Business Loans Offered by OnDeck

OnDeck provides two different types of business financing for small businesses. First, the company offers business loans with terms ranging from three to 24 months and amounts ranging from $5,000 to $250,000. While OnDeck doesn’t disclose the interest rate range for this type of loan, it does state that there’s an average APR of 49.06%.

It’s important to note that OnDeck’s business term loans are secured loans. The loan is secured by a lien on the business and is backed by a personal guarantee. There’s no minimum amount or type of assets required to serve as collateral.

The other type of financing OnDeck offers is a revolving line of credit ranging from $6,000 to $100,000. These lines of credit come with a 12-month repayment term, which resets after each withdrawal. The average APR on a business line of credit with OnDeck is 48.9%.

OnDeck loans and lines of credit can be used for purposes such as:

  • Purchasing inventory
  • Providing working capital
  • Expanding or renovating
  • Upgrading equipment
  • Hiring more employees
  • Consolidating business debt

Depending on your needs and your business finances, you may be able to borrow a term loan and line of credit at the same time.

Time to Receive Funds

When you apply for an OnDeck loan or line of credit and submit the necessary documents, you’ll get a call within one business day to discuss your options. Once your loan is approved, you’ll be able to finalize your loan amount, term, and repayment schedule.

OnDeck’s small business term loans come with same-day funding in many cases. You’ll receive the money in your bank account by 5 p.m. ET on the day your loan is approved. However, same-day funding is only available in certain states and for loans up to $100,000. There may also be restrictions related to creditworthiness and term length. 

Additionally, same-day funding is only available for loans approved before 10:30 a.m. ET. And loans that don’t qualify for same-day funding will be funded via ACH payment within two to three days.

OnDeck’s lines of credit are eligible for instant funding, but only for transactions between $1,000 and $10,000.

Borrower Requirements

OnDeck has several eligibility criteria for both its term loans and its lines of credit. For your loan to be approved, you’ll need:

  • At least one year in business
  • A personal FICO score of at least 625
  • At least $100,000 in annual business revenue
  • A business checking account

While the requirements listed above are the minimum needed to qualify for a loan, you won’t automatically be approved if you meet them. In addition to those requirements listed above, OnDeck also considers factors like your payment history, total debt, the percentage of the business you own, your business credit, your business cash flow, and public records.

According to OnDeck, its average approved borrower has been in business for at least three years, has a personal FICO score of at least 650, and has annual business revenue of more than $300,000.

OnDeck Business Loan Features

  • Soft credit inquiry: When you complete the loan application, OnDeck runs a soft credit inquiry, meaning it won’t appear on your credit report or affect your credit score. It’s only once you decide to move forward with your application that OnDeck will run a hard inquiry.
  • Builds business credit: While OnDeck uses your personal credit to determine whether you’ll qualify for a loan, it reports your payments to the business credit bureaus. As a result, your loan can help build your business credit.
  • Loan renewal: OnDeck allows loan borrowers to renew their loans. When you renew your loan, OnDeck will waive your remaining interest and issue a new loan with a lower origination fee (often as low as 0%).
  • Dual financing: Depending on your creditworthiness and business finances, you may be able to take out both a business term loan and a business line of credit at the same time.

Can You Refinance a Business Loan With OnDeck?

OnDeck doesn’t offer refinance loans. However, if you have a business loan with OnDeck, you can renew your loan and have your remaining interest waived. Additionally, because OnDeck doesn’t charge prepayment penalties, you could refinance your loan with another company.

Customer Service

OnDeck has separate customer service for those who need help with an existing loan versus those who need help with a new loan. Here’s how you can get ahold of the company:

Help with a new loan:
Help with an existing loan:

In addition to these customer service numbers, OnDeck also offers its customers a dedicated account manager. Once you have a loan or line of credit with OnDeck, you’ll be able to contact your account manager directly.

Customer Satisfaction

OnDeck has a fairly good reputation with its customers. First, the company has a rating of 4.6/5 stars on Trustpilot. Ninety-four percent of more than 3,800 reviewers gave the company five stars. 

Positive reviews from customers point to how easy the company is to work with and how efficient the lending process is. Negative reviews largely point to unexpected fees or lines of credit that were shut down without notice.

Applying for an OnDeck Business Loan 

OnDeck has a simple application process that can be done primarily online. Here’s how to get started:

  1. First, you’ll complete an online application and provide your business tax ID, three months of business bank statements, and a current month-to-date statement of activity. You can also provide this information over the phone.
  2. Once you’ve submitted your loan application, you’ll receive a call from a dedicated loan expert within one business day to discuss your offers. This is merely a loan pre-qualification, as there’s no hard inquiry.
  3. If you’re happy with your loan offer, you can finalize your loan term, amount, and repayment schedule and finalize your application with an online checkout.
  4. Once your loan is approved, you’ll get your funding as soon as the same day and in as many as two to three business days.

Alternative Business Loan Lenders

OnDeck Rapid Finance Credibly
Loan Terms Up to 24 months Up to 60 months Up to 24 months
Minimum Credit Score 625 Not disclosed 500
Processing Time Same day Same day Same day

Final Verdict

OnDeck is an option for someone with a fair personal FICO score who may struggle to qualify for a business loan elsewhere. The company offers both loans and lines of credit in large amounts and to borrowers with credit as low as 625. But because of the high interest rates, borrowers with good credit can likely qualify for a better loan elsewhere.

What Credit Score Do You Need for an OnDeck Loan?

To qualify for an OnDeck business loan or line of credit, you’ll need a credit score of at least 625. However, most people who have their applications approved have credit scores of at least 650. You may improve your chances of approval by improving your credit score before applying.

Is It Easier to Get a Business Loan With LLC or Sole Prop?

You can get a business loan with either a limited liability company (LLC) or a sole proprietorship. However, you may be more likely to have your loan approved as an LLC, as some lenders are hesitant to lend to sole proprietors.

Is It Easier to Get a Business Loan With an EIN?

Yes, it is easier to get a business loan with an employer ID number (EIN). In fact, many borrowers, including OnDeck, require an EIN to qualify for a business loan.

What Type of Loans Does OnDeck Offer?

OnDeck offers both term loans and lines of credit to small businesses. The term loans are borrowed in a lump sum and must be repaid on a fixed schedule, while its lines of credit can be drawn upon at any time while it remains open, as long as you have some of your credit limit remaining.

Article Sources
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  2. OnDeck. “Restricted. Industries.”

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