OnDeck Review 2022: Good for Established Businesses, Better for Repeat Customers

You know how some people are nice yet a little closed off at first, but over time you start to really see their best qualities? That’s OnDeck.

See, OnDeck has some great perks for repeat borrowers, like discounted fees and even waived interest. Plus, it reports to credit bureaus (unlike many online lenders) and has pretty positive customer reviews. But with high starting rates and high typical borrower qualifications, OnDeck may not be a great deal for first-time borrowers.

So before you jump into anything serious with OnDeck, we want to make sure you have the facts.

Ready? Let’s go.

• Loans and pricing
• Features
• OnDeck vs. competition
• Drawbacks
• Credit reporting
• Customer reviews
• Takeaway
• FAQ

Unlike some OnDeck competitors that offer dozens of business financing options, OnDeck keeps it simple: it offers term loans and a business line of credit.

OnDeck’s line of credit has a weekly repayment schedule, while its term loans have both daily and weekly repayment options. Keep in mind that OnDeck requires automatic ACH payments on its loans, so you’ll be making loan payments whether you want to or not.

OnDeck’s term loans come in a fair range of sizes. So you could get a smaller loan for smaller expenses (maybe some new office equipment) and a larger loan for bigger expenses (like to hire some new employees). Unfortunately, OnDeck no longer offers the wide range of repayment terms it used to. No matter the size of your loan, you’re looking at somewhere between one and a half to two years to repay your loan.

Term loans from OnDeck have an origination fee of up to 4% of your loan principal. But OnDeck offers lower origination fees to repeat borrowers (all the way down to 0%), so your second OnDeck term loan will be a better deal than your first.

OnDeck’s line of credit has a lower maximum amount than its term loans, but it also offers lots of convenience. As a line of credit, it lets you withdraw and use funds, repay what you borrowed, and then borrow more—making it great for cash flow needs. So you can use your credit line to help you cover bills while you wait for customers to pay up or to buy more inventory before the Christmas rush.

As far as fees go, OnDeck’s business line of credit has a monthly maintenance fee of $20. (Bummer.) But if you withdraw $5,000 or more within the first five days of opening your line of credit, OnDeck waives that maintenance fee for six months. While we don’t recommend withdrawing thousands of dollars just to save $120 over six months, the waived fee is a nice perk if you have a big up-front expense to take care of.

We already mentioned the best thing about OnDeck: It has solid perks for its repeat borrowers. So just like a fancy cheese, OnDeck gets better with age—except OnDeck offers things like lower rates and reduced fees instead of delicious flavor.

But really, it pays to be a repeat borrower with OnDeck. When you do, there’s a good chance OnDeck will offer you a lower interest rate than you had on your previous loan; likewise, it might reduce the amount of your loan origination fee. (Assuming, of course, that personal and business credit profiles haven’t dropped in the meantime.)

You can go ahead and apply for another OnDeck loan while you’re still paying off your first loan. As long as you’ve paid off at least half of your loan and made it at least halfway through your repayment term, you’re eligible to apply for more OnDeck financing.

And if you get approved―get this―OnDeck will even waive any interest left on your first loan. (You will still have to repay the remaining principal, of course.)

Put simply, repeat borrowing with OnDeck gives you some good deals. So if you think you’ll need several small-business loans over the next few years, go ahead and start cultivating that good relationship with OnDeck.

Well―as long as you’re not swayed by one of its competitors instead.

Since it’s an online lender itself, OnDeck mostly competes with other online lenders and online lending marketplaces.

But even for an online lender, OnDeck is on the more expensive side of things. (Keep in mind, though, that OnDeck uses APR to express the total cost of a loan, while many lenders list only interest rates―which don’t include fees.) So with that in mind, you may want to try to qualify for a lower rate from another lender.

And speaking of qualifications, OnDeck has pretty middle-of-the-road minimums. It doesn’t have the lowest credit requirements we’ve seen, for example, but it accepts lower credit scores than some online lenders and pretty much every traditional lender.

Since we’re on the topic of borrower requirements, let’s talk about some of OnDeck’s downsides―like its typical borrower qualifications. 

We want to be transparent here: while OnDeck lending technically has very modest application requirements, you probably won’t get a very good deal if you have a new startup or poor credit history. That makes OnDeck best for established businesses that want lower applications requirements than you’d find at a traditional bank.

You can apply for a business loan or line of credit from OnDeck with as little as one year in business, $100,000 in annual revenue, and a personal credit score of just 600. But a typical OnDeck borrow looks a little different.

Though OnDeck no longer publishes typical borrower qualifications, its website used to say that your average OnDeck borrower has been in business for seven years, makes $300,000 in annual revenue, and has a personal credit score of 650. (And we have no reason to believe that’s changed.)

A little different, no?

Which means that OnDeck really works best for more established businesses. The longer you’ve been in business and the better your finances, the more likely you are to not only get approved for an OnDeck loan but also get its lowest rates.

And speaking of rates...

We should mention that OnDeck raised its starting rates in the last couple years―by quite a lot, in fact. That means that OnDeck no longer has the low, competitive rates it used to. 

Generally speaking, OnDeck loans cost more than even the most expensive bank loans (which usually have a maximum APR in the low 30s or less). Sure, you can find more expensive online lenders―but OnDeck is definitely not a cheap financing option. Make sure you understand what you’ll be paying before you commit to anything.

Even so, OnDeck remains a well-reviewed online business lender with a fast application and funding process. So if you plan on doing that repeat borrowing we discussed, we still think it’s a decent choice.

One other reason we think OnDeck is a good choice? It reports to credit bureaus.

Lots of online lenders don’t do that, usually because they’re not technically offering credit products. (You can tell because they charge “fees” instead of interest.) But since OnDeck uses interest-based financing, it can help build your credit score.

OnDeck reports to Equifax, Experian, and Paynet. So as you responsibly repay your loan, you may find your OnDeck financing helps improve your personal and business credit―letting you get even better loans the next time you borrow.

We know that taking on a small-business loan is a pretty big deal, so we wanted to see if borrowers were happy with their experience getting funding through OnDeck. The answer? Absolutely.

As it turns out, OnDeck has a great reputation. It has an A+ rating with the Better Business Bureau,¹ and on Trustpilot, OnDeck has a 4.8 (out of 5) based on more than 3,000 reviews.² OnDeck reviews praise its fast funding process and its helpful employees. In fact, you’ll find plenty of reviewers who report that they’ve been financing their business with OnDeck for several years now (taking advantage of those perks for repeat borrowers, no doubt).

Now, you’ll find a few customers who complain about high interest rates, slower-than-promised approval processes, or the daily repayment process. But for the most part, OnDeck’s customers seem genuinely pleased with the lender. We suspect you will be too.

OnDeck small-business loans can be a good source of working capital for many businesses—but it’ll work best for a small-business owner that has a well-established business and who will come back for more loans.

As you borrow again and again, you’ll get to see what makes a long-term relationship with OnDeck so rewarding: those sweet low rates and discounted origination fees (plus credit reporting to help improve your credit profiles).

But with high starting rates and fairly high typical borrower requirements, OnDeck may not appeal to every business owner.

Not sure if OnDeck is the right lending company for you? Check out our review of our favorite in the industry, Lendio, to learn about a good alternative.

We assigned OnDeck scores in more than 10 different areas, such as interest rates, customer reviews, and revenue requirements. We used those scores to calculate our overall score for OnDeck and to see how OnDeck compares to dozens of other business lending companies.

Technically, no, OnDeck doesn’t offer unsecured loans, because it requires a blanket lien and a personal guarantee.

That being said, OnDeck doesn’t require any specific collateral to get a loan—so you shouldn’t get rejected if you don’t have enough business assets. And honestly, you probably won’t find a business lender that offers a truly unsecured, no-strings-attached loan. So if you’re looking for an unsecured loan because you don’t have collateral, OnDeck is still a good choice.

To learn more about how blanket liens and personal guarantees work, check out our guide to unsecured loans.

You can apply with OnDeck online. Supposedly, the application takes just 10 minutes. If you happen to prefer interacting with real people over interacting with a soulless computer, OnDeck also has a phone application.

Note that you’ll need your social security number, driver’s license, business tax ID, and a few months of bank statements to apply.

If you’re lucky, OnDeck will approve you the same day you apply (you’ll have up to 30 days to accept or decline your loan offer). You can even get funded as quickly as the next business day, though that’s not a guarantee.

Theoretically, yes, you can get both a term loan and a line of credit from OnDeck. You can certainly apply. We can’t guarantee you’ll get accepted for both, but it's worth a shot (especially since OnDeck loves repeat borrowers).

Yes, OnDeck reports to credit bureaus. That means you can build your business credit by repaying your OnDeck loan.

OnDeck and Kabbage are both online lenders, which makes them easier to qualify for than traditional lenders. Kabbage used to have lower application requirements than OnDeck. But since being purchased by American Express, Kabbage no longer lists its borrower requirements.

Kabbage also uses monthly fees rather than an interest rate. But watch out―listing loan fees like that usually hide the true (high) cost of financing.

Related read: OnDeck vs. SmartBiz Business Loans

That said, Kabbage will make a good alternative to OnDeck―whenever it starts lending again.

Get more details on Kabbage in our Kabbage review.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.