OnDeck Review 2021: Good for Established Businesses, Better for Repeat Customers

OnDeck has loaned over $13 billion to small-business owners.1 But is it the right for your business needs?
Best for repeating borrowers
OnDeck
3.1 out of 5 stars
3.1
  • Check
    Deals for repeat borrowers
  • Check
    Business credit bureau reporting
  • X
    High starting APR
  • X
    Required lien and personal guarantee

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. This alternative lender offers decent loans to small businesses, but you’ll need to become a repeat borrower to get the most out of OnDeck.

But before you jump into anything serious with OnDeck, we want to make sure you have the facts. So here’s what’s on deck for this OnDeck review: who will benefit most from an OnDeck loan, who qualifies for financing from OnDeck, and what kinds of funding OnDeck offers—plus some more details you should know before you apply.

Ready? Let’s go.

OnDeck is best for businesses that will come back for more loans

Strengths
Pro Bullet Lower rates for repeat borrowers
Pro Bullet Reporting to business credit bureaus
Pro Bullet Excellent reputation with borrowers
Weaknesses
Con Bullet High starting APR
Con Bullet Required lien and personal guarantee
Con Bullet High typical qualifications

To really get the best rates from OnDeck, you’ll need to come back again and again. Because 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 perks. 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.

But before you can become a repeat borrower, you need to become a first-time borrower. So what does OnDeck look for in a small business?

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Qualifying for an OnDeck loan

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.)

OnDeck application requirements

Minimum
Typical

1 year in business

3 years in business

$100,000 annual revenue

$300,000 annual revenue

600 credit score

650 credit score

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.

Money
Best business loans for startups
Worried your startup won’t qualify for money from OnDeck? We have a list of other startup loans you can apply for.

Which isn’t to say that you shouldn’t apply to OnDeck if you meet only the minimum requirements—there’s no cost to apply (except your time) and no risk in trying. (You may also want to confirm with an OnDeck loan specialist that they won’t perform a hard credit pull up front.)

Just don’t be surprised if you receive funding that has much higher rates than you’d like.

And speaking of rates, we should mention that OnDeck raised its typical rates recently―by quite a lot, in fact. (We’ll show you specifics in the next section.) That means that OnDeck no longer has the low, competitive rates it used to. In other words, if you want the lowest rates around, you’ll probably prefer another lender.

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.

Don't qualify for a business loan? Get a personal loan instead

OnDeck loan options

By now you know whether or not you can and should apply for a loan with OnDeck. But what kinds of financing can you even get from OnDeck?

Well, 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 financing

Product
Min./max. loan size
Lowest listed rate (APR)
Repayment terms
Learn more
Term loan$5,000/$250,00035.1%Up to 18 mos.
Line of credit$6,000/$100,00031%12 mos.

Data effective 12/3/20. At publishing time, pricing is current but subject to change. Offers may not be available in all areas.

Info
What is APR?
APR, or annual percentage rate, is a way of expressing the total cost of a loan over a year, including interest rates and fees. So it includes your interest rate, but it also includes the fees you’ll pay (like origination fees).

OnDeck’s term loans come in a fair range of sizes and terms. So you could get a smaller loan with a six-month term to fund smaller expenses you can repay quickly—like new office chairs or a marketing campaign. But if you have larger business expenses that will take longer to repay—several commercial mixers, for example, or the cost of hiring some new employees—then a larger loan with a longer loan term might work better.

Term loans from OnDeck have an origination fee of up to 5% of your loan principal. Like we mentioned earlier, repeat borrowers tend to get lower origination fees (all the way down to 0%), so your second OnDeck term loan will be a better deal than your first.

Pricetag
Interest rate reality check

As we showed you above, OnDeck rates start at 31%. That’s pretty high to begin with, but you need to know that its rates can get much higher. In fact, OnDeck only offers those rates to repeat borrowers with excellent qualifications.

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.

OnDeck customer reviews

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,2 and on Trustpilot, OnDeck has a 4.9 (out of 5) based on more than 2,000 reviews.3 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.

Bullhorn
The SMART choice

One possible reason OnDeck borrowers are so happy? It sends would-be borrowers a SMART Box comparison with all loan offers, which clearly breaks down the total cost of a loan. It’s a great tool for surprise-free financing.

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OnDeck FAQ

Does OnDeck offer unsecured loans?

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.

How do I apply for an OnDeck loan?

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.

Can I get both a term loan and a line of credit from OnDeck?

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).

Does OnDeck report to credit bureaus?

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

How does OnDeck compare to Kabbage?

OnDeck and Kabbage are both online lenders, which makes them easier to qualify for than traditional lenders. Kabbage has lower application requirements than OnDeck.

That said, the biggest difference is that Kabbage stopped lending early in the COVID-19 pandemic, and it hasn’t resumed offering new loans yet (as of December 2020). OnDeck, on the other hand, is back in the loan business.

OnDeck vs. Kabbage

OnDeckTerm loans and lines of credit$100,000 in annual revenue and 600 credit score requiredAPR starting at 31%
KabbageOnly lines of credit$50,000 in annual revenue and 550 credit score requiredEffective APR starting around 24%

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

Get more details on Kabbage in our Kabbage review.

The takeaway

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. So while it might take some time to really get to know OnDeck, we think it’s a worthwhile investment.

Not sure 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.

Related content

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.

Sources
1. OnDeck, “About Us.” Accessed December 3, 2020.
2. BBB, “On Deck Capital, Inc.” Accessed December 3, 2020.
3. Trustpilot, “OnDeck.” Accessed December 3, 2020.

Chloe Goodshore
Written by
Chloe Goodshore
Chloe covers business financing and loans for Business.org. She has worked with many small businesses over the past 10 years, from video game stores to law firms. Those years watching frustrated business owners try to sift through their many options gave her a passion for breaking down complex business topics. She wants to help business owners spend less time agonizing over their businesses so they can spend more time running them.
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