Ondeck vs. Funding Circle Loans 2021

To choose between OnDeck and Funding Circle, just check out their interest rates and borrower qualifications.
Best for startups
OnDeck
OnDeck
3.1 out of 5 stars
3.1
  • Icon Yes  Light
    600 min. credit score
  • Icon Pros  Dark
    Direct lender
  • Icon Pros  Dark
    Lines of credit & term loans
  • Icon Pros  Dark
    Rates from 35% APR
Best for established businesses
  • Icon Yes  Light
    660 min. credit score
  • Icon Pros  Dark
    Lending marketplace
  • Icon Pros  Dark
    Many types of funding
  • Icon Pros  Dark
    Rates from 4.99% interest

At a glance, OnDeck and Funding Circle can look pretty similar―which makes it hard to choose between them. Both OnDeck and Funding Circle are well-reviewed online lenders that offer term loans and lines of credit (and more, in the case of Funding Circle) to business owners.

If you look a little deeper, though, you’ll start to see big differences―like financing options, interest rates, and borrower requirements―that can help you choose between these two alternative lenders.

So in this article, we’ll tell you all about what makes OnDeck and Funding Circle different, what makes them similar, and what you need to consider before you apply for a loan with either of them.

OnDeck vs. Funding Circle 101

As we already mentioned, OnDeck and Funding Circle have quite a bit in common.

OnDeck and Funding Circle both fall into the category of online lenders (aka alternative lenders), and they both offer at least a couple business financing options. And business owners like them both―OnDeck and Funding Circle earn a 4.9 and 4.5 out of 5 on Trustpilot, respectively.1, 2

From there, though, things start to look pretty different.

Lending models

For starters, OnDeck is what we call a direct lender―meaning you apply for a loan, get funded, and make loan payments through OnDeck. But Funding Circle is a lending marketplace. That means that when you submit an application, Funding Circle shops around for you to find the best funding options you can qualify for. Then you can choose from those options and get funded through a partner lender.

Now, that might not seem like an important difference, but it actually matters a lot.

Because with direct lending through OnDeck, you get exactly two funding choices (a term loan or line of credit) through one lender. But with marketplace lending through Funding Circle, you can choose from more funding options (including invoice factoring and merchant cash advances) from several lenders.

In other words, Funding Circle gives you more potential loan options than OnDeck does. But lending marketplaces have their drawbacks too―especially when it comes to time.

Funding Circle can take days to shop around for you, and then you still have to finalize your loan application after that. If you’re in a hurry to get funding, Funding Circle’s lending marketplace may be too slow for your needs.

OnDeck, on the other hand, can approve your application in just a few minutes (though we should note this isn’t guaranteed). And depending on the funding method you choose, you can even get your money the same day you apply.

Borrower requirements

But the biggest difference between OnDeck and Funding Circle? Their minimum business loan requirements.

OnDeck vs. Funding Circle minimum borrower requirements
Lender
Min. time in business
Min. credit score
Min. revenue
Get funding
OnDeck

OnDeck

1 yr.600$100,000/yr.
Funding Circle

Funding Circle

2 yrs.660$500,000/yr.

Funding Circle expects a lot from its borrowers. You need to have at least a couple years in business under your belt, earn half a million in annual revenue, and have a personal credit score in the high 600s. Those are pretty high requirements for an online lender (but they’re much closer to what you’d see at a traditional lender like a bank).

OnDeck, on the other hand, has looser business loan requirements. You can apply with just one year in business, $100,000 in annual revenue, and a credit score of 600. Its typical borrower has higher qualifications (a revenue of $300,000 and a credit score of 650), but even those are lower than Funding Circle’s minimums.

Megaphone
Bad credit business loans

Both OnDeck and Funding Circle require at least a fair credit score. If you’ve got bad credit, we’ve found some business loans for bad credit that might work better for you.

That makes OnDeck way better for younger, growing businesses and business owners with less-than-perfect credit. But older, more established businesses will want to take a closer look at Funding Circle.

Why? Simple: the loan costs.

Loan costs

OnDeck, like many online lenders, has relatively expensive financing. Its financing starts at 35% APR (annual percentage rate). That’s not outrageous for an alternative lender, but it’s way higher than you’d find at a bank or credit union.

Funding Circle, however, offers interest rates that can compete with traditional lenders. Its term loans have starting rates of just 4.99%―one of the lowest rates we’ve seen from an online lender.

Of course, Funding Circle’s loan costs can vary a lot from product to product. A merchant cash advance, for example, will cost you way (way!) more than one of those term loans.

And with either lender, those are just starting rates. Your actual loan costs will depend on your borrower qualifications, loan size, and other factors.

Even so, if you’re looking for the cheapest business loan, Funding Circle has a big edge over OnDeck.

But cost isn’t the only thing that matters. So with all the differences we’ve discussed between OnDeck and Funding Circle, which lender should your business get funding through?

OnDeck: Best for startups and fair credit

OnDeck
OnDeck
3.1 out of 5 stars
3.1

Starting at 35% APR

  • 600 min. credit score
  • $100,000 min. annual revenue
  • 1 yr. min. time in business
  • Same-day funding available

For younger businesses (or any businesses with lower borrower qualifications), we recommend applying with OnDeck rather than Funding Circle.

That’s because OnDeck is the more accessible of the two lenders. It will accept lower credit scores, younger businesses, and less revenue than Funding Circle will. So businesses that would get rejected immediately by Funding Circle can still qualify for OnDeck funding.

OnDeck loan options
Product
Min./max loan amount
Lowest listed rate
Repayment term
Get funding
Line of credit$6,000/$100,00035.9% APR12 mos.
Term loan$5,000/$250,00035% APR24 mos.

Data effective 7/19/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

And sure, OnDeck doesn’t have as many financing options as Funding Circle does―but it still gives you at least a couple choices. Its term loans and lines of credit can both be used for all sorts of working capital needs (from inventory purchases to payroll to business expansion).

That said, there’s no getting around OnDeck’s high starting costs. Sure, repeat borrowers can make things slightly cheaper by getting reduced origination fees (which you can learn more about in our OnDeck review), but OnDeck will never be the cheapest business financing option. So if you can qualify for Funding Circle’s lower starting rates, you’ll probably want to try.

But for startups and other young and growing businesses, OnDeck’s lower borrower requirements make it the better choice.

Funding Circle: Best for established businesses

Funding Circle
FundingCircle
3.8 out of 5 stars
3.8

Starting at 4.99% interest

  • 660 min. credit score
  • $500,000 min. annual revenue
  • 2 yrs. min. time in business
  • Days-long funding process

Has your business been around the block a time or two―with the revenue and other qualifications to prove it? Then Funding Circle is the better lender for you.

It all comes down to interest rates. Funding Circle has much (much!) lower starting interest rates than OnDeck does. Even when you account for Funding Circle’s origination fee, a Funding Circle term loan can end up being way (way!) cheaper than an equivalent OnDeck loan.

Plus, Funding Circle offers larger loans and longer repayment terms than OnDeck does. And that’s just for its term loans. Funding Circle also has the advantage of offering many more types of financing (which you can learn all about in our Funding Circle review), so you can find financing that fits your specific needs.

Funding Circle loan options
Product
Min./max loan amount
Lowest listed rate
Repayment term
Get funding
Term loan$5,000/$500,0004.99% interest3 mos.–10 yrs.
SBA 7(a) loan$20,000/$500,0006% interest10 yrs.
Invoice factoringUp to $5 million0.25%/wk. feeN/A
Line of credit$6,000/$100,00010.99% APRN/A
Merchant cash advance$5,000/$400,0001.15 factor rate3–18 mos.
Working capital loan$25,000/$400,0001.15 factor rate6–18 mos.

Data effective 7/19/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

In other words, Funding Circle has all-around better financing options―assuming you qualify, of course.

And that’s the real sticking point for some businesses. Funding Circle has pretty high requirements for its borrowers―equivalent to the requirements for a bank loan―so you’ll need to prove your creditworthiness with a high annual revenue and a high credit score. That puts Funding Circle out of reach for some would-be borrowers.

But if you can meet those minimum credit score, revenue, and time in business requirements, then Funding Circle offers delightfully low starting rates and plenty of loan choices to choose from. 

OnDeck vs. Funding Circle FAQ

What credit bureau does OnDeck use?

OnDeck reports to three business credit bureaus: Experian, Equifax, and Paynet.

Is Funding Circle any good?

Yes, Funding Circle is a good lender. It has positive customer reviews (a 4.5 out of 5 on Trustpilot2), plenty of financing options, and low starting interest rates.

Because of its high borrower requirements, Funding Circle isn’t right for every business. If you can qualify, though, it’s a solid business lending marketplace.

What are OnDeck’s interest rates?

OnDeck loan rates start at 35% APR.

Note that that number is APR―not interest―so it includes both interest and loan fees (like origination fees). OnDeck doesn’t publish its interest rates.

And keep in mind that 35% is just OnDeck’s starting rate. Your rate could end up a lot higher, depending on your borrower qualifications, loan term, and other factors. 

What fees are charged to OnDeck borrowers?

In addition to interest, OnDeck charges an origination fee (between 0% and 5%) on its term loans and a $20 monthly maintenance fee on its lines of credit.

The takeaway

To decide between Funding Circle and OnDeck, you really need to take a good look at your qualifications as a borrower―such as your credit score and business revenue.

If you’ve got high qualifications, then Funding Circle offers the better financing option. That’s thanks to its low starting interest rates and many funding options.

Business owners with lower qualifications (at least for now) will have better luck with OnDeck. It’s more expensive, yes, but OnDeck offers financing to borrowers that couldn’t qualify for Funding Circle loans.

Not ready to commit to either Funding Circle or OnDeck? Find alternative lending options with our list of the best small-business loans.

Related content

Sources

  1. Trustpilot, “OnDeck.” Accessed July 20, 2021.
  2. Trustpilot, “Funding Circle.” Accessed July 20, 2021.

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.

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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