OnDeck Small Business Loans: 2023 Review

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Lauren WardUpdated January 9, 2023

Overview of OnDeck

In business since 2006, OnDeck is an online lender that offers two types of business loans: short-term loans and lines of credit. Both are secured with a general lien on business assets. Ondeck is known for offering quick access to capital for businesses that might not qualify for a bank loan. To be considered, you need to have been in business for at least one year and have annual revenues of $100,000-plus. If approved, funding is often available as soon as the same day you apply. OnDeck’s interest rates can run high compared to traditional (as well as other online) lenders. However, their pricing is transparent and customers generally report positive experiences. The lender assigns each client a dedicated loan advisor who’s available six days a week for support throughout the process. OnDeck reports to the business credit bureaus, so getting a loan with them and paying it back responsibly can help you build your business credit, which can help you qualify for loans with more competitive rates and terms in the future.The Takeaway: Though interest rates tend to run high, OnDeck can be a good option for businesses that need cash quickly and have struggled to qualify for a loan or line of credit with a traditional lender.

Pros and Cons of OnDeck

Pros	Cons
• Can qualify with a minimum credit score of 625• Fast application process with minimal documentation• Same-day funding on finalized loans • Loan payments are reported to the credit bureaus, which could help borrower’s build business credit• Dedicated loan adviser	• Interest rates are high compared to traditional lenders• Requires frequent (daily or weekly) repayments• Must be in business for at least one year, so startups may not qualify• Loans are secured by a general lien on existing business assets• Not available in Nevada, North Dakota, or South Dakota

Types of Small Business Loans Offered by OnDeck

OnDeck offers two types of business loans. Here is a closer look at each product and how it can help your business:

Short-Term Business Loan

This is a type of installment loan that allows business owners to borrow a lump sum of cash. You then must repay the loan proceeds, plus interest and fees, according to a set repayment schedule (which may be daily, weekly, or monthly). Short term loans can be a great option if you need funds for a specific business investment, like starting a new project, expanding, or making a large purchase that can’t be covered with a credit card. OnDeck offers short-term business loans up to $250,000, with repayment periods up to 24 months.

Business Line of Credit

A business line of credit is a revolving loan that gives you access to a fixed amount of capital, which can be used for any type of business expense. You can draw what you need from your line when you need it, and only pay interest on the amount you borrow, not the full credit line. Available funds replenish as you pay them back.A line of credit can be a good option if you need extra working capital to cover recurring business expenses or bridge gaps in cash flow. OnDeck offers credit lines up to $100,000. There is a 12-month repayment term that resets after each withdrawal, with automatic weekly payments. There are no draw fees, but there is a monthly maintenance fee. OnDeck is a digital product available to eligible businesses in all U.S. states except for Nevada, North Dakota, or South Dakota.

OnDeck Small Business Loan Terms, Rates, and Fees

	Short-Term Loan	Line of Credit
Loan amounts	$5,000 to $250,000	$6,000 to $100,000
APR range	Starting at 29.9%; average is 62.1%	Starting at 29.9%; average is 48.9%
Loan terms	Up to 24 months	12 months: resets after each draw
Repayment schedule	Daily or weekly	Weekly
Fees	Origination fee of 0% to 4% of total loan amount	$20 monthly maintenance fee (can be waived for first six months with $5,000 withdrawal)
Minimum credit score	625	625
Time to funding	As fast as the same day	As fast as the same day

Information accurate as of Jan. 9, 2023.

Who May an OnDeck Small Business Loan Be Right For?

OnDeck may be best for a business owner who:

Needs cash fast. You can apply online in as little as 10 minutes. If approved, you may be able to access your loan proceeds or credit line that same day.
Has been turned down by traditional lenders. OnDeck considers business owners with bad credit (625 and higher) and only one year in business. Plus, you don’t need to have a valuable business asset to put up as collateral. The lender will take a general lien or all assets and requires a personal guarantee.
Wants the option to pay off their loan early. OnDeck does not charge a prepayment penalty. Some applicants may also qualify for a Prepayment Benefit where OnDeck waives any remaining interest on your debt.
Can manage frequent payments over a short term. OnDeck term loans require automatic daily or weekly payments (depending on the loan amount and term length) for up to 24 months. With their lines of credit, you’ll have automatic weekly payments with a 12-month term.

Who OnDeck May Not Be Right For

OnDeck may not be a good lending solution for a business owner who:

Operates in certain industries. The following businesses or industries may not be eligible for OnDeck loans: government and nonprofits, public administration, civic organizations, adult entertainment, drug dispensaries, firearms vendors, horoscope and fortune-telling, gambling organizations, money services businesses, and rooming or boarding houses.
Is just starting a business. OnDeck will only work with you if your business has been in operation for at least a year, so startups seeking funding will need to look elsewhere or wait to apply.
Has less than $100,000 in annual revenue. While OnDeck has more flexible qualification requirements than many traditional lenders, your business needs to earn at least $100,000 in gross annual revenue to be eligible for funding.
Can qualify for more affordable financing. If your business has the ability to qualify for a business loan or line of credit from a bank, or a U.S. Small Business Administration (SBA) loan, you will likely pay a lot less in interest and fees. (The application process and time to funding, however, will be longer.)

OnDeck Loan Fee Structure

On top of interest, OnDeck charges certain fees that you’ll also need to budget for.For a term loan: OnDeck charges an origination fee, which can range from 0% to 4% of the total amount of your loan. This is taken directly out of the principal before you get the loan. So, for example, if you have a $20,000 loan with a 2.5% origination fee, OnDeck will take $500 and you’ll get $19,980. To reward loyal customers, they offer a lower or even 0% origination fee on any subsequent loans. For a line of credit: You’ll likely be charged a $20 monthly maintenance fee. The fee may be waived for six months, however, if you draw $5,000 or more during the first week of opening a line of credit account. A note about APRs: Annual percentage rate (APR) represents the annual cost of a loan to a borrower. It includes both the interest rate, as well as fees, giving you the loan’s total cost per year.

OnDeck Loan Repayment

OnDeck’s term loans come with a relatively brief repayment period, typically 18 to 24 months. Payments are automatically deducted from the borrower’s designated bank account either on a daily or weekly basis. Borrowers can apply for more funding when at least half of the loan balance has been paid off. With a line of credit, borrowers have 12 months to repay the owed funds. This 12-month window resets every time a withdrawal gets made. Whenever there’s a remaining balance, OnDeck requires automatic weekly payments.

OnDeck Funding Eligibility Requirements

To apply for an OnDeck term loan or line of credit, there are some minimum eligibility requirements, including:

Businesses need to have been established for at least one year
Annual minimum business revenue of $100,000
Borrowers’ personal FICO® score need to be at least 625
Businesses must have a business checking account
Businesses may not be located in Nevada, North Dakota, or South Dakota
As with many lenders, a strong revenue and repayment history can help applicants qualify for more competitive OnDeck interest rates.

Applying for a OnDeck Small Business Loan

OnDeck offers an online application process that they claim can be completed in 10 minutes. While applying for a loan, you can call, email, or live chat with a loan specialist to help you through the process or answer questions. Before you apply, you'll need to gather essential details on yourself and your business, including:

Business tax ID number
Social Security number of the business owner
Estimated annual gross revenue for the business
Average bank balances for the business
The last three months of bank statements

After you submit your application, a loan advisor will let you know if you qualify and, if so, what financing options are available to your business.If you accept a funding option and agree to the repayment terms, you may be able to receive access to the borrowed funds that same day or within a day or two.

OnDeck Alternatives to Consider

Other lenders offer short-term business loan options, including Bank of America, Fundbox, and Kabbage. Here’s how they compare to OnDeck:

Bank of America If your business is well-established, you may want to look at the term loans and lines of credit offered by Bank of America. Compared to OnDeck, qualification requirements are stricter and the application process is generally slower. However, rates and terms will likely be more competitive.
Fundbox Fundbox offers business lines of credit of up to $150,000 with terms of 12 or 24 weeks. Although the terms are shorter than OnDeck’s, interest rates can be lower, and (unlike OnDeck) Fundbox does not charge an account maintenance fee.
Kabbage Like OnDeck, Kabbage offers fast and flexible business lines of credit. The difference is that Kabbage offers larger lines of credit and longer terms, as well as fixed monthly payments (versus OnDeck’s daily or weekly repayments). However, Kabbage does not offer a short-term loan product, which allows you to get a larger amount of money for a longer period of time.
Lantern by SoFi: Unlike OnDeck, Lantern by SoFi is a lending platform that connects borrowers to small business loans offered by a variety of trusted lenders. By filling out a single application, you get access to multiple loan options, including short-term loans, business lines of credit, term loans, invoice financing, and commercial real estate loans. Loans up to $2 million are available to help you grow your enterprise.

Let Lantern by SoFi connect you with the right lender for your small business financing needs.

Frequently Asked Questions

Does OnDeck conduct credit checks?

What are the benefits of using OnDeck?

Does OnDeck offer peer-to-peer lending?

Does OnDeck report to the credit bureaus?

Is OnDeck a legitimate lender?

Can I settle with OnDeck?

About the Author

Lauren WardLauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.

Brand names: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.

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