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OnDeck Small Business Loans: 2021 Review

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Lauren Ward

Lauren Ward

Updated February 8, 2021

Overview of OnDeck

In business since 2006, online lender OnDeck offers established small businesses two forms of financing: 1) term loans and 2) lines of credit. Qualifying businesses can borrow up to $250,000 with a term loan or up to $100,000 with a line of credit.Both types of financing require you to be in business for at least one year, so OnDeck financing is not for just-launched companies or young startups. OnDeck reviews indicate an overall positive customer experience. In fact, as of this writing, the lender has earned 4.8/5 stars on Trustpilot.
Pros and cons

Pros

  • Fast application process
  • Same-day funding on finalized loans 
  • Loan payments are reported to the credit bureaus, which could help build a borrower’s positive payment  history

Cons

  • Must be in business for at least one year
  • Not available in Nevada, North Dakota, or South Dakota
  • Loans are secured by a general lien on existing business assets

OnDeck Small Business Loan Terms, Rates, and Fees

Loan amounts: $5,000 to $250,000; Lines of credit from $6,000 to $100,000APR range: Loan rates start at 35% APR while the average is 54.96% APR. The average line of credit rate is 47.14% APR. (Updated as of 8/23/2021.)Origination fee: 0% to 5%Minimum credit score: 600Time to funding: As soon as same dayCo-borrower needed: No

Other Lenders

OnDeck loan financing may not be the best fit for every small business. Whether you don’t meet the lender’s eligibility requirements or you simply want to compare financing options from multiple lenders,  another small business loan may work for  your business needs. Find out how OnDeck stacks up against Kabbage and other online business lenders.

What Type of Lending Does OnDeck Offer?

OnDeck offers term loans and lines of credit, which are well-suited for borrowers with a minimum FICO® Score of 600, who own established businesses with consistent incoming revenue. Term loan amounts go as high as $250,000, while a line of credit can go up to $100,000. OnDeck also rewards loyal borrowers—with eligible repeat borrowers able to earn access to higher credit limits and lower fees. The loan repayment period, typically, runs three to 36 months. So, it’s important to have a repayment strategy in place. OnDeck reports that its typical customer has been in business for around 3 years with more than $300,000 in annual earnings.  OnDeck does not offer SBA loans, but did participate in the SBA Paycheck Protection Program (PPP) through August 8, 2020.

Important to Keep in Mind

Lenders like OnDeck can also charge origination fees on top of the interest. OnDeck’s origination fees range from 0% - 5% of the borrowed amount. So, it can be helpful to budget with these fees in—not just the interest. OnDeck business loans are secured by assets or collateral. While OnDeck won’t use personal assets to secure a loan (e.g., a business owner’s private property), OnDeck does place a general lien on business assets and collateral. If a borrower defaults on an OnDeck loan, they could lose the business assets that first secured the loan. For a line of credit, you’ll be charged a $20 monthly maintenance fee. The fee may be waived for six months if a borrower draws $5,000 or more during the first week of opening a line of credit account. Some customers also report having their lines of credit closed at the start of the novel Coronavirus pandemic. OnDeck has advertised greater lending restrictions to certain industries and states because of the current economic climate. There are also some restrictions on eligible businesses. OnDeck doesn’t lend within the following industries: 
  • Adult entertainment 
  • Firearms sales 
  • Governmental and not-for-profit groups
  • Drug dispensaries
  • Horoscope and fortune telling services
  • Lotteries, gaming, or gambling
  • Money service businesses (MSB)
  • Boarding houses
  • Vehicle dealerships, used goods sellers, or auctions 
  • Religious institutions or civic associations

Applying for an OnDeck Small Business Loan

OnDeck offers an online application process that they claim can be completed in 10 minutes. Alternatively, you can also call to apply. Interested applicants will need to gather essential details on the business and owner, 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 
Applicants can also expect to share the last three months of bank statements. 

OnDeck 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
  • Potential borrowers’ personal FICO® scores need to be at least 600 
  • Businesses must possess their own bank account
As with many lenders, a strong revenue and repayment history may help qualify small business applicants for more competitive OnDeck interest rates. 

OnDeck Loan Repayment

OnDeck’s term loans come with a relatively brief repayment period, generally spread across three to 36 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. For ongoing financing needs, OnDeck offers some loyalty perks. For instance, the remaining interest on a loan is waived when an eligible current borrower takes out a new business loan with  OnDeck. Subsequent loans may also feature a lower origination fee or even a 0% fee. 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. However, there’s no prepayment penalty if a borrower pays off the balance in its entirety. Whenever there’s a remaining balance, OnDeck requires automatic weekly payments. Borrowers may be eligible for an increase to their credit lines if their business meets cash flow and other requirements.

The Bottom Line

Business owners looking for an easy online application and fast funding may consider applying for an OnDeck business loan or line of credit. You’ll need to meet revenue minimums as well as have at least a fair credit score to be considered—along with meeting OnDeck's other underwriting requirements. (Pre-qualifying for a loan in the US with OnDeck will not impact your credit score). Borrowers partnering with OnDeck can also expect automatic payments that get withdrawn from a bank account either daily or weekly. Some term loan applicants may qualify for OnDeck’s prepayment benefit, where they can pay back the loan early or in full. (Term loans with the prepayment benefit carry higher interest rates). There is no prepayment penalty for lines of credit with OnDeck. Looking for more small business loan options? With Lantern's help, you can spend less time searching for financing and more time growing your business.

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 Ward

Lauren Ward

Lauren 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.
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