Kabbage vs. OnDeck: Which Lender Is Best for Your Business?

Kabbage works best for borrowers with fair credit who need fast cash, while OnDeck provides larger loans to expand.

Steve NicastroJan 26, 2021
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For businesses seeking a lender that offers speed, convenience and ease of qualifying, Kabbage and OnDeck are two good options.

Qualifying for a loan at a traditional bank takes time and requires you to have great credit and, often, collateral. These two online business lenders have an easy application process with minimal paperwork, higher approval rates and funding in 24 hours or less. In exchange, Kabbage and OnDeck have higher borrowing costs than banks.

Here’s a side-by-side comparison of Kabbage and OnDeck, and more details to help you find the best small-business loan.


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Kabbage is a good option if you:

Editor's note: Kabbage paused lending last year amid the coronavirus pandemic. For other financing options, here are Kabbage competitors you can consider. 

  • Need fast cash for working capital

  • Have average personal credit

Kabbage offers lines of credit, and each draw requires repayments over six, 12 or 18 months. Credit line amounts range from $2,000 to $250,000. (Read our Kabbage review.)

Minimum qualifications: Kabbage requires a minimum credit score of 560, at least one year in business and have annual revenue of at least $50,000.

You also need to have a business checking account or online payment platform such as PayPal or QuickBooks.

Speed: The online application process can take less than 10 minutes. No documents are required, and you’ll get a loan decision on the spot.

You can get funds immediately or in just a few days, depending on how you receive the cash and how quickly Kabbage can verify your business data and bank account. You can get money more quickly through a direct transfer to your bank via your debit card or an instant transfer to your PayPal account rather than through an automatic deposit to your bank. You can also request a Visa credit card that is linked to your Kabbage line of credit.

Costs: Kabbage lines of credit have APRs between 24% and 99%.

Each month, you pay a percentage of the amount borrowed — the principal — plus a fee of between 1% and 10% of the total loan amount.

The six-month plan has a higher fee for the first two months — up to 10% — that drops to 1% in the remaining four months. With the 12-month plan, the fee is higher in the first six months and drops to 1% for the remaining six months.

There are no early payment fees, and if you do repay early, you’ll save on fees. However, since you pay most of the fees in the first two months of the repayment schedule for the six-month option, the savings would be minimal. Repaying early makes more sense with the 12-month option, but only if you repay within the first six months.

Best uses: Kabbage is a good option for accessing working capital and covering day-to-day expenses, such as payroll and inventory.

OnDeck is a good option if you:

  • Need fast cash for a large expansion or working capital

  • Need to borrow more than $250,000

OnDeck’s term loans range from $5,000 to $500,000 and provide a lump sum of cash at closing that you repay daily or weekly over three to 36 months.

Credit lines go up to $100,000 and are repaid weekly. (Read our OnDeck review.)

Minimum qualifications: To qualify for a term loan, you need to have been in business for at least one year, earn a minimum of $100,000 in annual revenue, have a personal credit score of 600 or better, and have had no personal bankruptcies within the past two years.

For the line of credit, you need to be a majority owner of the business with a minimum personal credit score of 600. The requirements for annual revenue and time in business are the same as for OnDeck’s term loans.

Most OnDeck customers have personal credit scores between 680 to 720, revenue exceeding $500,000 and time in business of four to six years.

For both products, you’ll sign need to sign a personal guarantee. However, unlike OnDeck’s term loans, its lines of credit don’t require a lien on your business’s assets.

Speed: The application process is simple and takes about 10 minutes. You receive a loan decision within minutes and access to funds in as fast as the same day for loans and instantly for lines of credit withdrawals between $1,000 to $10,000. You can apply online or by phone. Find out more about the application process in our OnDeck step-by-step guide.

Costs: The APRs for OnDeck’s term loans range from 9% to 99%, which includes an origination fee of between 2.5% to 4% of the total loan amount. The fee drops to between 1.25% to 3% for your second loan and 0% to 3% for all loans thereafter.

There are no prepayment penalties, and OnDeck offers prepayment options that include potential interest rate reductions. Payments are deducted automatically from your business bank account.

OnDeck’s lines of credit have APRs between 11% to 61.9%. You repay each individual draw on the credit line weekly.

Best uses: OnDeck’s term loans generally are best suited for business owners who need a significant amount of money to buy equipment, open a new location, hire employees or make a large inventory purchase. Its lines of credit are a good option for businesses that need working capital or help to handle unexpected costs.

Evaluate small-business loans carefully

If neither Kabbage nor OnDeck is right for you, you have plenty of other financing choices depending on your financial situation and needs. When shopping for loans, compare APRs, the true cost of borrowing including all fees. NerdWallet’s small-business loans comparison tool can help: