OnDeck is an online lender that offers business term loans and business lines of credit. These small-business loans can be used for a variety of purposes and are well-suited for entrepreneurs who need quick access to capital.
OnDeck is known for its flexible qualification requirements and its streamlined underwriting process, allowing you to apply in minutes and — in some cases — receive financing as fast as the same day.
OnDeck is best for borrowers who:
Need cash fast: You can apply for a loan from OnDeck, online or over the phone, in as little as 10 minutes. If you’re approved for a term loan ($100,000 or less), you may be able to qualify for same-day funding. If you’re approved for a business line of credit, on the other hand, you may be able to use instant funding to withdraw $1,000 to $10,000 from your line and receive it within minutes.
Don’t meet the eligibility requirements of other lenders: OnDeck considers borrowers with bad credit (the lender requires a minimum FICO score of
625 or higher) and at least one year in business. OnDeck doesn’t require you to put up physical collateral to secure your loan. However, the lender will take a general lien out on your business assets and ask you to sign a personal guarantee.
Can afford frequent payments over a short term: OnDeck term loans will require automatic daily or weekly payments (depending on the loan amount and term length). Repayment terms max out at 24 months. With an OnDeck line of credit, on the other hand, you’ll have automatic weekly or monthly payments with a 12-, 18- or 24-month term.
OnDeck loan features
OnDeck offers a business term loan and a business line of credit.
The term loan is available in amounts up to $250,000 and is well-suited for one-time investments in your business, such as opening a new location or renovating your space. The line of credit is available in amounts up to $100,000 and is a good option for working capital needs, like buying inventory or covering payroll.
Here’s what you can expect from OnDeck’s financing, based on loan type.
Line of credit
$5,000 to $250,000.
$6,000 to $100,000.
Estimated APR range
99.9% (based on loans originated in the half-year ending March 31, 2023; minimums provided are rates that at least 5% of customers received).
77.9% (based on loans originated in the half-year ending March 31, 2023; minimums provided are rates that at least 5% of customers received).
$20 monthly maintenance fee. This fee can be waived for your first six months if you withdraw $5,000 or more within one week of opening your line of credit.
No draw fees or prepayment penalties.
Late payment and returned payment fees may apply based on the information in your loan agreement.
Up to 24 months.
12, 18 or 24 months.
Daily or weekly.
Weekly or monthly.
As fast as the same day for loans up to $100,000. Other criteria may apply to receive same-day funding.
As fast as the same day. Instant funding (within 30 minutes) may be available for withdrawals between $1,000 and $10,000.
OnDeck loan requirements
To qualify for a term loan or a line of credit from OnDeck, you’ll need to meet the following minimum criteria:
OnDeck also requires that you have a business checking account. Financing from this lender is not available to businesses located in Nevada, North Dakota or South Dakota.
Where OnDeck stands out
OnDeck is a good option if you need fast access to short-term financing. You can submit an application online or over the phone in as little as 10 minutes by providing basic information about yourself and your business. You may also be required to upload a few pieces of documentation, such as the last three months of business bank statements.
If you’re approved, an OnDeck loan advisor will reach out to help you review your options and complete the checkout process. OnDeck can approve and fund some applications as fast as the same day.
You can access same-day business funding for term loans up to $100,000. For lines of credit, you can draw on your line in amounts ranging from $1,000 to $10,000 and receive funds in just minutes. However, you may need to meet specific eligibility requirements to get same-day financing, so you’ll want to talk to your loan advisor for additional information on funding speed.
In general, OnDeck loans can be available in two to three business days.
Flexible qualification requirements
OnDeck has more lenient eligibility requirements compared with traditional and other online lenders. OnDeck can be a good option for bad credit business loans (FICO score below 630), as you can qualify with a minimum credit score of
625. And although some online lenders will work with younger businesses, startups with at least one year in business can qualify for a loan from OnDeck.
Can build business credit
OnDeck reports your payment activity to three business credit bureaus: Experian, Equifax and PayNet. Therefore, if you make timely payments, you can use your OnDeck loan to build business credit.
Building business credit can help you qualify for larger loan amounts, longer repayment terms and more competitive interest rates in the future.
This benefit differentiates OnDeck from similar online lenders — like Fundbox, for example — which don’t report to the commercial credit bureaus.
Where OnDeck falls short
Can be expensive
OnDeck loans can have high interest rates compared with traditional and other online lenders. The lender charges interest as a factor rate, which can range from 1.037 to 1.45 for term loans and 1.10 to 1.30 for lines of credit. These term loan factor rates translate to annual percentage rates ranging from
99.9%, while rates for lines of credit translate to APRs ranging from
77.9%. These APRs are based on loans originated in the half-year ending March 31, 2023, and rates change slightly each quarter. Minimum rates are those that at least 5% of customers received.
These APRs also include origination fees on term loans and a $20 monthly maintenance fee on lines of credit. If you draw $5,000 or more within one week of opening your credit line, you can waive the maintenance fee for the first six months. However, some business line of credit lenders don't charge an account maintenance fee.
OnDeck’s term loan and working capital line of credit have shorter repayment terms — up to 24 months — which results in higher payment amounts. Term loans are repaid daily or weekly, while lines of credit are repaid weekly or monthly.
This high frequency of payments can be difficult for businesses with uneven cash flow.
Early repayment may not save interest costs
OnDeck doesn’t assess prepayment penalties, but repaying your loan early won’t necessarily save you money on interest costs.
In order to prepay your loan and have 100% of the remaining interest waived, you need to qualify for OnDeck’s prepayment benefit. Loans with the prepayment benefit will have a higher interest rate, which may increase the total cost of your financing.
If you don’t qualify for the prepayment benefit, but you still pay off your loan early, you’ll owe 75% of the remaining interest that was disclosed in your original loan agreement.
Other lenders may allow you to simply prepay your loan, without penalty, which will save you on interest costs.
Alternatives to OnDeck
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, Fundbox may be more affordable, with an estimated APR ranging from
79.8%. And unlike OnDeck, Fundbox does not charge an account maintenance fee and you can repay your credit line early to save on interest costs.
Fundbox is a good option for both startups and businesses with bad credit. You’ll need a minimum credit score of
600 and at least six months in business to qualify. Fundbox can approve and fund applications in as little as 24 hours.
If you’re looking for a larger amount of financing and have a more established business, Funding Circle offers business term loans of up to $500,000. To qualify, you’ll need a minimum credit score of
660 and at least two years in business.
Funding Circle offers terms of up to seven years, set monthly payments and no prepayment penalties. Loans can fund within two days from your initial application, with APRs starting as low as
Compare business loans
The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. NerdWallet recommends comparing small-business loans to find the right fit for your business.