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OnDeck Small-Business Loans: 2024 Review

OnDeck loans are easy to qualify for and fast to fund, but the cost of capital can be expensive.
By Randa Kriss
Last updated on January 2, 2024
Edited bySally Lauckner
Fact checked and reviewed

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Our Take

The bottom line:

OnDeck loans are a good option for fast, short-term financing — especially for business owners who can’t qualify for a bank loan.
Full review

OnDeck - Online term loan

Max Loan Amount
$250,000
Min. credit score
625
Apply now

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Pros & Cons

Pros

  • Offers business lines of credit and term loans.
  • Cash can be available within the same business day for the term loan.
  • Accepts borrowers with a minimum credit score of 625.
  • Streamlined application process with minimal documentation required.
  • Can be used to build business credit.

Cons

  • Not available in North Dakota.
  • May require frequent repayments.
  • Interest rates can be high compared with traditional lenders.
  • Term loan requires business lien.
  • Early repayment doesn’t necessarily save interest costs.

Compare to Other Lenders

at OnDeck

at Funding Circle

at Bluevine

Max loan amount

$250,000

Max loan amount

$500,000

Max loan amount

$250,000

Min. credit score

625

Min. credit score

660

Min. credit score

625

Full Review

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.

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

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.
  • 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 if you opt for a term loan.
  • 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.
Term loan
Line of credit
Loan amount
$5,000 to $250,000.
$6,000 to $100,000.
Estimated APR range
35.4
% to
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).
39.9
% to
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).
Fees
  • 0% to 4% origination fee on the total amount of your loan.
  • Late payment and returned payment fees may apply based on the information in your loan agreement.
  • $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.
Terms
Up to 24 months.
12, 18 or 24 months.
Repayment schedule
Daily or weekly.
Weekly or monthly.
Funding speed
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:
  • Minimum credit score:
    625
    or higher.
  • Minimum time in business:
    12
    months.
  • Annual revenue: $
    100000
    or more.
OnDeck also requires that you have a business checking account. Financing from this lender is not available to businesses located in North Dakota.

Where OnDeck stands out

Fast funding

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
35.4
% to
99.9
%, while rates for lines of credit translate to APRs ranging from
39.9
% to
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.

Frequent repayments

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.

Looking for a business loan?

See our overall favorites, or choose a specific type of financing to find the best options for you.

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Alternatives to OnDeck

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, Fundbox may be more affordable, with an estimated APR ranging from
36
% to
99
%. 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.
» Read our complete Fundbox review

Funding Circle

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
15.22
%.
» Read our complete Funding Circle review

Compare your business loan options

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.

Apply now

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Methodology

NerdWallet’s review process evaluates and rates small-business loan products from both traditional and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings formula takes into account features we consider to be small-business friendly, including: transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to business credit bureaus and responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.

Frequently Asked Questions

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