OnDeck Online Term Loan: Overview
Deck Capital is an online lending company that offers quick loans to small and medium business enterprises without tedious paperwork.
It started operation in June 2012 and is headquartered in New York, USA. It has since extended its operation to Arlington, Virginia, Denver, Colorado, Toronto, Montreal, Sydney, etc., to accommodate its growing customer base.
Minimum Credit Score
You need a minimum credit score of 600 to be eligible for an OnDeck small-business loan.
- Quick loan approval
- Low credit score requirement.
- Little or no paperwork is needed.
- High interest rates because of the fixed-fee structure.
- Frequent and tight repayment schedules
- Business lien and personal guarantee are compulsory.
What Should You Know About OnDeck?
OnDeck Capital offers prompt and expedient loan services. The company stands out because it requires fewer qualifications than most other financial institutions. But, unfortunately, borrowers might have to pay a higher annual percentage rate (APR) during loan repayment.
The following are the upside of using the OnDeck loan service:
OnDeck offers small and medium businesses the opportunity to get liquidity within the same business day they apply for the loan. Within 10 minutes, you could finish a loan application on your mobile device or PC without leaving your location.
Once that application is approved, you can immediately access a line of credit that allows you to withdraw between $1,000USD to $10,000USD or a term loan, depending on your needs.
Have Average Personal Credit Score
All you need to access a small-business loan with OnDeck Capital is a minimum personal credit score of 600.
Huge, But Often Unexpected Expenses: Since it is pretty easy to access OnDeck small-business loans, you can easily have funds to meet large and unexpected financial needs.
Have Irregular Cash Flow
OnDeck’s line of credit can be used to smoothen rough financial patches that you might be experiencing.
OnDeck came up with two loan types to make its services available to different business owners.
The OnDeck term loan
You could access a loan that could be anything around $5,000 to $250,000 with an APR of 9% to 99%. However, borrowers are expected to repay the loan daily or weekly for a duration of 3 to 36 months.
Here’s what you need to be eligible:
- A credit rating of 600+.
- You need to have been in business for at least a year.
- You have not been bankrupt in the last two years.
- You must provide a personal guarantee.
OnDeck line of credit
With an OnDeck line of credit, qualified businesses can access up to $100,000 with an APR of 11% to 61.9%. But they are also required to make weekly payments.
Here’s how to be eligible:
- You need at least 600+ as your credit score.
- Your business has to be up for at least one year.
- Yearly revenue of $100,000+.
- You have not been bankrupt in the last two years.
- A personal guarantee is a must-have.
Why Should You Use OnDeck?
Fast and easy
A borrower can complete an OnDeck loan application within 10 minutes. The best part is that borrowers can make an OnDeck application on a mobile device or the internet in that time.
Some of the things you would need to complete a loan application include your business tax ID, bank statements (at least three months), your driver's license number, and your Social Security Number (SSN).
Once your loan application is approved, an OnDeck loan advisor contacts you within 24 hours of completing the application (as long as it is a business day) to review your offer and complete your online checkout.
OnDeck claims that you can receive funds from them within a business day once the loan application has been approved.
Lesser qualifications than banksGetting a loan from a brick-and-mortar bank often entails using your home or personal assets as a surety. However, OnDeck loans are more flexible as they require less stringent terms to qualify.
Cheaper loans for repeat customersWith OnDeck’s term loans, borrowers get a one-time origination fee of about 2.5% to 4% of their first loans. The fee is reduced from 1.25% to 3% for the second loan. The third and other successive are subject to 0% to 3% interest rates.
Build business creditYou could shore up your business credit once you can make timely payments on your OnDeck loans. The reason is that OnDeck provides information about your payment activity to business credit bureaus like Equifax, Experian, and PayNet.
What are The Risks of Using OnDeck Liam Service?
Loans can be expensive.One of the downsides of lending from OnDeck is that their loans can be pricey. For instance, their term loans come with APRs that are anything from 9% to 99%. So you may be required to pay around 11% to 61.9% as rates if you opt for lines of credit loan type. OnDeck APRs comprise origination fees on their term loans and a $20 monthly maintenance fee for their lines of credit. The maintenance fee is waived for the first six months for borrowers who draw $5,000 or more within the first five days of opening their credit line.
Both lien and personal guarantee are required.OnDeck term loans require a blanket lien on your business’s assets, and borrowers are required to sign a written statement which states they can forfeit their assets if they fail to repair the loan. In addition, borrowers risk destroying their credit scores if they fail to repay their loans.
Frequent repaymentsAnother shortcoming is that OnDeck subtracts fixed payment (weekly or daily) from their borrowers’ business bank account. For term loans, fees can be paid daily or weekly, while weekly payments are made for lines of credit. This could be a heart concern for businesses with irregular cash flow.
No benefit to early repaymentsYou don’t get any incentives for repaying an OnDeck loan early since they require you to pay a fixed amount of fees.
Unsuitable for some businessOnDeck works best for small businesses that make $100,000 to $5 million as a yearly revenue.
While this is not financial advice, it is safe to conclude that OnDeck small business loans are a great option if you understand how the terms and requirements work. Our analyses are based on the company’s APR, history, benefits, and ease of obtaining the loan. However, you may decide to check out other lending companies if their terms and conditions are tedious for you.We hope that the review offers valuable insights that help you make the right decision.
Frequently Asked Questions About OnDeck
Yes, they report your loan repayment record to the three business bureaus. This may be good or bad news, depending on how often you repay the loans. Keeping a clean OnDeck record boosts your business reputation, which comes in handy when filing for other business loans.
Considering that OnDeck approves loans the same day you apply, requires less stringent qualification, and charges competitive origination fees, it should come close to the top on your list of best lenders.
At the time of this writing, OnDeck only offers direct lending services and acts as the sole provider of every loan.