Finimpact

OnDeck Review: Easy Application and Fast Approval

OnDeck is a perfect option for businesses that want a substantial term loan but do not want to go through a stressful loan application process. It is best suited for established small businesses over three years old and having high annual revenue. OnDeck is not for high-growth startups or for a small business that is just beginning.

ondeck review
ondeck review
3.9
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Credit Score
Min. Credit Score 600+
Loan Amount
Loan Amount $6K- $100K
Loan Repayment
Loan Repayment 3 - 18 months
Michelle Jackson
Written by:Michelle Jackson
Freelance Financial Writer and Online Business Coach
OnDeck provides a fully automated loan service to small businesses. Its main offerings are term loans and business lines of credit. The lender has facilitated over $13 Billion in loans globally.

OnDeck is an automated online lender. It is part of the Innovative Lending Platform Association (‘ILPA’), responsible for launching the ‘Smart Box’ lending feature. The Smart Box displays the rates consumers will need to play for a loan.

Summarized Ratings

This parameter considers loan terms, repayment optionality, and loan limits. For each financing arrangement offered, each of these features was evaluated using the five-point scoring system. Then, the various scores were aggregated and averaged to establish an overall loan features score.

OnDeck gets a 3.0 for Loan Features. This slightly below average score reflects relatively short loan terms (1-2 years) and low loan limits (< $250K). The score is strengthened by highly flexible repayment options.

Pros
Discounts for repeat customers
Easy application process
Fast funding decisions
Funding in as little as 24 hours from approval
Loans available to companies with bad credit rates
Commitment to a partnership approach
Personalized approach
Cons
Lack of easily available information on interest rates
Repayment structure
Slow response times

OnDeck Review Video

Our expert, Gordon Scotreviews and describes OnDeck business loans in detail.

The OnDeck Loan Application Process

Let's look at some of the screens that you'll see when you go through the loan process.

1. First, they want to know a little about you, the business entity, and the responsibility you have.

2. They're going to ask for your social security number or other tax id and other basic stuff.

3. They ask for the amount of money you think you'll need, how soon you'll think you'll need it and what you're going to do with the loan. They just want to make sure it's going to be for business purposes only.

As you can see from these screens OnDeck makes it very easy to apply for a loan.

4. If you look at the fine print by clicking to continue on the second screen, you are consenting to receive telemarketing calls and messages including calls using an automatic telephone dialing system.

However, if it was really inconvenient, I would have expected to see more complaints from existing customers. You don't tend to see those kinds of complaints, so they must be okay about the kinds of information they try to market to you.

5. They're going to ask about your business, get your business tax id, and your bank balance. This is all standard stuff that you would expect.

6. Then they're going to ask you to provide bank statements and connect up your bank account.

First off, you need three months of your business checking account activity. This is great if you actually have a business bank account. If you don't, this probably isn't the solution for you.

The other thing that's going to happen here is that you are going to give them your banking information. This way, they can see your business statements for the last three months, and when you get approved for the loan, they will put money right into your bank electronically and automatically.

However, the other side of that coin is that when it comes time they're going to automatically take the payment out of your account to make sure that you're paying the loan according to their schedule. The schedule that you choose, daily, monthly or weekly.

That's just part of the alternative lending game. You really can't expect to work with alternative funding without recognizing that they're going to take the money according to their schedule electronically.

After breaking down the application process, let's explore OnDeck's key parameters in more detail.

What Is OnDeck?

OnDeck is an online small business lending company that offers only two loan products: lines of credit, and term loans. Interestingly, the service offers rewards for customer loyalty, and those returning for additional loans can expect better terms and lower rates. Plus, repeat customers will even have fees waived on any future borrowing. That being said, this is still a great service for brand new borrowers too, and there aren’t too many strict lending conditions.

The platform doesn’t cater to startups, though, and you'll need to have been in business for at least one year to qualify. Plus, rates can be a little high in certain circumstances and you might find quite a large variance in loan offers. Of course, your final terms will be dependent on your credit rating, and you’ll need a score of at least 600 to apply.

OnDeck Loan Features

OnDeck offers two loans – the term loan and the line of credit. The term loan is a lump sum paid upfront with fixed repayment terms. The line of credit is financed on demand. It can be drawn upon and repaid as needed. Generally, the term loan is used for a specific purpose or as a working capital loan. The line of credit is more often used by seasonal businesses with irregular cash flow or for a business that wants extra capital for smaller expenses, just in case of a liquidity trap.

Term Loan

The minimum loan amount you can get from OnDeck is $5,000, and the maximum amount is $250,000. The APR can change depending on whether or not you pay it off early. However, you have to go into this with eyes wide open because these high loan rates can be a killer if you get a loan without expecting that high APR.

Term length
3 - 18 months
Repayment period
Daily, weekly or monthly
APR range
11.98% - 46.06%
Min - Max amount
$5,000 - $250,000

Business Line of Credit

Business lines of credit allow customers to draw on a designated amount of capital when needed, taking as much or as little as they’d like. You can expect higher interest rates and maintenance fees for this type of OnDeck loan. Borrowers who choose this option find value in the flexibility. For example, a line of credit can allow an entrepreneur to deal with cash flow issues quickly as they arise.

Term length 3 - 18 months
Repayment period Daily, weekly or monthly
APR range 10.99% - 35.2%
Min - Max amount $6,000 - $100,000

OnDeck Interest Rates and Fees

The rates for OnDeck tend to be relatively high concerning the APR. But the rates are transparent from the start. OnDeck will not charge additional fees later on. In addition, OnDeck has no prepayment penalties, meaning you can pay off your loan quickly. However, there is little benefit in this, as the total repayments are fixed. The origination fees for OnDeck terms loans are between 0% – 5% on your first loan. This fee drops to 1% – 3% for your second loan and 0% – 3% for your third loan. The maintenance fee is $20. This fee gets waived for the first six months if you withdraw $5,000 or more from your business line of credit loan within the first week of opening it.

Term Loan

Origination fees Between 0% - 5%


Prepayment fees Zero - Customers are instead offered discounts for paying early
Late payment fees Not disclosed

Maintenance fees
0.4% - 0.42% of the total borrowing amount per month
Interest rates
11.98% - 46.06%

Line of Credit

Origination fees Between 0% - 5%
Prepayment fees Zero - Customers are instead offered discounts for paying early
Late payment fees Not disclosed
Maintenance fees $20 per month
Interest rates 10.99% - 35.2%

How to Qualify for an OnDeck Loan?

To qualify for this loan, you don't have to meet very strict criteria, you don't have to have huge revenues and they use the same criteria for both loans. Of course, the information we’ve outlined in the table below are just the minimum qualification criteria; other aspects, such as business reputation and cash in your business bank account, will affect your application too.

That's a pretty low bar to jump, one that most small businesses who have been around for at least a year can probably hit.

Minimum credit score 600+
Minimum annual revenue $100,000
Minimum time in business 1 year

OnDeck Customer Support

The contact center and live chat options are available between 9 AM and 8 PM ET Monday through Friday.

In rare instances, customers have reported it taking a little bit longer for the platform to respond to email queries, but this might not be a common occurrence.

OnDeck Loan Reviews

A quick scan of popular aggregate review sites will tell you just how popular OnDeck is. Despite the rates here being a little higher than competitors, customers are typically satisfied with the service. From more than 3075 reviews on Trustpilot, the platform has an amazing 4.9 stars out of 5 on average.

Customers tend to praise the easy and effortless application process, the speed at which funding is usually deposited, and the friendliness of the staff. In fact, many online reviews name service agents personally, praising them for their attentiveness.

In rare instances of criticism, users tend to focus on the high interest rates and occasional difficulty in applying for Covid relief loans. The platform regularly responds to reviews directly and is happy to answer questions via social media too.

Positive Reviews
Negative Reviews

Highly attentive customer service High interest rates
Fast application process Some difficulty with Covid relief loans

Fast funding times The platform doesn’t accept applications from those with poor credit

In-depth Look at Trustpilot Reviews

There are 3,000 reviews, 95% of them are in the excellent category. That's probably one of the best customer service records I've seen anywhere let alone in alternative source funding.


Source

According to these numbers, just over 2% of people have anything other than an excellent or great experience.

I actually dug into the reviews to see what were the average poor or bad reviews that people left and a lot of them were one-off things, nothing highly repeatable.

In fact, there was one thing that really bothered me so I did some research on it. The review said that when they had tried to go and pay the loan off early that OnDeck had penalized them for doing so. That sounds like a big red flag. However, I contacted the company and found that the information wasn't correct. Not only does OnDeck not penalize customers for paying off early, they often give an incentive for those who do.

Interesting Facts About OnDeck

OnDeck has put a lot of effort into helping its customers financially through the Covid-19 pandemic. As well as making it easy to apply for PPP loans, the platform has set up a hub on its website containing news articles, advice, and explanations of federal and state assistance programs to help customers stay afloat.

Perks and Bonuses

Small businesses looking for a financial institution that is mindful about working with customers for the financial moment that they’re currently in may want to give Ondeck a second look. Ondeck currently has a small number of financial products for their customers. Borrowers can apply for lines of credit or term loans as needed.

Flexibility

Two unique rewards Ondeck offers to its customers is a loyalty benefit that rewards returning customers with discounts on future borrowing. The second reward is a referral program that happy customers can sign up for and refer other business owners to Ondeck. It’s unclear what the payout framework is as that information isn’t provided on the website.

For borrowers who are unable to make a payment, it’s unclear as to whether or not a payment deferral is an option. There are limited details provided on the website related to additional benefits or bonuses that Ondeck offers its clientele.

Transparency

Ondeck doesn’t seem to offer customers the option to modify an existing loan agreement. While most of the details related to the Ondeck Term Loan and Line of Credits are pretty clear on the website, Ondeck could also share more information about loan rates as well.

However, the SMART Capital Comparison Tool hopes to provide borrowers with more information about the specific lending terms that may influence a borrowing choice.

OnDeck provides short-term financial solutions and the interest rate beginning at 35.9% may be a reflection of the short-term nature of the loan. Trustpilot Ondeck reviews expressed a high level of customer satisfaction, but there was some frustration expressed about loan rates and the PPP loans process. The PPP loan process in particular is no longer relevant as this product is no longer available to clients.

Technology

The Ondeck website is easy to navigate and customers are able to find the products that they’re interested in using. OnDeck users have access to an online portal and autopay option. Ondeck doesn’t have an app paired with their service.

Who Is OnDeck Not Suited For?

Ondeck is not suitable for businesses that are just starting out, as the qualifying requirements are relatively high. OnDeck has raised its minimum eligibility criteria slightly, but not as much that no one can qualify. Still, it is unlikely for young small businesses and startups to have a credit score above 600 and an annual revenue above $100,000. OnDeck is mainly suited to small to medium-sized businesses that already have a history and a good record, as they want to see some financial history before taking you on. Once you are in, your business will be well taken care of, as Ondeck has exceptional customer service.

Final Thoughts

While it’s true you’ll be paying something of a premium in terms of interest rates and fees here, this is more than made up for in the excellent customer service you’ll receive. The application process is easy to follow, funding is disbursed quickly, and the whole process is painless from start to finish.

We’d definitely recommend OnDeck small business loans for those with good credit. However, if you’re looking for cheaper rates, or are worried you may be rejected, you might want to start your search at another platform.

Frequently Asked Questions (FAQ)

Does OnDeck have fees?
es, there are several fees to be aware of ranging from loan origination fees ranging between 0-4% of the total loan for the first loan. There is also a $20 a month maintenance fee to manage the loan.
What is the maximum loan amount?
Qualified borrowers may be eligible for up to $250,000 for a short-term loan or $100,000 for a line of credit.
Does Ondeck report to credit bureaus?
Yes, Ondeck does report to all three major credit bureaus. Borrowers do need to be careful when using Ondeck because a general lien is placed on business related assets. The lien is released once the loan is paid back in full.

About the Author

Michelle Jackson

Freelance Financial Writer and Online Business Coach

Michelle Jackson is the host of the podcast "Michelle is Money Hungry." Her goal is to transform people's financial lives through increased financial knowledge.

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