OnDeck Review: Flexible Loans for Small Businesses

October 19, 2016 / Reading: 5 minutes

Small business loans can be slow, inadequate, or just plain unachievable for many businesses these days. There are alternatives out there that try to provide opportunities to those who have been left behind during the tightening of the financial sector.

OnDeck Capital expedites the loan application and expands its offerings to allow those who may be turned down at commercial banks for a small business loan.

What OnDeck offers.

OnDeck caters to small business owners looking for funding by offering two financing products that are uniquely different. Let’s take a closer look at these 2 options and how they can benefit your business.

  1. Term Loans : With terms ranging from 3 to 36 months, these types of loans allow businesses to receive up to $500,000. They can be repaid either on a daily or weekly basis.

  2. Line Of Credit : OnDeck’s flexible revolving lines allow businesses to keep a consistent flow of cash going where they only pay interest on funds they draw.

Loan amountUp to $500,000Up to $100,000
Estimated APR10 – 96%14 – 40%
Repayment termUp to 36 months6 months
RepaymentDaily or WeeklyWeekly

Advantages of Using OnDeck.

OnDeck’s main focus is on speed and making the application process as painless as possible. For small businesses that have grown frustrated with the whole “bank experience” this can be a great alternative to bank loans as it offers a variety of advantages.

  • Fast and straightforward process : It’s easy to apply for a loan with OnDeck, that’s the biggest draws for small businesses looking for alternative financing. You can simply go online and fill out the application or call them up.
  • Same day approval : After supplying the necessary information (tax ID, credit card history, and other personal identification), it typically will only take a few minutes to get approved, nearly instantaneous online.
  • Fast (next day) funding : If your application gets approved on a normal business day, you can expect your cash deposit by the next day. That’s faster than any other standard business loan application process by as much as a week or even months. That puts services like OnDeck into a new category of cash-advance and investment opportunities that may come across a fledging business.
  • Easy to qualify : The minimum amount of business experience needed for your company’s application is one year, or nine months for a line of credit offer.

Part of the reason why OnDeck can process these loan applications so quickly is that they eliminate the additional qualifiers that the banks have to look at when considering “credit worthiness” and risk assessment. There are no collateral requirements or long histories of business transactions to dig through.

Potential Setbacks.

Don’t expect to get a great deal on your loan in terms of interest rates. Even the best case scenario will have you looking at an APR of at least 10%, but with rates over 50% not being uncommon. This APR is inflated due to origin fees, a monthly credit fee (although it is waived off if you meet certain withdrawal requirements). The sticker shock is real with alternative financing, it’s not for the conservative investments or non-emergency situations.

It only take a few minutes to get approved for OnDeck’s Term Loans, and you can expect your cash deposit by the next day.

While OnDeck doesn’t require collateral in the form of traditional or personal assets, it does utilize a non-specific lien that is used against the business’s assets as security.

Like most loan specialists, OnDeck additionally needs borrowers to sign an individual ensure, a contract that says the moneylender can pursue a borrower’s assets, home resources in case of default. Inability to reimburse the advance could harm your own FICO rating.

OnDeck deducts an altered day by day or week after week installment from your business ledger. Term advances are reimbursed every day or week by week, while credit extensions are reimbursed week by week. These regular installments won’t be an ideal choice for organizations with inconsistent income.

Whether borrowers reimburse term advances day by day or week after week hinges on upon certain factors, like: time in business, industry, financial assessment, and income. Ideal candidates will probably get the week after week reimbursement choice on term credits.