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OnDeck Business Loans Review

Founded in 2007, OnDeck has changed the small business funding landscape by essentially tearing the old system out at the roots and starting over.

While traditional bank-issued loans involve reams of paperwork and require a sterling credit rating, OnDeck's approval process is fast (typically between five and ten minutes), and requires far less paperwork to get started. That's due in part to how the company qualifies borrowers, since they take the overall health and performance of a business into consideration in addition to the borrower's credit score.

This approach has enabled a wider range of borrowers -- many of whom might find their options either sharply curtailed, or nonexistent -- to get the funds they need to sustain or grow their businesses.

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Loans Offered

Short Term Loans

Available for 3-12 month terms, short term business loans are best for projects that promise a quick ROI. That can include seasonal needs, remodels and renovations, and other small purchases. Interest rates range from as low as 9% to as much as 98%,* with the average coming in at 19%. Origination fees start at 2.5% of the loan amount and decrease with subsequent loans to 1.25% to as little as 0% of the loan amount.

Long Term Loans

Issued for terms of 15-36 months, long term loans are better suited to business expansion, equipment purchases, R&D, and the opening of new locations. Interest rates may be as low as 5.9% but average 30%.* As with short term loans, origination fees start at 2.5% of the loan amount and decrease with subsequent loans to 1.25% to as little as 0% of the loan amount.

Flexible Working Capital

This allows your business to draw cash at any time using your business checking account. While interest rates range between 13.99% and 36.00%,* you will only be charged interest on the amounts withdrawn. This line of credit works best for businesses with infrequent or unpredictable cash needs. Repayment is on a weekly basis, and there is a $20 monthly maintenance fee (but no fees for drawing money).

Who Qualifies, and How to Apply

It's worth noting that there are businesses that are not eligible to receive funding through OnDeck, including nonprofits, religious institutions, attorneys, realtors, blood banks, and others. However, for businesses that don't fall into one of OnDeck's restricted categories, the qualifications and the application process alike are quick and easy.

As mentioned above, the criteria to borrow are looser here than with other lenders. Your business needs to be in business for only one year (compared to two years for most businesses). The borrower's credit score should be a minimum of 500 (whereas other lenders require a minimum that typically ranges between 600 and 650), while revolving lines of credit require a 600 minimum credit score.

Annual revenue should be $100,000 for a loan, or $200,000 for a line of credit, though these requirements can change depending on your credit score and the amount of money requested.

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Other Services Offered

While OnDeck does not offer the wide range of business services typically offered by banks, their support is less bare-bones than their competitors'. Whether or not a business is approved for a loan, OnDeck can connect prospective borrowers with SCORE (the Service Corps of Retired Executives), a nonprofit that offers mentoring, counseling, workshops, and free business tools to small businesses and solo entrepreneurs. The organization's counsel is useful at all stages of business, from startup to the ins and outs of day-to-day operation.

Case Studies

Burton Services

Nathan Burton, the owner of professional lawn care company Burton Services, had difficulty finding funding through the usual channels. He wanted to make a large equipment purchase, and found that a traditional business loan wasn't an option. While initially skeptical of OnDeck, he appreciated the simplicity of the loan process. To his surprise, he received the funds within two days, and was able to complete the purchase without a significant disruption to his cash flow. Thanks to OnDeck, Burton was able to expand his business.

Two Guys Auto Supply

Johnny Burns founded Two Guys Auto Supply with a friend after spending 17 years working as a salesman for auto paint companies. Two Guys got off to a slow start selling auto paint and detailing supplies. The partners decided they wanted to expand, but realized they would need additional funding to make that happen.

Within two days of filling out their OnDeck application, Burns had $50,000 in hand to expand the company's inventory and options. Perhaps best of all, the money allowed Two Guys to take advantage of better wholesale pricing through volume discounts, while also expanding their product line. The company has experienced 59% growth since taking the loan.

McClary Brothers

It's fitting, perhaps, that a nontraditional lender would work with a nontraditional company. Just ask Jess McClary, owner of McClary Brothers Drinking Vinegar. Rather than the stuff you'd find in your salad dressing, McClary Brothers produces vinegars from local produce with flavors like Thai Basil, Michigan Apple Pie, and Pineapple & Fennel Seed, which are used for cocktail mixers and "shrub soda."

The company faced low inventory going into the holidays, but thought that it would be too late to get a loan because it was late in the year. Their $15,000 loan from OnDeck was quick and easy, and the infusion of cash helped them ramp up production to keep pace with demand.


Businesses can effectively get a one-year head start over other lenders due to OnDeck's looser lending requirements, the application process is truly painless, and the quick turnaround from application to funding can make all the difference when time is of the essence in taking advantage of unexpected emergencies -- or opportunities.

Repeat borrowers get reduced rates. And what's more, the loan can assist businesses in building credit, meaning that it can be a stepping stone to getting bank financing for which you may not currently be eligible.

*Interest rates will be determined by creditworthiness, payment history, and business performance. Rates listed to not include fees.