Published By Janet Gershen-Siegel at June 4th, 2018
Itching for funding? Our OnDeck review helps you make your best possible business decision.
OnDeck is one of several online lending companies. They offer short term loans and lines of credit. We look at the specifics and drill down into the details.
OnDeck is located online here: https://www.ondeck.com/. Their American physical address is:
New York, NY 10018.
You can call them at: (888) 269-4246. You can email them at: firstname.lastname@example.org. There is no contact page but you can chat with customer service directly on their site. They have been in business since 2007.
OnDeck Online also has a Canadian division, located online here: https://en-ca.ondeck.com/. There is, in addition, an Australian division, located online here: https://www.ondeck.com.au/. There is even a Spanish version of the American site.
OnDeck also receives some small business loan referrals from Prosper. See: https://www.prosper.com/borrower/#/prospect/pre-registration.
Amounts available range from $5,000 – $250,000. You can get terms of 3 – 24 months. Your company must have annual revenue of $100,000 or more. Your own personal FICO score has to be 500 or better. And your company must be in business for 12 months or more.
In the Australian part of their site, the amounts available range from $10,000 – $150,000, with terms of 6 – 24 months.
This type of financing comes with an 8.5% – 79% APR.
Amounts available range from $5,000 – $100,000. The term is 6 months. Your company must have annual revenue of $100,000 or more. In addition, your own personal FICO score has to be 600 or better. And your company must be in business for 9 months or more.
This particular financing comes with a 13.99% to 36% APR.
Advantages include the rather low FICO score requirement for term loans. Plus there is some flexibility when it comes to term
lengths. In addition, few United States-based online lenders will loan outside of the country. But OnDeck will loan to Canadian and Australian businesses.
Disadvantages are the maximum APR for both term loans and lines of credit are extremely high. Therefore, if your company cannot pay back a loan or line of credit, it could potentially sink you financially. In addition, OnDeck requires a personal guarantee.
Companies helmed by entrepreneurs with bad personal credit would do well to take a second look at the OnDeck online lending company. However, with qualification comes a steep APR price tag and the requirement of a personal guarantee. This is somewhat understandable.
Borrowers in Canada and Australia can also work with OnDeck, although Canadian borrowers also have NUGROWTH/IBIS (http://www.nugrowthcapital.com/) as an option, although NUGROWTH/IBIS has a higher minimum personal FICO score requirement.
Entrepreneurs would probably do better building business credit and/or trying for unsecured business financing or microloans if their financial requirements are small.
Company credit is credit in a small business’s name. It doesn’t connect to a business owner’s consumer credit, not even when the owner is a sole proprietor and the solitary employee of the company. Accordingly, an entrepreneur’s business and personal credit scores can be very different.
Business credit helps to safeguard an entrepreneur’s personal assets, in case of court action or business bankruptcy. Also, with two distinct credit scores, an entrepreneur can get two separate cards from the same vendor.
This effectively doubles purchasing power.
Another benefit is that even startups can do this. Heading to a bank for a business loan can be a recipe for disappointment. But building business credit, when done right, is a plan for success.
Individual credit scores are dependent on payments but also various other elements like credit use percentages. But for company credit, the scores really only hinge on whether a corporation pays its invoices in a timely manner.
Growing company credit is a process, and it does not occur without effort. A business will need to actively work to develop business credit. Having said that, it can be done readily and quickly, and it is much more efficient than establishing individual credit scores.
Merchants are a big aspect of this process.
Carrying out the steps out of sequence will lead to repetitive denials. No one can start at the top with corporate credit. For example, you can’t start with store or cash credit from your bank. If you do you’ll get a rejection 100% of the time.
A company has to be genuine to lenders and vendors. Consequently, a business will need a professional-looking website and email address, with website hosting bought from a company such as GoDaddy.
Also business telephone and fax numbers must have a listing on 411.com.
At the same time the company telephone number should be toll-free (800 exchange or the like).
A business will also need a bank account devoted purely to it, and it has to have every one of the licenses necessary for operation. These licenses all must be in the identical, accurate name of the company, with the same company address and phone numbers.
So keep in mind that this means not just state licenses, but potentially also city licenses.
Visit the Internal Revenue Service website and obtain an EIN for the business. They’re totally free. Choose a business entity such as corporation, LLC, etc.
A business can begin as a sole proprietor. But they will more than likely want to change to a form of corporation or partnership to reduce risk and take full advantage of tax benefits.
A business entity will matter when it comes to tax obligations and liability in the event of a lawsuit. A sole proprietorship means the entrepreneur is it when it comes to liability and taxes. No one else is responsible.
If you run a business as a sole proprietor, then at the very least be sure to file for a DBA (‘doing business as’) status.
If you do not, then your personal name is the same as the company name. As a result, you can end up being personally responsible for all corporate financial obligations.
Also, per the Internal Revenue Service, with this arrangement there is a 1 in 7 chance of an IRS audit. There is a 1 in 50 probability for corporations! Prevent confusion and drastically lower the odds of an Internal Revenue Service audit simultaneously.
Begin at the D&B web site and obtain a totally free DUNS number. A DUNS number is how D&B gets a small business in their system, to produce a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s web sites for the corporation. You can do this at https://www.creditsuite.com/reports/. If there is a record with them, check it for accuracy and completeness. If there are no records with them, go to the next step in the process.
In this way, Experian and Equifax will have activity to report on.
First you should build trade lines that report. This is also called vendor accounts. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can start getting revolving store and cash credit.
These kinds of accounts often tend to be for the things bought all the time, like coffee, shipping boxes, outdoor work wear, ink and toner, and office furniture.
But first of all, what is trade credit? These trade lines are credit issuers who will give you preliminary credit when you have none now. Terms are ordinarily Net 30, rather than revolving.
So if you get an approval for $1,000 in vendor credit and use all of it, you must pay that money back in a set term, like within 30 days on a Net 30 account.
Net 30 accounts have to be paid in full within 30 days. 60 accounts have to be paid in full within 60 days. In comparison with revolving accounts, you have a set time when you must pay back what you borrowed or the credit you used.
To begin your business credit profile the right way, you ought to get approval for vendor accounts that report to the business credit reporting agencies. As soon as that’s done, you can then make use of the credit.
Then repay what you used, and the account is on report to Dun & Bradstreet, Experian, or Equifax.
Not every vendor can help like true starter credit can. These are vendors that will grant an approval with hardly any effort. You also need them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
But you may have to apply more than one time to these vendors, and you may have to purchase some things you do not really need, to confirm you are reliable and will pay on time. Consider giving nonessential items to charity.
Once there are 5 to 8 or more vendor trade accounts reporting to at least one of the CRAs, progress to revolving store credit. These are companies such as Office Depot and Staples. These companies are more likely to have supplies you need.
Use the corporation’s EIN on these credit applications.
Are there 8 to 10 accounts reporting? Then move onto fleet credit. These are businesses like BP and Conoco. Use this credit to buy, repair, and maintain vehicles. Make sure to apply using the corporation’s EIN.
Have you been responsibly handling the credit you’ve up to this point? Then progress to cash credit. These are businesses such as Visa and MasterCard. Keep your SSN off these applications; use your EIN instead.
These are businesses like Walmart and Dell, and also Home Depot, BP, and Racetrac. These are normally MasterCard credit cards. If you have 14 trade accounts reporting, then these are feasible.
Know what is happening with your credit. Make certain it is being reported and address any inaccuracies ASAP. Get in the habit of checking credit reports and digging into the particulars, and not just the scores.
We can help you monitor business credit at Experian and D&B for only $24/month. See: https://www.creditsuite.com/business-credit-monitoring. Update the data if there are mistakes or the information is incomplete.
So, what’s all this monitoring for? It’s to dispute any errors in your records. Mistakes in your credit report(s) can be taken care of. But the CRAs usually want you to dispute in a particular way.
Disputing credit report errors commonly means you send a paper letter with copies of any proofs of payment with it. These are documents like receipts and cancelled checks. Never mail the original copies. Always mail copies and retain the original copies.
Disputing credit report inaccuracies also means you specifically detail any charges you dispute. Make your dispute letter as understandable as possible. Be specific about the issues with your report. Use certified mail so that you will have proof that you sent in your dispute.
Always use credit responsibly! Don’t borrow beyond what you can pay off. Keep track of balances and deadlines for repayments. Paying on schedule and fully will do more to raise business credit scores than virtually anything else.
Growing corporate credit pays. Excellent business credit scores help a company get loans. Your lending institution knows the small business can pay its debts. They recognize the small business is bona fide.
The small business’s EIN connects to high scores, and credit issuers won’t feel the need to call for a personal guarantee.
Business credit is an asset which can help your corporation for years to come. Learn more here and get started toward growing business credit.
And finally, as with every other lending program, whether online or offline, remember to read the fine print and do the math.
Go over the details with care, and decide if this option will be good for you and your company. In addition, consider alternative financing options that go beyond lending. And these include building business credit.
This is so you can best decide how to get the money you need to help your business grow.