Avoid Business Funding Pitfalls and Let Our OnDeck Review Guide You
Need 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.
Recession Age Financing
The number of US banks as well as thrifts has been decreasing progressively for a quarter of a century. This is coming from consolidation in the marketplace in addition to deregulation in the 1990s, lowering obstacles to interstate banking. See: fundera.com/blog/happened-americas-small-businesses-financial-crisis-six-years-start-crisis-look-back-10-charts
Assets focused in ever‐larger financial institutions is problematic for small business proprietors. Big banks are much less likely to make small loans. Economic declines indicate financial institutions come to be extra careful with lending. Fortunately, business credit does not count on financial institutions.
OnDeck Review: Background
OnDeck is located online here: www.ondeck.com. Their American physical address is:
1400 Broadway
New York, NY 10018.
You can call them at: (888) 269-4246. You can email them at: [email protected]. 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: en-ca.ondeck.com. There is, in addition, an Australian division, located online here: www.ondeck.com.au. There is even a French version of the Canadian site.
OnDeck also receives some small business loan referrals from Prosper. See: www.prosper.com/borrower/#/prospect/pre-registration.
They will not work with certain industries. See: https://www.ondeck.com/restricted-industries.
OnDeck Review: Term Loans
Amounts available range from $5,000 – $500,000. You can get terms of 3 to 36 months.
Your company must have annual revenue of $100,000 or more. Your own personal FICO score has to be 600 or better. And your company must be in business for 1 year or more.
OnDeck Review: Fees
Interest rates start at 11.89% annual percentage rate (APR). The total cost of a short term loan will vary based on a number of factors, including personal and business credit scores, time in business and annual revenue and cash flow.
OnDeck Review: Lines of Credit
Get a line of credit from OnDeck for $6,000 to $100,000. The term is 12 months.
Withdraw up to $10,000 with Instant Funding.
Your company must have annual revenue of $100,000 or more. Your own personal FICO score has to be 600 or better. And your company must be in business for 1 year or more.
OnDeck Review: Fees
Interest rates start at 10.99% annual percentage rate (APR). The total cost of a line of credit will vary based on a number of factors, including personal and business credit scores, time in business and annual revenue and cash flow.
OnDeck Review: Advantages
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.
OnDeck Review: Disadvantages
Disadvantages are the maximum APR for both term loans and lines of credit are somewhat 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.
OnDeck Review: Upshot
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.
Entrepreneurs would probably do better building business credit and/or trying for unsecured business financing or microloans if their financial requirements are small.
Build Business Credit Instead
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.
The Benefits
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.
The Process
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.
Business Fundability™
A company has to be Fundable to lenders and vendors.
A Word about Building Business Credit
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.
OnDeck Review: Some Final Thoughts
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.
