OnDeck Business Loans

How does a small business loan from OnDeck work?

When you apply for a small business loan from OnDeck, your approval is based on your business credit score and other factors.

OnDeck says you can get a loan approved in as little as 30 minutes and get the money in your account within 2 hours. This will depend on the strength of your credit score and whether you meet all the eligibility criteria.

The loan terms can extend up to 2 years and repayments are automatically deducted from your business bank account daily or weekly.

What features come with an OnDeck small business loan?

Various features are on offer with this loan, including:

• Loan options. Ondeck offers unsecured business loans, short term business loans, cashflow loans and working capital loans.
• Quick application and turnaround. OnDeck can process applications quickly online. For larger loans you could wait a full business day to receive funds, but smaller loans can take as little as 2 hours.
• Loan specialists. OnDeck has lending specialists who can give you personal help over the phone.
• Loan amount. You can apply for a loan between $10,000 and $250,000.
• Loan terms. You can choose loan terms between 6 months and 2 years, depending on what best suits your needs and budget.
• Fees and rates. Small business loans come with a loan origination fee of 3% of loan amount, and the fee for loan renewals is 1.5% of the loan amount. Your rate will be based upon OnDeck's credit assessment.

How to get a small business loan with OnDeck

If you'd like to apply for a loan from OnDeck, your business will need to meet the following criteria:

• Have been operating for at least one year
• Have had no recent or current bankruptcy
• Have had an annual turnover of at least $100,000
• A business credit score of at least 500

High-cost financing and APR

• Financing category: Borrowers should be aware that OnDeck is often categorised as a provider of high-cost financing.
• Effective APR: While the lender focuses on transparency, the effective Annual Percentage Rate (APR) can be significantly higher than traditional secured bank loans.
• Rate estimates: Some independent reviews and user reports suggest that APRs can reach or exceed 50% for certain risk profiles, particularly when factoring in the 3% upfront origination fee and the frequency of repayments.
• Debt sustainability: This type of financing is designed for short-term capital needs rather than long-term debt sustainability, making it crucial for business owners to calculate the total repayment amount before committing.

Interest rates and the total cost of borrowing

• OnDeck provides interest rates that vary significantly depending on the unique profile of each business.
• According to OnDeck Australia, rates are determined by factors such as business credit score, annual turnover and overall cash flow.
• For businesses with exceptionally strong credit histories, rates may be comparable to traditional bank lending, while higher-risk profiles may see rates align more closely with those of a business credit card.
• It is important to note that because these are unsecured loans with short terms, the total interest paid over the life of the loan can be substantial relative to the principal.

OnDeck won't lend to businesses in what it calls temporarily restricted industries. Check if your business is eligible before you apply.

While OnDeck provides a competitive option for small business owners to consider, remember to compare all of your loan options before submitting your application.