Ondeck has been an industry leader for small business loan provider founded in 2006 in the US. They now operate in Canada and Australia too. Ondeck offers loans to small businesses directly or with a partnering bank in different US states. Their prime attraction for the borrowers has been easy access and fast loan processing.
Types of Business Loans:
For small businesses, there are two main categories of business loans, a term loan, and a line of credit. Small businesses can apply for SBA loans through Ondeck too. These loans can be applied online for startups or running businesses. As a borrower, you can choose from different business loan categories best matching the needs and costs for you.
Secured business Loans with Ondeck:
Any business loan backed by collateral is termed as a secured business loan. Ondeck offers a wide range of secured loans including merchant cash advance, invoice factoring, and equipment financing. Secured loans offer lower APR and extended loan amounts.
Unsecured business Loans with Ondeck:
These are Short-term loans with faster cash requirements without any collateral as a pledge. Borrowers’ credit score and creditworthiness play an integral role in securing these loans. Unsecured loans come with higher APR and total loan costs. Ondeck offers Commercial Loans, Business lines of credit, working capital loans, and short-term loans.
Loans by Specific Industry:
A unique selling proposition by Ondeck is their industry-based loans to small business owners. Ondeck combines multiple (or a single) loans to fulfill the financing needs of small businesses in a specific industry.
Small businesses can apply for SBA loans through Ondeck too. However, the loan approval terms remain the same as applying for an SBA loan directly or through banks.
Loan Costs with Ondeck:
Ondeck charges an origination fee on term loans ranging from 2.5% to 4%. For Line of Credit loans they charge a monthly $20 fee. The originating fee gets reduced for loyal borrowers with second loans onwards to as low as 0%.
Pros and Cons of Ondeck Business Loans:
- Fast loan processing with terms ranging from $5K to $500K over 3-36 months
- SMART box Capital loan comparison tool
- Low credit score requirement than banks; 600 onwards
- Online loan applications and dedicated Advisory services
- Industry-specific loan options for small businesses
- High APR as compared with banks, average term loan APR 49.06% and Line of Credit APR is 35.2%
- Fixed monthly fees with Line of Credit and high originating fees with term loans
- Unsecured loans require personal guarantee if the business has no collateral