Better Than the Bank? How OnDeck Has Changed Small-Business Funding

In the past, when small businesses needed loans to grow or get through lean times, they typically had only brick-and-mortar banks or credit unions as options. But getting conventional loans can be difficult, especially at large banks, which approve less than 15% of all their business loan applications.¹ And when a bank does approve a loan, it’s often at the end of a lengthy process that fails to meet the business owner’s urgent need for cash.

Today, online lenders like OnDeck offer alternatives to those institutional funding sources. Whether you need financing to expand or renovate your business, purchase inventory or equipment, hire and onboard new employees, cover payroll, consolidate debt, launch a new marketing campaign, or boost your cash flow during the slow season, the OnDeck experience is very different from the old days of applying for a bank loan.

Two Business Funding Journeys

Mark Kruger, co-owner of CF Webtools in Omaha, Nebraska, needed extra cash to cover payroll during the dry seasons of his business. He sought and got approval for a bank loan after submitting an extensive amount of paperwork, but it was for less than a third of the amount he requested. Then he discovered OnDeck, where the application process was much easier and he was able to get the funds he needed.

“The entire application process was online, which was fairly simple — took maybe 15 minutes,” says Kruger, who has used both a term loan and a line of credit with OnDeck. “I was approved in a very short amount of time and was very relieved to be able to make payroll.”

When Ghassan Bilaih was seeking funding for his Irving, Texas, restaurant Gyro Oasis Deli & Grill, he found it frustrating that so many lenders required a long list of documents to apply. He was happy to discover that OnDeck only asked for a few bank statements beyond its simple online application form, and that it offered repayment terms that fit his budget.

“OnDeck was easy to navigate, and the process goes on autopilot after you sign the contract,” Ghassan says. “I don’t have to call to keep track of my payments. Everyone I talked to at OnDeck is professional and friendly.”

OnDeck has become a long-term partner in the financing of Ghassan’s business. He used the money from his initial loans to purchase furniture, equipment and a new POS system for the restaurant. After restructuring his last OnDeck loan, he took out another one to buy sanitary equipment, plastic shields, signs and booth separators.

For repeat customers like Ghassan, OnDeck offers a loyalty perk that is rare among online lenders. If you take out another loan with OnDeck, the company will waive all remaining interest on your current loan.^†

The OnDeck Difference

OnDeck offers a streamlined application process that is built on the foundation of the lender’s core principles.

It has a simple, three-step application process that can take as little as 10 minutes.

• Step 1: Complete the application. OnDeck will only ask for basic information about your business, along with three months of your most recent bank statements — and all of your information stays secure.
• Step 2: Get a decision. Your dedicated loan advisor will respond right away to find the business loan option that best suits your needs.
• Step 3: Receive your funds. Once you complete the online checkout, you can receive your funds as soon as the same day.^‡

OnDeck’s innovative method of assessing each applicant’s creditworthiness speeds up the review process. The company says it pioneered the use of data analytics and digital technology in small business lending. By aggregating and analyzing thousands of data points, OnDeck says it is able to assess the creditworthiness of small businesses rapidly and accurately.

OnDeck offers two lending options: a business line of credit, with repayment terms of 12, 18 or 24 months, or a term loan with repayment terms up to 24 months. Whichever you choose, your personal loan officer can tailor your repayment terms to fit your business.§

OnDeck’s Easier Loan Eligibility

Because of OnDeck’s simpler, less stringent eligibility requirements, it can be a solution when poor or insufficient business credit history and inadequate cash flow present obstacles for small-business owners seeking bank or credit union loans.

OnDeck’s minimum requirements and qualifications**

• 1 year in business
• 625 personal FICO® score of business owner
• $100K business annual revenue
• Business checking account

OnDeck’s Core Principles

OnDeck operates under six core company principles that empower small businesses and enhance the quality of the funding experience:

Responsible Business Financing

Building a sustainable and scalable model of financing that enables small businesses to thrive.

Truthful, Transparent Information

Providing our customers with complete information about our products so they can make informed decisions.

The Best Customer Experience

Ensuring all aspects of a customer’s OnDeck experience meet highest standards of excellence.

Respect for Our Customers

Serving as a trusted partner and treating our customers with respect in all matters.

Privacy and Data Security

Ensuring the privacy and security of our customers’ information and disclosing how borrower information is used.

Living by OnDeck Values

Attracting and retaining the best team of professionals in the industry.

These principles are not mere slogans. OnDeck carries them out in concrete, practical ways. To ensure that OnDeck provides an exceptional customer experience, the company’s dedicated U.S.-based loan advisors are available five days a week to give you one-on-one support throughout the entire process.

That ongoing support was a game changer for OnDeck customer Leah Retamozo, owner of the Bilingual Child Care and Education Center, a St. Paul, Minneapolis-based immersion preschool. Before coming to OnDeck, Leah had obtained small loans from banks to fund the growth of her business. But she found working with banks confusing.

“The biggest challenge with that is I feel like I continually hit a wall with a bank,” Retamozo says. “They’ll help me with one step and then it’s very hard to get to the next step. It’s very difficult to create an ongoing, growing relationship with banks.”

When Retamozo was ready to expand her preschool to a second location, she applied successfully for an OnDeck line of credit, which involved a much simpler process and gave her the financial flexibility she needed.

“The process with OnDeck was a million times easier,” she says. “The staff is amazingly easy to work with, supportive [and] responsive. And the price is not that much different when you look at conventional loans that are long-term. OnDeck has a different product — they do a shorter term, but the pricing is actually comparable.”

More Reasons to Choose OnDeck

Since OnDeck’s founding in 2006, the company says:

• It’s delivered $15 billion and counting to U.S. small businesses.
• It’s earned the A+ Rating from the Better Business Bureau.
• It’s rated 4.6 / 5 based on 4,000 reviews with Trustpilot.

Small-business owners trust OnDeck to solve their financing challenges because it offers a funding experience that customers have said is often a better fit for their needs than what they can find at a bank. From its streamlined application and one-on-one support to its transparent pricing and flexible repayment terms, OnDeck’s goal is to get entrepreneurs like you on a fast track to achieving your business dreams.

Footnote

1. Statista, “Approval rate of small businesses loans in the United States from September 2019 to March 2023, by lender type,” small-businesses-loan-approval-rates-usa/, May 2023.

Disclosures

†  Remaining unpaid interest on this loan will only be forgiven by Lender if: (i) Borrower is current on its scheduled payments with respect to this Loan and, (ii) while this Loan is outstanding, Borrower enters into a business loan and security agreement for a new qualifying term loan with Lender, a portion of the proceeds of which is used to repay this Loan in whole.

‡  Same-Day Funding is only in certain states, for term loans up to $100K. Eligibility window is Monday-Friday before 10:30 a.m.ET. If checkout is done before 10:30 a.m. ET funds will be available by 5 p.m. local time the same day. If checkout is done after 10:30 a.m. ET, or on a weekend or bank holiday, it will not qualify for Same-Day Funding and funds will be deposited within 2-3 business days.

• Eligibility for the lowest rates is very limited, available only to businesses with the strongest creditworthiness and cash flows, and typically businesses that have shown an excellent payment history on prior loan products with OnDeck. The average rate for term loans is 60.9% APR and the average rate for lines of credit is 52.6% APR. Averages are based on loans originated in the half-year ending March 31, 2023.

**  There are some industries OnDeck cannot service (see list of restricted industries). In addition, OnDeck does not lend to businesses in North Dakota. Other underwriting requirements may apply.