Merchant Cash Advance Company Review

Company Profile

OnDeck is a technology-enabled financial platform that provides loan products to small businesses. Established in 2007, the company has deployed over $13 billion to more than 100,000 customers in 700 different industries across the United States, Canada, and Australia. The company's mission is to empower small businesses with the capital they need to effectively grow their enterprises. OnDeck leverages data aggregation and electronic payment technology to evaluate the financial health of small businesses rapidly and efficiently, providing small businesses with the ability to apply for loans online in minutes, get approved quickly, and receive funds as fast as the same day.

OnDeck is recognized for its innovative approach to lending, which includes a proprietary credit scoring system called the OnDeck Score. This technology evaluates businesses based on their actual performance rather than solely on the business owner's personal credit history. OnDeck's commitment to transparency and customer service has earned it an A+ rating with the Better Business Bureau and a Net Promoter Score of 73 on its customer satisfaction surveys.

Products & Services

OnDeck offers two primary types of financing solutions: small business term loans and lines of credit. The term loans range from $5,000 to $250,000 with repayment terms of 3 to 24 months. These loans are ideal for businesses seeking a one-time infusion of capital for purposes such as purchasing equipment, inventory, or business expansion.

In addition to short term business loans, OnDeck also offers business lines of credit ranging from $6,000 to $100,000. These are revolving credit facilities, meaning as you pay back the borrowed amount, your available credit replenishes. This type of financing is suitable for managing cash flow, handling unexpected expenses, and financing short-term business needs.

Pros and Cons

Pros:
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1. Quick and Easy Application: OnDeck's online application process is straightforward and can be completed in minutes.
2. Fast Funding: OnDeck can provide funding as soon as the same business day, which is significantly faster than traditional banks.
3. Broad Industry Coverage: OnDeck serves over 700 industries, making it likely they can work with a wide variety of businesses.
4. Flexible Loan Options: OnDeck offers both term loans and lines of credit, providing flexibility based on your business needs.
5. High Customer Satisfaction: OnDeck has high customer satisfaction ratings and positive reviews, indicating a strong commitment to customer service.
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Cons:
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1. Higher Interest Rates: OnDeck's interest rates can be higher than those of traditional banks, especially for businesses with less-than-perfect credit.
2. Daily or Weekly Repayments: OnDeck's repayment schedule can be daily or weekly, which might be challenging for businesses with irregular cash flow.
3. Not for Startups: OnDeck requires businesses to have been in operation for at least one year, so it's not suitable for startups.
4. Minimum Revenue Requirement: Businesses must have a minimum annual revenue of $100,000 to qualify for OnDeck's financing.
5. Not Available in All States: OnDeck does not lend to businesses in Nevada, North Dakota, or South Dakota.

Ideal Customer

The ideal customer for OnDeck is a small to medium-sized business that has been in operation for at least one year and generates a minimum annual revenue of $100,000. The business owner should have a minimum personal credit score of 625. OnDeck's typical customer has been in business for 3+ years, has a business annual revenue of $300,000+, and has a personal FICO score of 650+.

Required Documentation

To apply for funding from OnDeck, you will need your Business Tax ID number (EIN), your Social Security number, estimated annual gross revenue, and average bank balance. You will also need to submit your last three months of business bank statements. Some further documentation may be needed, for example, to verify identities.

Industries and Restrictions

OnDeck serves over 700 industries, making it highly likely they can work with a wide variety of businesses. However, there are some industries that OnDeck cannot serve. These restricted industries include, but are not limited to, gambling businesses, government & non-profits, drug dispensaries, firearm vendors, and adult entertainment.

State of Operations

OnDeck does business in most states in the U.S. However, it does not lend to businesses in Nevada, North Dakota, or South Dakota.

Basic Qualifications

To qualify for funding from OnDeck, businesses must meet the following minimum requirements: 1 year in business, $100,000 in business annual revenue, and business owner’s minimum personal credit score of 625.

Collateral or Guarantees

OnDeck's business term loan comes with no specific collateral requirements. Instead, a general lien is placed on the assets of the business. This means that you don’t need to offer your business’s assets to back a loan and your borrowing amount won’t be limited by the value of your assets.

Alternatives

For businesses seeking alternatives to OnDeck, there are several options available. Traditional bank loans can offer lower interest rates and longer repayment terms, but they typically require a strong personal credit score, several years in business, and a solid track record of business finances. SBA loans are partially guaranteed by the U.S. Small Business Administration and offer low interest rates and long repayment terms. Online lenders typically offer term loans of up to $500,000 with repayment periods.