OnDeck helps small businesses acquire loan and credit facilities that otherwise have no option of getting it from any other channel. Going to mainstream banks or financial institutions is really not possible for such businesses as they do not have proper access to documentation and paperwork. Many a times, such small businesses do apply for bank loans and after months of waiting their loan applications are generally declined due to lack of credit score, or collateral or business experience or many other reasons. Many times business owners are also intimidated by the big banks and never approach a bank for loan either. This leads them to a great credit option which they can easily avail in the form of OnDeck.
OnDeck offers them personalized service and with their dedicated team of experts, helps them to find out what their financial requirements are and come up with a plan to solve their cash flow requirements. There are many benefits of using OnDeck for small business owners, apart from the fact that they are accessible but also quite approachable and easy going. The business owners can:
- Apply for loans in just minutes
- They can receive funding in as fast as within 24 hours
- They can get personalized help and support from the dedicated loan specialists at OnDeck
Loans for Small Businesses
OnDeck focuses on providing loans and credit facilities to small business owners who have no access to external finances apart from their own savings and borrowings from friends and family. Many a times such business owners end up resorting to selling their assets in order to raise some finance for their business needs and requirements and other times they are forced to shut down a lucrative business due to lack of funds. OnDeck is available to help provide finance to such types of businesses on easy terms and conditions. There are not many pre requisites that are there in order to qualify for the loan from OnDeck. Below are a few features that are required in order to be eligible for a loan from OnDeck:
To be eligible for a loan from OnDeck the time in business for a company needs to be at least a year.
- The annual revenue of the business should be $100,000 or greater in the past 12 months.
- The personal credit rating or the credit score of the business owner should be at least 500 or plus.
One feature of OnDeck that is they provide access to the business owners to a nonprofit organization called “SCORE” and has around 11,000 business executives who volunteer in order to provide small businesses confidential and free business and financial advice, as lots of times small business owners have no idea regarding how to manage their financial position and their cash flows appropriately. By having access to SCORE, the small businesses can have access to various tools regarding business credit financing as well as educational tools. SCORE also provides long term business planning and strategy advice to the business owners to help them make informed business decisions. Lastly, SCORE also helps businesses figure out whether or not OnDeck will be able to finance their cash flow requirements or not.
There are a few industries which come under the restricted list of business that OnDeck does work with. Below is the list of those industries, if you business fall in one of them then OnDeck would not be able to conduct business with you.
OnDeck does not conduct business with the financial lending institutions like Banks or Credit Unions or Mortgage Lenders. They do not even do business with Non Bank Finance Companies or even with Money Services Businesses or with Collection Agencies or Debt Buyers. Moreover, other businesses like, Real Estate Agencies or Brokers are also restricted. Other sellers like magazine subscriptions, payroll companies, attorneys or call centers are also on the prohibited list. Furthermore Adult Entertainment, Lotteries or Raffles, Gaming and Gambling as well as Guns and Ammunition Sales or Manufacturing is also not allowed. Other businesses which are also included in the restricted list are, Travel Agencies, Energy, Religious Organizations, Government and Non-Profits organizations and many more.
Ondeck offers two types of lending products to the customers, the short term loans and the long term loans.
OnDeck Term Loans
There are various financial products available at OnDeck for businesses that they can choose from. The business may get a loan for up to $500,000 with an annual rate of interest for as low as 9.99%. The term loans which are offered are short term and long term loans.
Short Term Loans
The short term loans, as the name suggests are for short term that is for around 3-12 months. Such loans are good for those kinds of projects which have immediately have a return on their investments. The short term rates of interest are usually as low as only 9% simple interest.
- The short term business loans may be used by the business for:
- For refreshing, renovating or updating their business premises or locations
- For buying inventory that has a quick turnaround period
- For using it on short term marketing campaigns
- For seasonal hiring purposes
- For seasonal purchase of inventory
- For meeting shortages in working capital
Long Term Loans
The long term loans, as the name suggests are for longer period than a year. The typical period ranges from around 15 months to 36 months period. The long term rate of interest is usually as low as 9.99% that is calculated annually. The long term loans are generally used by the business for funding larger projects that take up a longer time to pay back. It is also used for:
- Business expansion purposes
- Opening up in new locations
- Purchasing large scale inventory
- Investing in large scale equipments
- For new product development purposes
The Rate of Interest and Fees
The rate of interest is usually calculated as simple terms when it comes to short term loans, as it needs to take into account the number months the loan is taken for. The long term loan however is calculated on yearly or annual basis. There is an option of requesting for the lowest possible rate of interest but that depends upon the business credit history, how credit worthy they are, their typical cash flows and how their payment history has been like with OnDeck, if they are a repeat customer.
There are other fees which are also calculated, which is a onetime fee in order to cover the cost of processing and for servicing the loan that is being offered. The fees of the loan are as follows:
- For the first loan: 2.5% to 4% of the loan amount
- For the second loan: 1.25% to 3% of the loan amount
- For the third loan and plus: 0% to 3% of the loan amount
How to Qualify
In order to be eligible for a loan there are certain pre requisites that have to be fulfilled, making sure the business does not belong in the restricted industries or businesses. The main features a business must have in order to qualify for the loan are:
- The company needs to be in business for at least one year when they are applying for the loan.
- The business should be making at least $100,000 and more in their gross annual revenues
- There should be at least one owner of the business who should have 500+ personal credit score.
How to Pay It Back
There are ways to pay back the loan, obviously in installments which the lender can discuss with Ondeck to decide how they will be able to pay the loan back; it may be customized to their options or their requirements. The pay back is usually taken out in the following ways:
- The payments are fixed which may be paid either weekly or even on a daily basis
- They may be deducted automatically from the business bank account
- There are also options for pre payment if the business wants. They are usually based on the assessment of the business and their creditworthiness
How is the Rate Determined?
The rate of the business loans are determined based on the assessment that is carried out by OnDeck and is based on the business owner’s personal credentials as well as the business credit profile, its cash flows as well as their potential. The amount of loan that may be offered to the business also depends on the combination of these factors. These are determined based on the risk assessment, creditworthiness or the business at the time when the company is applying for the loan. So, the size of the loan, the term of the loan and also the interest rate that will be charged to the company will be dependent upon these factors and on the analysis of the business and any possible history with OnDeck.
OnDeck Lines of Credit
OnDeck also offers credit line facilities to the business based on their credentials. The lines of credit that they offer are usually for an amount up to $100,000 and for APR for as low as 13.99%. The lines of credit allow customers to have access to ongoing credit facility without having to apply for a new loan each time.
Flexible Working Capital
There are options of flexible working capital that a business may borrow from OnDeck. It is quite a simple process where the business will get a lump sum amount in their bank account and they can use whatever sum of money they require and only pay back the amount that they have actually used and even the rate of interest is applicable only on the amount of money that is used. The balance can be paid back early any time by the business.
The credit line product can be used for various purposes such as:
- It helps the business to manage the account receivable gaps that may exist
- It helps them to take advantage of any new business opportunity that may arise
- It helps the business to take care of any unexpected or unforeseen business expenses that may arise
- It acts as a cushion against uncertainty
- The amount helps to meet shortfalls in cash
- It helps to meet cash flow requirements during times of low cash inflows
- It helps to meet sudden or seasonal changes in business activity
How to Qualify
In order to be eligible for a line of credit that is being offered by OnDeck, there are certain pre requisites that have to be fulfilled. The main features a business must have in order to qualify for the loan are:
- The company should have been in business for at least one year
- The gross annual revenue of the business should be at least $100,000 plus
- There should be a majority owner with a 600 plus rating in their personal credit score
Rates of Interest and Fees
The rates of interest for the line of credit are as low as 13.99% APR. The amount that may be offered to the business as well as the rate that would be offered are however, dependent upon the risk assessment performed by the financial experts at OnDeck that is based on their personal and business credit worthiness. There are also $20 worth of monthly maintenance fees, this amount however may be waived off by Ondeck of the company decides to draw an amount that is equal or greater than $5,000 in the first five days after they have opened the account. There are no other fees for drawing the money.
How to Pay It Back
There are ways to pay back the loan by the customer by discussing with the loan officers about how and when they can pay it back and the loan officers can customize their pay back plan by suggesting a plan where the lender may do the following:
- The loan may be paid as weekly payments
- It may be deducted automatically from the company’s business bank account
Why use OnDeck
There are many business onwers, with more than 70,000 business onwers have been working with OnDeck for years now. There are so many benefits of using the facilities from OnDeck like:
- Easy application and quick funding with their simple process and least amount of paperwork and have the cash disbursed to your account as quickly as possible
- Helps to build good credit. The company does not need to be in business for decades to be eligible for a loan from OnDeck, as long as they meet the basic criteria for loan application, they can start a credit relationship with OnDeck. This way the business can also have a credit history as well.
- Services offered online and offline. The services of OnDeck are offered online through their web portal or even through their mobile application in order to check their balance, make payments or simply apply for another loan.
- Financial Advisors are available. The expert financial team at OnDeck is always there for the clients and are available to advise and guide them regarding any financial advice that they may require.
- Customer Support services. The dedicated customer support team at OnDeck is always ready to help and assist the customer whenever they need some help, the customers can call them on the helpline six times a week.
There are many customers who have used the services of OnDeck and many who are still loyal customers with OnDeck to date. Once they develop a financial business relationship that is based on mutual trust and understanding then there is no looking back. The repeat customers are also offered loans at better rates and higher than before amount may also be offered. Most of the customers have written their success stories on the website at OnDeck, where they have shared how acquiring loans from OnDeck has helped their family business or single owner business grow which they actually had given up on. Many business owners have also commented that their business has actually grown tremendously since they have started using the services of OnDeck. Customers have used the services of Ondeck for many reasons like:
- Expanding their business
- Buying supplies/inventory
- Hiring new employees
- Investing in marketing and research
- Renovating their business premises
- Meeting short falls in cash
By using the credit facilities from OnDeck, the business owners can easily make use of a lot of opportunities that they could have missed out on. They can now have access to cash flow and financial experts who can help and guide them as well. When they develop a relationship with OnDeck, they can even get better rates of interest on the loans and even faster processing and disbursement or loans. With such great financial services at their fingertips, the small business owners have no need to ever go to a traditional bank ever again!