On Deck vs Advanced Commercial Capital for April 2019

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On Deck vs Advanced Commercial Capital

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With all the difficulties in today's economy, many people are choosing to open their own business instead of working for a traditional employer. Whether you're just starting your business, expanding your already-established business, or even hanging out a shingle as an online company, it's likely that at some point you'll need a business loan to successfully meet your customer's needs and your business goals.

In the past, small business owners relied heavily on traditional brick-and-mortar banks in order to finance their business loans. Often that meant that borrowers had to rely on their own reputation and relationship with their local bank. Getting the lowest possible interest rate was also more challenging, since there were few lending options from which to choose.

ON DECK

OnDeck started in 2007 to focus on helping small businesses with a major issue: Financing. Since then, they have helped more than 50,000 small businesses across more than 700 industries in both the US and Canada with more than $8 billion in business loans and lines of credit.

There are three primary types of small business loans offered by OnDeck:

  • Short-Term Loans: Up to $250,000 with repayment terms from 3-12 months
  • Long-Term Loans: Up to $500,000 with repayment terms from 15-36 months
  • Lines of Credit: Up to $100,000

OnDeck's business loan application process is straightforward and only takes about 10 minutes to complete. You enter simple information such as your business history, your desired loan amount, and similar details. Once that is complete, OnDeck's online system evaluates your business and provides a decision in a matter of minutes. Funding can take place as soon as 24 hours later.

In order to qualify for a loan from OnDeck, there are a number of basic requirements that must be met. For example, businesses must have at least 1 year of history, one of the business owners or partners must have a personal credit score of 600 or higher, and the business must demonstrate revenue of at least $100,000 in annual revenue. While this means that OnDeck would not be suitable for pure startups, many businesses should still be able to meet Ondeck's starting conditions and quickly be on the way to securing their business loan.

One unique aspect of OnDeck's loan repayment terms is that payments are made on a daily or weekly basis, rather than the traditional monthly payments one would expect from a loan. We think this is a good feature for both the lender and the borrower. The business owner can better stay on top of their repayments, rather than experiencing the snowball effect that can occur when trying to make larger monthly payments. OnDeck benefits by lessening their risk of repayment. This may be one contributing factor to the low rates that OnDeck passes on to their borrowers.

Another feature we liked about OnDeck is their transparency with regards to fees charged. OnDeck charges low loan origination fees that top out at 2.5%, with discounted fees on subsequent loans to help build customer loyalty. Their loan interest rates are extremely competitive in the industry, averaging around 15% on their term loans and 10% on business lines of credit.

We're impressed with OnDeck's A+ rating with the Better Business Bureau, and by numerous positive reviews across a wide spectrum of businesses who recommend OnDeck's simple process, helpful customer service, and overall loan experience. For all these reasons, OnDeck is a fantastic option for businesses in need of a business loan, and they earn our highest rating.

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ADVANCED COMMERCIAL CAPITAL

Based in southern Utah, Advanced Commercial Capital provides business loans through a system known as factoring: a business in need of quick cash essentially sells its outstanding accounts receivable to a financial institution (called a "factor"), and that institution buys those accounts at a discount as its fee for the service. Those fees, which would be somewhat comparable to an interest rate on a loan, typically range from 5.5% to 10%, depending on the credit risk of the invoices purchased by the factor. Those rates are significantly lower than most business loans provided by other services in our review.

When deciding to work with a client, ACC looks to see if the business is essentially successful but having issues with managing their cash flow as they provide goods and/or services to stable customers with good credit. The initial application form is somewhat lengthy; prospective customers must provide detailed information regarding their business, including the structure (for example, sole proprietorship, LLC, and so on), owner(s), primary industry, and at least two trade references. Once the application has been submitted, ACC typically renders a decision within 72 hours. After receiving an original invoice and supporting documentation, businesses can expect to have the funds within 24 hours.

When evaluating ACC's reputability as a business loan provider, we noticed several things that could be cause for concern. First, we were unable to find a Better Business Bureau rating for Advanced Commercial Capital; along with a LinkedIn profile showing that the company has 10 or fewer employees, ACC does not seem to be a key player in the business loan market. Also, both the blog and the Facebook page for Advanced Commercial Capital haven't been updated since 2014, again leaving us to wonder exactly how active ACC is within the lending market. On a positive note, a call to the toll-free number featured prominently at the top of ACC's website was answered quickly; the representative reassured us that they are still very active in the lending industry and that they are working on updating both the Facebook page and the blog in the near future.

In summary, ACC may be the perfect lender for established businesses that want an alternative to a traditional business loan and interest rates that are potentially much lower than what they could obtain elsewhere. However, because Advanced Commercial Capital focuses primarily on factoring-type lending, they may not be the best fit for a large number of potential customers, especially those who are looking for startup cash.

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Fortunately, business owners today can choose among many lenders to find the best terms and interest rates available. In addition to the old local options, small business borrowers now have much more and better choices through various lenders on the Internet that specialize in small business loans.

There are many factors that you should consider before selecting a lender for your business loan. Some of these include:

  • Loan size and rate. How much will you be allowed to borrow? What interest rates do they typically offer on loans of that size?
  • Loan application process. When applying for your business loan, can it be completed online? Is the lending process easy and straightforward?
  • Requirements for business history. Can a brand-new business take out a loan, or is there a minimum time that the business must have been in operation in order to qualify? What other verification and/or collateral is required to secure the loan?
  • BBB rating. Does the lender have an established history of good business practices?

TopConsumerReviews.com has reviewed and ranked the best Business Loan programs available today. We hope this information helps you find the best loan for your small business at an affordable rate!



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