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On Deck vs Funding Circle

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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 500 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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FUNDING CIRCLE

Funding Circle is a great choice among peer-to-peer lending companies. Its cofounders created the company as small business owners themselves, who were frustrated with their attempts to access financial assistance to grow their business even when their company was thriving. Funding Circle was designed to be a better solution for American small business owners, although their customers come from not just the US but also the UK, Germany, Spain, and the Netherlands. More than 15,000 loans have been funded through Funding Circle since 2010, with a total of more than $2 billion loaned.

One thing that makes Funding Circle stand out among providers of business loans is their transparency throughout the entire loan process. While some companies make it difficult to determine interest rates and fees without reading the fine print, Funding Circle clearly lists every possible cost on their Rates and Fees page:

  • Origination fees range from 0.99% to 5.99%v
  • 12-month loans have interest rates from 5.49% to 23.29%
  • 24-month loans have interest rates from 7.99% to 25.79%
  • 36-month loans have interest rates from 8.99% to 26.79%
  • 48-month loans have interest rates from 9.79% to 27.79%
  • 60-month loans have interest rates from 10.49% to 21.29%
  • No prepayment fees
  • Late payment fee: 10% of the missed payment

Not only are Funding Circle's costs and fees readily available, they are extremely competitive within the business loans market. Funding Circle loans range from $25,000 to $500,000, considerably more than many of the lenders in our review.

We were also impressed by Funding Circle's A+ rating with the Better Business Bureau, as an accredited business since 2013.

In order to qualify for a loan with Funding Circle, borrowers must meet several criteria. For loans under $300,000, applicants must provide documentation of the two most recent year's business tax returns, the most recent year of their personal tax return, and the six most recent months' business bank statements, For loans over $300,000, applicants must also submit a year-to-date income statement and balance sheet, and an Outstanding Business Loans & Credit Worksheet available from Funding Circle upon request.

Those documents will be requested after the borrower has completed the short online application form and received a phone call from one of Funding Circle's specialists. They will typically call within two hours of submitting the online application. Once the borrower's information is verified and the loan is approved, funds are available within 5-10 days.

We were also impressed by Funding Circle's Resource Center, full of blog posts, videos, and other sources of information to help small businesses with their efforts to grow and succeed. The entire site is clean and easy to navigate, inspiring confidence in Funding Circle's ability to genuinely provide borrowers with an all-around excellent experience.

Because of their transparency with respect to interest rates and fees, their excellent rating with the BBB, and their deep commitment to helping small business owners get the funding to grow their businesses, we give Funding Circle very high marks and consider them an excellent choice for business owners in need of some extra funding.

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Business Loans

To help you find the Best Business Loans, TopConsumerReviews.com provides you with an in-depth comparison of On Deck and Funding Circle.

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.

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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