- The Good
- Fast application process
- Quick access to funding
- Looser credit requirements
- Loyal customers are rewarded with lower rates
- The Bad
- Frequent repayments
- Borrowing can be expensive
OnDeck provides small businesses with term loans and lines of credit. OnDeck’s service is fast and convenient, making it a good option for meeting day-to-day expenses. Since credit requirements aren’t as strict, OnDeck appeals to those business owners with poor and average credit.
- The Good
- Easy application process
- Instant funding decisions
- Quick access to capital
- Good credit isn't required
- The Bad
- Fees can be high
- No long-term loan options (only six to 12 months)
- Better for short projects instead of complete funding
Kabbage provides revolving lines of credit for inventory, equipment, payroll and other expenses. Decisions are made instantly and funds arrive very quickly, which makes Kabbage very useful for small businesses with short-term cash flow needs. Kabbage is also an option for those with bad credit.
- Term Loan
- APR: 6% to 99%
- Origination fee: 0% to 4% of loan amount
- Line of Credit
- APR: 13.99% to 39.9%
- Fees: $20 monthly maintenance fee
For an OnDeck small business loan, the APR can range from 6% to 99%. For an OnDeck line of credit, the APR can fluctuate between 13.99% and 39.9%. OnDeck does reward good repeat customers with lower origination fees. This is a benefit many other non-bank lenders don’t offer. In comparison to competitors, borrowing from OnDeck is more expensive on average.
- Initial Fee Rate
- 1.5% to 10%
- Fee Rate After
For Kabbage loans, APR and fees are wide-ranging. They fluctuate based on your credit (especially your personal credit), the number of years you’ve been in business, your annual revenue and other factors. The fee rate averages between 1.5% and 10% of the loan amount, which usually puts the APR somewhere between 24% and 99% once you’ve repaid the loan. For a six-month line of credit, the fee in the first two months is higher, then drops to 1%. For a 12-month line of credit, the fee in the first six months is higher, then drops to 1%.
- Term Loans
- Maximum: $500,000
- Minimum: $5,000
- Line of Credit
- Maximum: $100,000
- Minimum: N/A
For qualified businesses, OnDeck can lend up to $500,000 for term loans and extend up to $100,000 for lines of credit. This is plenty of funding for many small businesses. However, traditional banks and the Small Business Administration (SBA) can often offer more. The minimum amount you can borrow for an OnDeck term loan is $10,000, which is reasonable.
- $2,000 to $10,000
The maximum line of credit that can be extended from Kabbage to business owners is $150,000. For many small business owners, this is plenty of capital to have on hand. However, many competitors have higher maximum loan amounts. The minimum line of credit offered by Kabbage is $2,000 for a six-month loan and $10,000 for a 12-month loan. This is lower than many competitors, which makes Kabbage a good option for covering day-to-day expenses and short-term working capital needs.
- At least one year in business
- $100,000+ in annual gross revenue
- 500+ personal credit score (term loans)
- 600+ personal credit score (lines of credit)
OnDeck has looser credit qualifications than many competitors. Many borrowers with OnDeck have great credit, though — it’s not just for those with poor credit. OnDeck does require that you’ve been in business for one year, which is longer than some finance startups require but less than the big banks. You need at least $100,000 in annual revenue, which is higher than some competitors. You also must provide a personal guarantee.
- At least 1 year in business
- No set minimum personal credit requirements
- $50,000-plus in annual revenue (or $4,200 over the last 3 months)
- Must have a business bank account
Kabbage doesn’t have set credit requirements. Many competitors are simply unwilling to lend to entrepreneurs with lower credit scores, but Kabbage is. What Kabbage does want to see is proof your business has consistent revenue to service the loan. Also, you don’t have to provide a personal guarantee, so Kabbage can’t come after personal assets. This is something most traditional lenders require.
- Loan Process
- Application > Signature > Review > Decision
OnDeck has streamlined the application process. To begin, you fill out a form detailing the loan you want, your personal information and your company’s information. Once submitted, you wait for a decision, which only takes a few minutes on OnDeck’s automated platform.
- Loan Process
- Business Review
Kabbage has streamlined the business loan application process and is much simpler than most competitors. You can literally submit an application within 10 minutes, which makes the company a great option if you need money immediately. First, you fill out a form detailing your company’s information and then create an account. Next, you securely link your revenue data sources and wait for a decision. If approved, Kabbage will tell you how much the line of credit is. You can start transferring funds to your business right away (the money will get there in zero to 3 business days).
- Term Loan
- Short-term loans: 3- to 12-month loan terms
- Long-term loans: 15- to 36-month loan terms
- Line of credit
- Revolving; fixed weekly payments
OnDeck allows you to borrow for as little as three months to as long as 36 months. This makes OnDeck a source for short-term loans to cover day-to-day expenses, as well as long-term loans to fund expansion. For business loans, OnDeck requires either fixed daily or weekly payments, like it does for lines of credit. Payments are more frequent than most competitors require, which could create cash flow issues.
- Repayment Terms
- 6- or 12-month loan terms
- No early payment fees
Kabbage’s repayment terms are pretty straightforward. You get either a six- or 12-month line of credit with Kabbage and then make monthly payments over that period. Repayment terms for Kabbage loans are shorter than many competitors. Also, while you can save money by repaying your loan early, you don’t save as much as you would with other lenders. This is because the fees for Kabbage loans are higher in the early months of repayment.
OnDeck: User Reviews
Kabbage: User Reviews
How Does OnDeck Work?
Thanks to its streamlined application process, OnDeck has emerged as a popular source of small business loans for owners who need cash immediately. With looser credit requirements, the company also appeals to those with poor personal credit. Also, since repeat customers are rewarded with lower fees, OnDeck has built a loyal customer base.
OnDeck uses its own proprietary technology to evaluate customers and designs its own unique loans. Here are the important questions and answers:
What Does It Take to Qualify?
Your business must be at least one year old. You must have annual revenue of at least $100,000. For lines of credit, your credit score must be at least 600. For small business loans, it’s at least 500.
A personal guarantee is also required. Loans don’t need to be backed by any specific personal collateral, but OnDeck does place a blanket lien on your company’s assets.
How Does the Application Process Work?
First, you answer questions about the financing you want, specifying the desired loan or line of credit amount and purpose of the funds. Next, you provide personal info and create an OnDeck account.
After that, you supply information about your business, including:
- Business tax ID
- Legal entity type
- Date of establishment
- Average gross annual revenue
- Average business bank account balance
After e-signing the form, OnDeck’s automated platform reviews your application. You get a decision within minutes. If approved, a loan specialist will contact you to confirm you’re qualified (have proof of revenue on hand).
What Kind of Funding Can You Get?
The company offers two forms of funding: term loans ($5,000 to $500,000) and lines of credit (up to $100,000).
OnDeck short-term loans range from three to 12 months; long-term loans range from 15 to 36 months. The APR for OnDeck term loans can be as low as 6% and as high as 99%. The APR you get depends on your personal credit and your company’s revenue and financial health, as well as the length and amount of the loan. Payments are made on a fixed daily or weekly basis.
By repaying early, you can save on interest costs, but not on the set origination fee. The origination fee is anywhere from 2.5% to 4% for your first loan,1.25% to 3% for your second and 0% to 3% afterwards.
Line of Credit
The OnDeck line of credit offers you borrowing flexibility, as you simply draw funds as you need them. For this revolving line of credit, you make weekly payments, along with a $20 monthly maintenance fee. Overall, the APR for OnDeck lines of credit range from 13.99% to 39.9%.
What Makes OnDeck Stand Out?
In its first decade of operations, OnDeck issued more than $5 billion in loans in the USA, Canada and Australia. OnDeck’s success proves it’s serving a crucial need.
There are five core reasons why OnDeck has attracted so many entrepreneurs:
- Benefits for repeat customers: OnDeck rewards its good customers with lower origination fees, making borrowing cheaper.
- Speedy funding time: Money can get to you in as few as 24 hours, which is great if you need cash now for something like payroll or inventory.
- Seamless application: Get approved in 5-10 minutes.
- Straightforward terms: OnDeck makes the total interest percentage, origination fee and total loan cost very clear.
- Reasonable requirements: OnDeck has lower personal credit requirements and reasonable business qualifications, which ensures more entrepreneurs can obtain funding.
Common Reviews of OnDeck
OnDeck does quite well on major review sites. Most customers rate the company as above average or excellent overall.
On sites like TrustPilot, Credit Karma and Consumer Affairs, OnDeck gets great reviews for its easy loan process, quick funding, reasonable qualifications and variety of funding options. Many customers love that you get a lower origination fee the second time around. Also, the customer service team at OnDeck gets great feedback, especially for their responsiveness and courteousness.
On those same sites, you will run across some negative reviews. The majority are about high interest rates and fees. Since OnDeck does lend to relatively new companies and those with poor credit, it can be expensive to borrow with them. However, that’s not entirely OnDeck’s fault, especially when you consider that other lenders aren’t as willing to work with such customers.
Is OnDeck Right for You?
For those with excellent credit, OnDeck could be a source of funding, though you should compare rates with other lenders. You’ll probably find a better deal.
For those with average or poor credit, OnDeck is one of the best options for funding both daily expenses and long-term business goals. Loans can go up to 36 months, which gives you nice breathing room to use those funds to grow your business.
If cash flow is slow or fluctuates at your business, OnDeck is a smart choice, as funds get to you quickly. Also, borrowing with OnDeck does get cheaper over time, which can make them a long-term solution for any sort of business need.
To enjoy all the advantages of an OnDeck loan, know what you’re agreeing to first. Make absolutely sure you can repay the loan.
So, run the numbers for OnDeck’s offer and compare it with others. Take the financing that will maximize your dollars and enable you to build your business into a sustainable success.
There are many new players in the lending industry, which can make it difficult for business owners to know where to turn for funding. Founded in 2008, Kabbage has become known for its streamlined application process, helping it carve out a niche as a quick source of money for businesses when cash flow is a problem. Since Kabbage doesn’t have strict credit requirements, it’s also become a go-to lender for business owners with poor personal credit.
With that said, you should take time to learn more about Kabbage and its pros and cons before applying and agreeing to a line of credit loan. Here’s all you need to know:
How Does Kabbage Work?
Kabbage has its own unique process and lending model. Here are the details:
To get a Kabbage small business loan, you must have been in business for at least one year. You also must have at least $50,000 in revenue each year or $4,200 on average over the previous three months. Kabbage checks your revenue by having you link your business accounts and payment platforms with its platform.
Kabbage has no strict credit requirements, but most borrowers are over 500. Those with higher credit scores typically enjoy lower fee rates.
You start by providing your business information and creating an account. Then, you link your business bank account and/or payment platform so Kabbage can analyze your revenue.
After undergoing the automated review, you’ll find out how much capital you can access (if approved). You can then request money be transferred.
Loans and Terms
There are two loan term lengths:
- Six-month line of credit: You can borrow anywhere from $2,000 to $150,000. You pay 1/6 of the principal per month for six months, plus the fee each month.
- 12-month line of credit: You can borrow anywhere from $10,000 to $150,000. You pay 1/12 of the principal per month for 12 months, plus the fee each month.
Note: Kabbage charges a fee (there’s technically no interest rate). The fee ranges from 1.5% to 10%, with the APR typically ranging from 24% to 99%.
Additionally, since the loan is a line of credit, you only repay what you use. For instance, if Kabbage approves you for $100,000 but you only take out $50,000, you’ll repay $50,000 over a six- or 12-month period. This gives you some added flexibility and the chance to maximize use of the funding.
What Makes Kabbage Stand Out?
In its first decade of business, Kabbage provided more than $3 billion in loans to small business owners. Clearly, the company is fulfilling a need for many entrepreneurs across the country.
Specifically, Kabbage does well in the following aspects:
- Ease of application: Applying literally takes only 10 minutes. It’s a great option if time is tight and you need money to run your business now.
- Transparency: Kabbage does a great job of making sure you’re absolutely clear on how much you’re paying in principal and fees each month.
- Quick access to money: Once approved, the money will be in your hands very soon. Sometimes you’ll see the cash on the same day. At most, it will take three business days.
- No strict credit requirements: Obtaining funding is a major problem for entrepreneurs, especially those with poor credit. Kabbage is willing to work with those folks when others aren’t.
Common Reviews of Kabbage
Overall, Kabbage gets mixed reviews from its customers across major sites.
On TrustPilot and Consumer Affairs, Kabbage gets good reviews for its easy application process, fast transfer of funds, and willingness to approve those with bad credit. Others also praise Kabbage for its responsive customer service and making terms and payments clear.
Not all reviews for Kabbage are positive, though. On Credit Karma, folks have complained about Kabbage’s high fees and complicated fee structure. Some complain about customer service not working with them to restructure terms.
Negative reviews aren’t necessarily Kabbage’s fault. Before you agree to a loan, be entirely clear on the repayment terms and how much the line of credit will cost you over time. Make sure you can actually repay the loan first.
Is Kabbage Right for You?
If your credit is excellent, explore options other than Kabbage, as you’ll most likely find better rates and terms. However, if time is tight and you need cash now, Kabbage is an attractive option.
If your credit is average or poor, a Kabbage line of credit can be excellent source of funding. As long as you meet the qualifications (years in business and revenue), you’ll probably get at least some access to cash. And, if you repay the loan on time or early, your credit will improve. So, borrowing from Kabbage is actually a good way to build good credit history.
When it comes down to it, borrowing from Kabbage could benefit your business greatly, as long as you understand the terms and can repay the loan on time. The service is especially useful when you urgently need cash, as it can bridge the gap in times of slow cash flow.
Of course, since the cost of borrowing from Kabbage can get high, you want to actually see if it’s advantageous for your company. Crunch the numbers and compare with other options. Then go with the option that works best.