OnDeck Versus Kabbage

Note: We receive a commission for purchases made through the links on this site. Our sponsors, however, do not influence our editorial content in any way.

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’s stellar products and services have help build 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 business 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).

Term Loans

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?

Looking at something like Kabbage vs. OnDeck, you can see why OnDeck stands 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 online 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. You can check on Kabbage vs. OnDeck to get an idea of competitors rates.

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.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Versus Reviews. He graduated from Bowling Green State University with a Bachelor's Degree in Journalism. He has a long history of journalism, with a background writing for newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as writing for The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.

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 products and services, including a 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 online 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.

The Application

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%. This can be good to note when you are looking at something like Kabbage vs. OnDeck on how they stack up.

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?

Kabbage’s products and services help it stand out as a top small business lender. 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. Looking at comparisons with other companies, like Kabbage vs. OnDeck, you can see why it is so popular.

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.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Versus Reviews. He graduated from Bowling Green State University with a Bachelor's Degree in Journalism. He has a long history of journalism, with a background writing for newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as writing for The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.