Editor’s note: NerdWallet’s Step by Step series gives small-business owners a behind-the-scenes look at the loan application process for various online lenders. We show you what you can expect screen by screen as you submit your application.
TABLE OF CONTENTS
OnDeck loan application summary
OnDeck is an online lender offering small-business loans up to $500,000 and a business line of credit up to $100,000. The company provides financing much faster than traditional banks and with looser qualifications; you may be able to qualify even with bad credit and a limited business history.
The company’s term loans are a good fit for businesses that need money fast for an expansion or for short-term expenses; the business line of credit is better for businesses in need of working capital, to manage cash flow, or to handle unexpected expenses.
On the downside, the loans are more expensive than traditional bank loans. But if you don’t qualify for bank loans or can’t afford to wait several months for financing, OnDeck is a good option. Just be certain your profits will outweigh the costs of the loan or line of credit. For more on its loans, read our OnDeck review.
OnDeck loan application: Summary
Documents needed: Typically none. OnDeck may require documents (such as credit card and bank statements) once you’ve been approved for financing.
Phone calls from lender: Two
| OnDeck funding options at a glance | ||
|---|---|---|
| Type of loan | Term loan | Line of credit |
| Cost of funding | 9% to 98% APR | 14% to 36% APR |
| Loan amount | $5,000 to $500,000 | up to $100,000 |
| Loan term | Repaid daily or weekly over 3 to 36 months | Repaid weekly over 6 months |
| Minimum qualifications | 12 months in business, 500+ credit score, $100,000+ annual revenue, no bankruptcies in past 2 years | 12 months in business, 600+ credit score, $200,000+ annual revenue, no bankruptcies in past 2 years |
| Typical funded borrower | Most borrowers have personal credit score over 600, median of 7 years in business and $600,000 in annual revenue | |
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OnDeck loan application: Step by step
1. THE BASICS
Documents needed? No
To get started with OnDeck, select your desired borrowing amount ($5,000 to $500,000), how soon you need the money and how you plan on using it. This information gives the lender a better sense of your particular financing need. The lender may recommend a line of credit over a term loan based on this information, but it doesn’t change the timing or pricing of the loan, OnDeck spokeswoman Miranda Eifler says.
If your financing needs are not immediate, Eifler says, OnDeck may recommend you apply closer to your funding deadline because its approvals last for only 30 days.
If you have a referral or coupon code, you can enter it at this point. It’s provided in the company’s direct mail, advertising or from a partner referral. This helps the company identify a loan candidate who may already be in its database and to see which partner brought in the referral.
Finally, you’ll need to provide your first and last name, your phone number and email address, and you’ll need to create an OnDeck password.
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2. BUSINESS INFORMATION
Documents needed? No
Next, you’ll be asked to enter some business information. You’ll submit a legal business name, business phone number, street address, ZIP code, years in business and your legal entity (choose among sole proprietor, LLC, corporation, general partnership, limited partnership or limited liability partnership).
You’ll also need to provide your business tax ID (which can be found on your tax return), your estimated gross annual revenue (which is annual revenue from all sources of operations) and your average bank balance at the end of a typical business day (which determines whether you’ll be able to afford the daily repayments of an OnDeck term loan). This step could take time, depending on whether you have your tax returns and bank account information on hand.
You can call OnDeck at any point during the application process at (888) 828-5717, or you can email or chat live on the website with a loan specialist if you have questions. The contact information can be found at the right side and at the bottom of the screen.
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3. PERSONAL INFORMATION
Documents needed? No
Now you’ll need to enter basic personal information: your first and last name, your home address, ZIP code, date of birth, home phone number and Social Security number.
Next, it’s time to read and sign off on two agreements: OnDeck’s application agreement and an electronic-signature agreement.
The application agreement covers your interaction with OnDeck: It allows the company to contact you, obtain a credit report and other third-party information, and informs you of the company’s privacy policy. The electronic-signature agreement is needed to ensure that your e-signature is legal, Eifler says, and authorizes electronic communication.
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4. LOAN DECISION
Documents needed? Maybe. This depends on the size of the loan and whether OnDeck needs to verify information.
OnDeck will pull together all of the information it has access to, based on what you submitted in the previous steps. The information allows OnDeck to make a lending decision on the spot or determine that it needs additional information (such as bank statements) before deciding.
OnDeck also does a soft pull on your credit report, which means it does not affect your credit score.
OnDeck’s loan specialist will learn more about your business and its needs but may also ask for additional information such as credit card and bank statements to verify information submitted online. The company also may offer you a larger loan, Eifler says.
Rebecca Lonergan of Modwalls, a tile company based in Aptos, California, said OnDeck offered her a $150,000 term loan in 2014 after she had applied for $85,000. The funding process took a little bit longer, as OnDeck requested bank statements, profit and loss statements, and copies of her and her business partner’s driver’s licenses.
“It was really just verifying business information and confirming that we had the sales run rate to pay the loan,” Lonergan says. “Pretty standard but done very quickly and professionally.”
Funding can be as fast as one business day, depending on your requested transfer method (automatic bank withdrawals or wire transfer, which takes longer). In Lonergan’s case, it took about two weeks to get funded, but she says it probably would have taken about a week had she gone for the smaller loan.
“This is to make sure there were no funding issues and to answer any questions they have about their account,” Eifler says. “Borrowers may also be contacted when they become eligible for additional financing.”
To apply
If you’re ready to get started with OnDeck, apply on the lender’s secure site:
Find and compare small-business loans
If OnDeck is not right for you, NerdWallet has created a small-business loan comparison tool to meet your needs and goals. We gauged lender trustworthiness, market scope and user experience, among other factors, and arranged the loans by categories that include your revenue and how long you’ve been in business.
Compare business loansSteve Nicastro is a staff writer at NerdWallet, a personal finance website. Email: Steven.N@nerdwallet.com. Twitter: @StevenNicastro.
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