OnDeck Capital versus Lending Club - who will offer you the best small business loan option?
Does your business need a short term loan for working capital or expansion? A few years ago, the only options for small business loans were bank loans based on your personal credit, or merchant cash advances if you used credit cards for sales. But now with online vendors, there are more options.
Those merchant cash advances, where a business gets a lump sum payment in exchange for a share of its daily credit card sales, have very high interest rates. And banks don’t loan on newer businesses, and it’s hard to get past their collateral needs sometimes.
Today, there are several more affordable options for small business loans. Let’s look into a couple in this article, and find out if OnDeck Capital or Lending Club will fit your needs.
They have an A+ Better Business Bureau rating, and have listed as high as #11 on Forbes 100 Most Promising Companies List.
They offer Short Term Loans, of 3-12 month terms, and Long Term Loans, which are 15-36 month terms. So if you have a short term emergency, you can borrow to pay payroll for example, and then pay it back right away, within a few months or a year. For larger needs, like equipment purchases, or expansion, they have the 15-36 month terms. The offer business loans from $5,000 to $500,000, and Lines of Credit from $15,000 to $100,000.
Rates start at 9% for short term and 5.99% for loan term loans. They do have an origination fee, to cover the cost of assessing your application and writing the loan. These are 2.5-4% of the loan amount for your first loan, 1.25-3% of the loan amount for your second loan, and 0-3% of the loan amount for your third or subsequent loans.
What do you need to qualify?
You need to be in business over 1 year, have at least $100,000 in annual sales, and be US based. One of the business owners needs to have a credit score over 500. That should be attainable. They take in to account your cash flow as well as your credit score. There is no prepayment penalty. You can have an answer in minutes, and funding as fast as one day.
There are a few industries they cannot loan to, you can find that list here:https://www.ondstricted-industries/
This lender just started loaning to small businesses a couple years ago, and has expanded the states in which they operate. They now offer business lines of credit, too.
To qualify for a loan with them you need more than $75,000 in annual sales, have been in business over 2 years, no recent bankruptcies, and the applicant needs to be a 20% or more owner of the business with fair or better personal credit. They offer 1 to 5 year terms, fixed monthly payments, no prepayment fee, and interest rates starting at 5.9%.
They also have US-based customer service. They do not require collateral for loans under $100,000, no business plan needed, and no appraisals needed either.
You complete a loan application. They assess risk, determine a credit rating, and assign an appropriate interest rate. Investors , who could be individuals or institutions, select loans they want to invest in. You get the loan, they get the interest.
Decisions are made quickly, you get your quote in minutes. They give loans from $5000 to $300,000. They give personal loans up to $40,000.
So, there are the facts.
It depends on your needs.
Let's look closer at OnDeck Capital versus Lending Club.
OnDeck Capital is better if you need a larger loan, or if your personal credit is a little under par. Also, OnDeck Capital is a better option if you’ve only been in business just over a year. And you only need $75,000 in annual sales, versus $100,000 for Lending Club. Applying for a loan doesn’t hurt your credit, so there’s nothing to lose in applying. They have great revues (9 out of 10 would refer to a friend) and varied loan terms. You can pick the loan term depending on your need.
Lending Club is a better option if you need a longer repayment term, as they offer up to 5 year loans. So, as long as you’ve been in business more than 2 years and have over $100,000 in annual sales, this may be the option for you. They also have good reviews listed on their website.
They both offer quick turnaround, automatic payments, and better interest rates than banks.
So, OnDeck Capital versus Lending Club, it depends on your loan needs.
Check them both out and see which has the best option for a small business loan.