OnDeck and Funding Circle offer short-term working capital loans up to $500,000, but each is best for different businesses. OnDeck is best for businesses needing quick funding because they can fund in as little as one day. Funding Circle has a longer-term solution for prime borrowers, offering interest rates as low as 4.99%.
When to Use OnDeck
OnDeck is the better option for businesses needing quick short-term funding. Business owners can borrow up to $500,000 several days quicker than Funding Circle. The starting APR for OnDeck business loans is also lower and the repayment terms extend up to three years. Businesses can also qualify for a line of credit with OnDeck.
When to Use Funding Circle
Funding Circle is the right choice for businesses needing longer repayment terms and less frequent payments than OnDeck offers. Prime borrowers can qualify if the business has two years of operations history. Funding takes at least five days, a little longer than OnDeck, but the application can be completed in a few minutes.
When to Use an Alternative Option
BlueVine is one of the best alternatives to OnDeck and Funding Circle for business owners who want fast financing. BlueVine offers funding up to $250,000 on its term loan and line of credit. It also offers invoice financing up to $5 million. The application takes 10 minutes and funding is available as soon as the next business day.
OnDeck vs Funding Circle at a Glance
OnDeck | Funding Circle | |
|---|---|---|
Best For | Prime borrowers needing quick funding | Businesses wanting the longest repayment terms |
Loan Amount | $5,000 to $500,000 | $25,000 to $500,000 |
Terms | Three to 36 months | Six months to five years |
Repayment Schedule | Weekly | Monthly |
Expected APR | 10% to 100% | 11.97% to 29.98% |
Funding Time | One to three days | Five to 10 days |
Credit Score | At least 600 | At least 620 |
Annual Revenue Requirement | At least $100,000 | None stated |
Additional Products Offered | Business line of credit | None |
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How We Determined When to Use OnDeck vs Funding Circle
OnDeck has a quick funding time of one to three days, a credit score requirement of 600, and a starting APR of 10%, making it great for quick funding. Funding Circle has lower maximum rates of 29.98% and offers monthly payments for up to five years, which is better for more established businesses.
Comparing OnDeck vs Funding Circle is the first major step in selecting the best lender for business financing. Both lenders offer the maximum, but OnDeck will consider a smaller dollar size. The overall cost, speed of funding, and repayment terms are different for both lenders. Business owners should also ensure they can meet the minimum qualifications, which will help them avoid being denied funding.
The criteria we evaluated when comparing OnDeck vs Funding Circle include:
- Loan terms: The loan size, repayment term, and repayment schedule a business can receive with the lender.
- Speed of funding: The speed with which businesses can get a loan, which includes the application process, approval decision, and transfer of funds to the account.
- Overall cost: This includes the fees, interest rate, and APR that the lender offers businesses. Lenders reserve the lowest rates for the most qualified borrowers.
- Minimum qualification requirements: The requirements include a minimum time in business, personal credit score, and annual revenue.
- Collateral requirements: Most online lenders do not require hard collateral. Instead, lenders usually require a personal guarantee and blanket UCC filing.
- Application process: The application process is often a deciding factor for businesses needing quicker funding and business owners wanting a loan without extra hassle.
- Customer service: Many online lenders have hotlines for general questions and offer business loan specialists that borrowers can contact with questions about their financing.
- Business owner reviews: This may not be the primary consideration, but reviews by other businesses can often inform and help borrowers choose among lenders.
- Average borrower statistics: Business owners can take their comparison a step further than some comparisons like OnDeck versus Kabbage. This is because both lenders offer statistics about the average borrowers, giving business owners a clearer snapshot of the types of qualifications they accept on average.
After taking those things into consideration, we believe that both are both good, short-term loan options. Both lenders offer small businesses sufficient repayment terms and funding for large projects and small cash flow gaps. We recommend using OnDeck for quick funding needs and Funding Circle for prime borrowers needing a longer-term option.
OnDeck vs Funding Circle: Terms
The terms of a loan include the maximum loan amount, repayment terms, repayment schedule, and funding speed. OnDeck and Funding Circle offer the same maximum loan amounts, but OnDeck may be better for low revenue businesses because it offers as little as $5,000 in funding. Funding Circle can also be a great choice for monthly repayment terms compared to the weekly option from OnDeck.
OnDeck Loan Terms
Small businesses comparing OnDeck vs Funding Circle should consider the minimum loan amounts offered by the lender. While a business may meet all the qualifications, it may be too small to get funded if the minimum loan amount is too high. In addition, OnDeck also offers a faster business loan funding process, requires more frequent payments, and offers shorter maximum terms.
Funding Circle Loan Terms
Funding Circle offers the same maximum loan amount as OnDeck. However, businesses needing the longest repayment term can take advantage of the maximum five-year schedule. Some businesses may also benefit from the monthly payment schedule if their cash flow is inconsistent from week to week. One drawback is that they take longer to provide funding than OnDeck, with at least five days before a business receives funds.
OnDeck vs Funding Circle: Rates & Costs
In this comparison, Funding Circle charges higher fees but has a lower APR range than OnDeck. This makes Funding Circle a more affordable solution for loans with equal repayment terms. However, businesses that repay the loan over the full five years that they offer may have a higher cost of capital than with a shorter-term loan from OnDeck Capital.
OnDeck Costs
OnDeck offers borrowers the lowest possible APR when comparing OnDeck vs Funding Circle. This makes it an affordable option for prime borrowers. However, it has a larger APR range, so the average borrower may have a higher overall interest rate. For every $10,000 a business borrows with OnDeck, the resulting daily interest cost of the loan is between $2.75 and $27.40.
Funding Circle Costs
Funding Circle offers borrowers a higher minimum APR, but a lower overall APR range. This means that for borrowers that qualify, the average cost of the loan in interest will be lower than it will be with OnDeck. The daily interest cost for every $10,000 a business borrows is between $3.30 and $8.20.
OnDeck vs. Funding Circle: Qualification Requirements
Businesses examining OnDeck vs Funding Circle as options for funding will notice that there are some important differences in qualification requirements. OnDeck has lower overall qualifications, permitting businesses with lower credit and shorter operational history to qualify. Funding Circle requires at least two years in business and does not disclose an annual revenue requirement for its loans.
OnDeck Qualification Requirements
Business owners who worry about qualifications should apply with OnDeck. Its lower minimum credit score and time in business requirement mean that more businesses can qualify. It also has a stated minimum annual revenue requirement and offers smaller minimum loans, allowing more businesses to qualify for at least some funding.
Funding Circle Qualification Requirements
These qualifications make them better for more established businesses with excellent credit histories. Its minimum of two years of operations puts it out of reach for many new businesses, and the minimum personal credit score can be a difficult qualification to meet.
OnDeck vs Funding Circle: How to Apply
Online lenders have similar business loan application processes that are much easier to navigate than traditional lenders like banks. Instead of working through a pile of paperwork and applying at a physical location, business owners can apply online by providing basic personal and business information. Overall, OnDeck has a simpler application process, saving business owners valuable time when applying
OnDeck Application Process
The OnDeck application process includes:
- Basic personal information: Name, address, Social Security number, and personal income
- Funding request: Loan amount and planned use of funds
- Business financial information: Estimated annual revenue and recent bank statements
If borrowers can’t provide recent bank statements, then they must connect OnDeck online to their business bank account during the application process. Once an applicant has filled out all the information, OnDeck will generate an approval decision and follow up with funding as soon as the next day.
Funding Circle Application Process
The Funding Circle application process includes:
- Basic personal information: Name, address, and Social Security number
- Funding request: Loan amount and planned use of funds
- Personal financial information: Personal tax returns
- Business financial information: Business tax returns, profit and loss statements, balance sheet, and bank statements
Their application is like an OnDeck application but requires more detailed information. The process is longer because it’s a peer-to-peer loan that gets funded by individual investors. This means that the total funding time takes at least five days while Funding Circle and individual investors review the loan request.
OnDeck vs Funding Circle: Customer Service
It’s important to ensure the chosen lender not only has a good reputation but also offers plenty of easy ways to connect with its customer service teams after funding. If there is ever a problem during the application process, or if a business is in danger of missing a payment after receiving funds, then having experts available to discuss the issue can make a big difference.
OnDeck Customer Service
OnDeck offers an active customer service team that many consider one of the best in short-term lending. Business owners can reach it via phone, email, or live chat online via a computer, tablet, or smartphone. OnDeck also offers a mobile app that makes it easy to reach out to any department in the company.
Funding Circle Customer Service
Funding Circle believes in a fluid customer service experience that allows business owners to address a member of its team at any step of the loan process. It offers the opportunity to contact customer service via phone or email, and it offers a mobile app for users to manage their loan or ask questions.
OnDeck vs Funding Circle: Reviews
Reviews of OnDeck vs Funding Circle indicate the experience businesses are likely to have with the lender. Businesses with negative experiences are far more likely to leave reviews than those that had a positive experience with the lender. Based on the reviews, both lenders are great short- and long-term financing partners.
OnDeck Reviews
OnDeck reviews are positive on our site and around the web. Many positive reviews came from business owners who would work with the lender again based on its quick funding speeds and responsive customer service team. Occasional negative reviews came from business owners unable to secure sufficient funding.
Funding Circle Reviews
Funding Circle reviews were also positive on our site and around the web. The positive reviews came from businesses happy with the loan terms they received and the low overall interest rates. Some negative reviews noted that the application process and funding speeds were slower than expected, but were happy to get funding.
OnDeck vs Funding Circle: Typical Borrower Statistics
The minimum requirements of OnDeck vs Funding Circle business loans tell one side of the story. Both lenders disclose the qualifications that businesses must meet. It’s important to note that while OnDeck provides typical borrower qualifications, Funding Circle goes one step further and provides an average.
OnDeck Typical Borrower Statistics
The typical borrower statistics reported by OnDeck include:
- Time in business: Four to six years
- Personal credit score: 680 to 720
- Annual revenue: $500,000 to $1 million
The typical business that qualifies for funding with OnDeck has been operational for four to six years and has a personal credit score of at least 680. This is higher than the stated minimum requirement. However, the major deviation is in the annual revenue, where borrowers have five to 10 times the minimum annual revenue required to qualify.
Funding Circle Average Borrower Statistics
The average qualifying business statistics reported by Funding Circle include:
- Time in business: 11 years
- Personal credit score: Undisclosed
- Annual revenue: $1.44 million
Funding Circle discloses the average borrower statistics but omits the average personal credit score. However, these averages are higher than both the minimum requirements and the typical borrowers from OnDeck. This is because of the peer-to-peer nature of its loans and the lower risk tolerance of investors.
Alternative Loan Options to OnDeck & Funding Circle
While OnDeck and Funding Circle both offer good short-term fast business loans, they may not be the best option for a business. Some business owners may prefer to get a business line of credit, a small business credit card, or a long-term loan that can provide more affordable rates.
Common OnDeck & Funding Circle Alternatives
Alternative | How It Works |
|---|---|
Business line of credit up to $250,000 for recurring business expenses | |
Business line of credit up to $250,000 with a monthly repayment schedule | |
Low minimum requirement line of credit up to $100,000 | |
Financing based on Square POS revenue for business owners | |
Financing based on PayPal receipts for ecommerce businesses | |
Term loan and line of credit up to $250,000 for veteran-owned businesses | |
Long-term SBA 7(a) loans that can fund in as little as 30 days | |
Revolving credit line with rewards and no minimum time in business |
Bottom Line
OnDeck and Funding Circle can help businesses with their short-term financing needs. Each has strengths, and the right one for a business depends on the financing need. Businesses needing quick funding or shorter repayment terms should consider OnDeck. Those businesses wanting the longest repayment terms and smaller potential APR range should apply with Funding Circle.
Overall, we recommend OnDeck for most businesses looking for short-term financing. Its qualification requirements will fit the mold of more businesses and it can fund more quickly than Funding Circle. Business owners can apply by filling out a simple online application that takes about 10 minutes and can receive funding in one business day.
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