OnDeck’s customers will benefit from increased term loan ranges, line of credit sizes and lower rates.
OnDeck has announced a considerable expansion of its range of products to meet more effectively the vast and varied financing needs of small businesses. Through its enhanced products, the platform will be able to fund small businesses more efficiently and to ex-pand its customer base, targeting also larger and more mature companies.
Small businesses have different financing needs during each stage of their lifecycle. OnDeck’s new credit solutions seem to be ideated to better fit that range of require-ments. The innovations enhance different aspects of OnDeck’s existing offer, including the term loan range, the line of credit range and the cost of borrowing.
Short-term loans now range from 3 to 12 months with the possibility to borrow up to $250,000, whereas long-term loans go from 15 to 36 months with wider capacities up to $500.000.
Lines of credit range up to $100.000, with a $20 monthly maintenance fee. Annual inter-est rates start from 5.99%, but lowest rates are limited only to the healthiest businesses with the strongest cash flows, and typically firms that have shown an excellent payment history on prior loan products with OnDeck. The average annual interest rate is around 30%.
"This natural expansion lets businesses seek longer terms and larger loans from OnDeck, and provides our existing and prospective customers with more options to finance their growth”
Beyond this latest product expansion, OnDeck’s customers will also benefit from another new service called OnDeck Advantage. The program includes a plenty of benefits, such as discounts for loyal customers, access to business credit reporting and credit education tools and special access to SCORE, the nation's largest network of free expert business mentors.
"Small business owners need a lender they can trust and grow with, so they can focus on what's most important to them – their own customers. We're delighted to lead the market in helping such an important community thrive.”
The enhanced product suite seems to have been welcomed by OnDeck’s customers. Deborah Perzak, DVM, owner of Woodruff Road Animal Hospital in Simpsonville, South Carolina and recent OnDeck customer, weighed in:
"I received $250,000 from OnDeck to help with the associated construction expenses of my new veterinary practice. The two-year term and weekly repayment drafts have allowed me to better control cash flow and ease stress. I greatly appreciate all that OnDeck has offered and the fact that the entire process was handled professionally and went very smoothly."
Beyond the enthusiasm of Breslow and Ms Perzak, it is worth noting that other platforms are currently expanding or revolutionizing their own offerings. Last week saw Lending Club release a new low cost line of credit for businesses with a straightforward functionality and affordable rates, with annual fixed interest rates ranging from 5.9% to 25.9% and annual variable interest rates starting at 6% up to the limit of 21.6%. Other examples are Kabbage that charges 20% to 113% and Dealstruck 11% to 22%, plus the prime rate of 3.25% on its inventory line of credit.
Bottom line? OnDeck is competing in an increasingly competitive space, and product innovation may be seen as a necessary means of shoring up the platform’s market position.