Get a $250,000 Loan in 24 Hours. But Beware, It's Expensive.
A new loan product announced today gives lenders access to a quarter million dollars in cash in 24 hours. But make no mistake: It is going to cost you.
Small-business lending company OnDeck Capital today unveiled a new loan product called On Deck Term 24 that gives eligible small-business owners up to $250,000 in 24 hours with up to 24 months to repay the balance. OnDeck is a technology-based lender that uses data, like a business owner’s cash flow, to determine whether to disburse a loan.
The loan offering is not for startups. OnDeck expects the loan to be used by business owners looking to expand into another store location, purchase a very large piece of equipment or make some other significant business investment. “Term 24 supports businesses that need larger loans for expansions and upgrades or have bigger working capital needs,” said Noah Breslow, chief executive officer of OnDeck, in a statement.
To apply for the loan, a business must be at least 3 years old with annual revenues topping $1 million and stable business checking account balances.
In exchange for speed and convenience, you pay. The annual percentage rates on the loan range from 19.99 to 39.99 percent. OnDeck automatically deducts a payment from the business owner’s checking account every business day over the life of the loan to recoup the debt.
OnDeck is very transparent about the cost of the loan. It breaks down, clearly, not in that infamous “fine print,” exactly how much a loan from them is going to cost. Its sweet spot, though, is serving business owners that have an opportunity that would require cash up front to be able to profit from and they can’t wait for a bank loan. While bank loans have lower interest rates, they also take a lot longer to secure.
“This is the first term loan in the industry that allows businesses to receive a loan up to 24 months in length within 24 hours, which is faster than bank loans and more flexible than credit cards,” said Breslow.