declined by ondeck capital heres what to do
Reasons for Decline
OnDeck provides only two funding programs for businesses. These are business lines of credit and business term loans. Borrowers require paying fixed or minimum payments each month until they clear the debt. Companies can get a line of credit of up to $100,000 and a term loan of up to $500,000. The lenders will also be offering equipment financing soon. To verify if an applicant can manage to pay the debt of the requested product, the lender checks the monthly cash flow and revenues.
In addition to these requirements, borrowers need to make at least 8,500 each month in revenue. It is easy to make $100,000 every year but hard to earn $8,500 per month for a whole year. Small businesses face cash flow challenges due to changes in demand, delays in payments from partners, and extreme seasonality. These businesses cannot do anything to avoid the natural conditions of their industries. However, if there is any indication that the business cash flow is not smooth, the lender could reject the application.
Upon being rejected, a small business can always find another lender. You can look for lenders that offer over two programs unlike the ones offered by OnDeck. With the proper small business loan to solve the cash flow problem, you could achieve the same objectives you would have achieved with a business line of credit or term loan. You could also find a loan that accommodates the fluctuation of sales in your business, enabling you to make payments without straining your cash flow during off-peak seasons.
A lender like DelanceyStreet offers a broad spectrum of business loan programs with flexible repayment systems. These loan programs include merchant cash advances, business cash advance, SBA loans, short-term working capital loans, and accounts receivable factoring. A majority of these programs can be accessed by applicants who have a low credit score. Similar to OnDeck,DelanceyStreet offers loans within 1-2 days with minimal paperwork. However, unlike OnDeck, the lender will not dismiss businesses that have fluctuating revenue.
In case your business faces cash flow problems, you can go for business financing programs that lack minimum or fixed monthly payments. With a revenue-based business loan or merchant cash advance, significant payments are only deducted when sales are high. Slow months face smaller payments and fail to increase the interest or amount payable. These make both financing programs ideal for seasonal businesses that find it problematic to cover normal costs after demand reduces for some months.
Hence, if OnDeck has declined you, there is no reason to believe that you cannot qualify for funding with other lenders. As long as your business is operational, a few months of a drop in revenue should not deny you the chance to get financing. There are many options for you to pick from, and the lender will gladly aid you in choosing the suitable one for you.