If you have an existing loan with OnDeck, or a line of credit, and your business goes down, pretty soon all of that debt could cripple you and your business. In most cases, the business owner needs some extra capital to help them through the slow period. Sometimes, people might be tempted to stop their payments to OnDeck because now they don’t have a daily/weekly payment depleting their account. It all depends on your situation, and sometimes this might be a tempting option.
There are alternatives though
Delancey Street is a premier alternative lender, and we offer a number of options that can help you get access to capital, without compromising and hurting your business, or credit score.
Hard money loans: We offer real estate collateralized hard money loans, which unlock the equity in your property. You can get access to instant capital, at an APR of 8-10%, that can help you survive. Instead of stopping your payments to OnDeck, which can result in legal action being taken against you – try getting alternative forms of financing that can help you improve your financial situation.
Refinance your loan: One of the things we offer is a merchant cash advance consolidation. If you’ve taken funding from another lender, such as OnDeck, we can “buy them out,” and increase the term of the loan. By increasing the term of the loan, your daily/weekly payment goes down. This means greater cash in your bank account. This is a win! It makes it so your business doesn’t have the cash flow situation.
Invoice factoring: Another great alternative is invoice factoring. With invoice factoring, you can unlock the value of your future receivables. Invoice factoring allows you to sell your invoices, and get 80-90% of the value of the invoices immediately. Even if you have bad credit, invoice factoring can give you capital.
What happens if you stop payments on OnDeck
If you’re overwhelming, it might be tempting to stop payments on OnDeck. We recommend you reach out to our team so we can give you alternative financing options instead.
If you default on OnDeck, it’s likely they’ll file a UCC lien on your business. The purpose is to protect the lender. OnDeck will try to get you back on track, and get you to make payments. But in the event they are unable to do so, it’s likely you’ll get a threatening letter from OnDeck. In the past, we’ve heard of OnDeck sending letters threatening legal action if the loan debt isn’t resolved. The letter will further mention the borrower is obligated to pay interest, court costs, and attorneys fees.
What should you do?
You should never default on a lender, or stop payments. The legal recourse might be more than you can handle. Typically we recommend reaching out to the lender and explaining your financial hardship. If this doesn’t work, your next course of action should be to speak to an alternative lender like Delancey Street who can
- Provide you with MORE working capital, that can be used to make your OnDeck payments
- Refinance your OnDeck payments
- Factor your invoices to give you greater liquidity
Bottom line, don’t go it alone. We can help you.