OnDeck loans are secured by a general lien on business assets, but are not dependent upon the value of specific assets—unlike traditional bank loans.


Many small business owners looking for unsecured business loans or lines of credit typically don’t have the collateral that a bank may require, such as real estate, inventory, or other hard assets. This can make it difficult to qualify for a business loan with a traditional lender like a bank.

Banks generally underwrite loans based upon the value of specific assets and attach liens to those specific assets to secure a small business loan. In this way, the bank can reduce its lending risk. This process can be difficult for business owners whose assets are not valued highly by the bank or are difficult to value or sell.

Why are OnDeck Loans Different?

OnDeck loan approvals are based upon healthy business fundamentals like cash flow, not based solely upon the value of any particular business asset. A proprietary way of determining who it lends to (the OnDeck Score®) focuses on the overall health of the business. Whether or not a business has specific assets to use as collateral doesn’t factor into an analysis of business health.

When a business accepts a loan from OnDeck, a general lien is placed on business assets until the loan has been paid in full. A personal guarantee is also required from the business owner, but there is no lien placed on his or her personal assets. In this way, business owners can qualify for loans from $5,000 to $500,000. In most cases, they’ll get an answer on their loan application with the same day (sometimes with the hour) without the need to collateralize a particular piece of real estate, inventory, or other had asset, making it possible for many healthy businesses that don’t have collateral to qualify for a small business loan.

With that in mind, if you have a healthy business, but aren’t sure about the value of specific collateral, consider applying for an OnDeck loan.

Compare Loan Requirements:

  • Bank Loans: Underwritten using specific collateral. A lien on the asset(s) + a personal guarantee
  • Equipment Financing: Equipment as collateral + a personal guarantee
  • OnDeck Loan: Doesn’t require specific assets for collateral. A general lien on business assets + a personal guarantee

Click HERE to learn more about secured and unsecured loans.

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