If you own a business and need a checking account or a loan, Bluevine, Kabbage, and OnDeck are all solid choices.
In a Nutshell
Kabbage is best for people that are looking for an all-in-one option for payment processing and business financing.
Bluevine is best for businesses that want flexible lines of credit at competitive interest rates
OnDeck is best for businesses that want loans that are funded very quickly and perks for staying loyal.
If you run a small business, you may find you sometimes need a bit of extra money. Whether you’re looking to expand your company or need some cash to pay the bills while you wait for a customer to pay an invoice, having a way to get money quickly can make or break a small business.
There are many companies that offer different types of small business financing. Some offer loans while others offer lines of credit. There are also unique funding options like invoice factoring available.
Bluevine, Kabbage, and OnDeck are three popular online lenders offering business financing. We'll cover the pros and cons of each below so you can find the right one for your business.
Bluevine offers multiple business services, including checking accounts, payment services, and financing.
Bluevine offers a fee-free checking account that pays interest on balances up to $100,000. If your business keeps a lot of cash in the bank, this can be a good way to put that money to work.
Bluevine has a national network of 38,000 ATMs you can use, fee-free. It also has no minimum balance requirements and allows unlimited transactions.
If you need financing for your business, Bluevine offers two different kinds of financing.
One is a basic business line of credit. You can get a credit line of up to $250,000 based on your company’s financials. Higher revenue businesses with longer histories will qualify for larger lines of credit.
With the line of credit, you only pay for what you use. There are no fees to establish the line of credit or to keep it open. Bluevine can also increase the line of credit as your business grows.
If you’re regularly waiting on your customers to pay invoices, Bluevine also offers invoice factoring. This gives you a line of credit as large as $5 million based on how much and how often you invoice your customers.
When you submit an invoice, Bluevine automatically gives you between 85% and 90% of the invoiced amount. You can use that cash to keep running your business. When your customer pays the invoice, Bluevine will reimburse itself, plus any interest charges, and release the rest of the payment to you.
That means you can get paid for most of your invoices immediately, freeing up capital to use on running and expanding your business.
Finally, Bluevine helps customers pay their suppliers. You can set up one-time or recurring payments to your business partners and submit payment by check, ACH transfer, or wire. You can even use a credit card to make payments so you can earn rewards.
Bluevine keeps fees as low as it can. There are no monthly fees or minimum balance requirements to worry about with the company’s business checking account. You can also use any ATM in the company’s network fee-free.
The company’s financing solutions also don’t involve any fees. You will have to pay interest on the money that you borrow, but the rates are very competitive when compared to other business lenders.
Bluevines payment service is free with your business checking account, but you must pay a fee when you make certain types of transactions. Payments by credit card cost 2.9% of the amount paid and wire transfers incur a flat, $15 fee.
Pros and Cons
Bluevine has pros and cons to consider before signing up.
Competitive rates for financing
Checking account pays interest
Only offers lines of credit, no lump-sum loans
Can be more difficult to qualify for than financing from other lenders
No weekend customer service
Kabbage is an online financial services company that offers business checking accounts, payment services, and financing.
With Kabbage, you can open a business checking account that charges no monthly fee and pays interest. Your company’s extra cash can earn money, meaning you don’t have to worry about having too much money sitting unused.
The checking account also comes with other useful features like customized checks, a national ATM network, and bill payments.
If you need help accepting payments, Kabbage offers an inexpensive payment service. You can use it to accept credit and debit card payments over the internet. The service also makes it easy to start selling gift certificates, which can help give your business a boost.
If your company needs financing, Kabbage offers both secured and unsecured loans you can apply for quickly and easily.
Kabbage’s checking accounts don’t charge a monthly fee, making them a great choice for people who want an inexpensive banking option for their business.
Where Kabbage makes most of its money is through its payments service and lending.
You’ll pay 2.9% + $0.25 for every transaction processed using Kabbage Payment. There are no monthly fees for the service, so if your company is just starting out, you don’t have to worry about high fixed costs.
Kabbage’s small business loans are unique in that they don’t charge interest. Instead, you have to pay a monthly fee in addition to the principal when you make your monthly payments. The fee remains the same throughout the loan. Otherwise, the loans don’t have other common fees like origination or prepayment fees.
Learn More: How to Open a Business Bank Account
Pros and Cons
There are some advantages and drawbacks to working with Kabbage.
Get a checking account, payment processing, and financing all from one place
Fee-free checking account that pays interest
Fast lending process
Loan fees can be high, making Kabbage financing expensive
Flat monthly fee reduces the savings of early loan repayment
Related: Best Banks for Small Business
OnDeck is an online lender that focuses on business loans and lines of credit.
Unlike Kabbage and Bluevine, OnDeck doesn’t offer services like checking accounts or payment processing. Instead, OnDeck focuses solely on providing lending services to small businesses.
OnDeck offers short-term loans ranging from $5,000 to $250,000. You can choose from repayment terms of up to 18 months. The company offers same-day funding for some of its loans and a few benefits for people who have worked with OnDeck before. For example, OnDeck customers can get interest waivers and reduced origination fees for future loans.
If you need regular access to cash instead of a one-time loan, OnDeck also offers lines of credit. With the line of credit, you can borrow up to $100,000 at a time. The repayment term is 12 months, and the term resets after each withdrawal so you don’t have to keep track of multiple different payments and due dates for the line of credit.
One thing to keep in mind about OnDecks loans is they require daily or weekly repayments, which is unusual. Most lenders ask for monthly payments instead.
Related: Best Small Business Loans
OnDeck does charge some fees that customers should be aware of. Customers will have to pay an origination fee, usually about 2% to 3% for their term loans. Lines of credit have a monthly maintenance fee of $20.
One good thing to note is that OnDeck is very transparent about its pricing. With its SMART Box Capital Comparison tool, you can quickly and easily see how much a loan or line of credit will cost, including all the fees and interest. This makes it easy to understand how much it will cost for you to borrow money.
Related: The Best Small Business Credit Cards
Pros and Cons
OnDeck has pros and cons to consider before signing up for a loan or line of credit.
Same-day funding for some loans
Low minimum credit score requirements
Higher fees than the competition
Repayments are frequent (daily or weekly)
Business owners have to personally guarantee the loan
Learn More: Best Bank Account for Startups
Bluevine vs. Kabbage vs. OnDeck - Comparison
|Brand||Best For||Special Features|
|Bluevine||Established businesses that need large loans||High-interest rate on checking account balances up to $100,000|
|Kabbage||Easier qualification (especially with secured loans)||Online payment service that can help you sell gift cards|
|OnDeck||Fast funding||Loyalty perks|
Why Choose Bluevine
Bluevine offers competitive rates on its lines of credit and its checking account. If you’re not looking for loans to assist with large capital expenditures and just want the day-to-day convenience of a line of credit, Bluevine is a great company to work with, assuming you have strong credit.
Why Choose Kabbage
Kabbage is a good choice for businesses that want to work with a single company for multiple services. It can get confusing to work with one company for payments, another for your banking, and a third for borrowing money. With Kabbage, you can do it all in one place.
If you don’t mind paying a bit for the convenience, working with Kabbage can be worth it.
Why Choose OnDeck
OnDeck can work if you have an immediate need for cash and you can’t wait a few days or weeks for a lender to look over your application. OnDeck can be expensive to work with, but if you need cash quickly, you’ll want to choose OnDeck.
These are some of the frequently asked questions about small business financing.
Do I need good credit to get a small business loan?
Some lenders will look solely at your business’s credit when making a decision about offering a loan. However, most companies will want to make sure the business owner has good credit, especially if you’re a small business. These lenders may also want business owners to provide a personal guarantee that they’ll repay the loan if their small business goes under.
How important is a business checking account?
Every business, including small businesses, should have a business checking account. They’re a great way to keep the business’s finances separate from the owners, which makes record keeping much easier. It can also be important if you’re relying on the liability protections offered by forming a business, as mixing personal and business funds can result in losing those protections.
What affects business loan interest rates?
Like any loan, business loans charge interest. The interest rate you pay will vary with a few factors. One is your business’s credit score. Small businesses get their own credit reports and can build credit, so companies with good credit can secure lower interest rates. Much of the time, your personal credit score will also play a role. Another is your business’s financial situation. If you have a long history of success and produce steady cash flow, you’ll probably be able to secure a lower interest rate. Finally, things like the amount you borrow and the amount of time you have to repay the loan play a role. Larger loans and longer terms usually result in higher interest rates.
If you own a business and need a checking account or a loan, Bluevine, Kabbage, and OnDeck are all solid choices. Each has pros and cons, so make sure to consider those, as well as look into other competitors, to find the best loan for your business needs.