Fundation is an online direct lender that offers term loans and lines of credit. It partners with banks, financial institutions, and nontraditional lenders to provide the best funding options to small businesses. It can lend up to $500,000 and is a great fit for established companies with fair to excellent credit scores.
Fundation Pros and Cons
No prepayment penalty
Not ideal for new businesses
Stricter borrower qualifications
Who Fundation Is Best For
- Those who are looking for competitive rates and flexible terms: Fundation offers one of the lowest annual percentage rates (APRs) in the market, which are close to the rates provided by banks and traditional lenders. It also provides long repayment terms of up to four years for its term loans.
- Established businesses with fair to excellent credit scores: Unfortunately, not all can take advantage of its low rates and other benefits since its qualifications are rather stricter compared to other lenders.
- Companies with at least three employees: The lender requires that your business has at least three employees, including yourself.
Fundation Costs and Terms
Lines of Credit
$20,000 to $150,000
$20,000 to $500,000
Up to 18 months
One to four years
Twice a month
7.99% to 29.99%
One to three days
Fundation’s costs and rates (7.99% to 24.99% APR) are said to be one of the most competitive in the market, with other lenders providing APRs that go as high as 70%. It provides transparent fees upon application, does not charge any prepayment penalties, and can fund loans as quickly as the same day.
On the flip side, it has tight qualifications and requires a personal guarantee. It also has a high minimum loan amount of $20,000, which may be a drawback for those with smaller funding needs. Moreover, Fundation deducts a 2% fee each time you make a draw from your credit line and charges $500 should you decide to close your line.
Do You Qualify for Fundation Financing?
Minimum Credit Score
Time in Business
Gross Annual Revenue
Numbers of Employees
At least three
Fundation has stricter qualifications compared to similar providers, requiring its borrowers at least two years of business tenure with at least one year for lines of credit, a FICO score of 600 and up, a minimum annual revenue of $100,000, and at least three employees. Additionally, borrowers must not have any bankruptcies or foreclosures in the past three years and any late payments in the past year.
Fundation Application Process
Fundation’s application process is unique in the sense that it lets you apply first from its partner banks and credit unions, who might be able to provide you with the lowest rates. As usual, you will be asked to input basic personal and business information, loan details, documents, and other requirements.
In the event that you don’t qualify with any of its partner banks or credit unions, then your application will be immediately forwarded to Fundation and assessed for one of its loan programs, without you having to submit a second application. During this time, a loan specialist will get in touch to discuss your loan needs, require possible additional documentation, and explain lending and repayment processes.
After speaking with the specialist and complying with the lender’s requirements, your application will be sent through underwriting, and you will be presented with a final loan offer. Once you accept and sign the loan agreement, the money will be sent to your bank account within one to three days.
Fundation Alternatives 2020
up to $250,000 for line of credit
What Business Owners Should Know About Fundation
- It does not report to personal credit bureaus: This means that on-time loan payments do not give your credit score a boost. On the brighter side, early repayments help you save money on interests, considering that the lender does not charge any prepayment penalty.
- You have the opportunity to refinance after nine months: Depending on the terms of your loan and provided that you have been paying on time, you may be eligible to borrow more after nine months.
Most Helpful Fundation Reviews
As of the date that this article was written (March 5, 2020), there aren’t any up-to-date Fundation reviews available online. If you are a past or current Fundation client, then leave a review to help others who are deciding whether or not to use the service.
Fundation Frequently Asked Questions (FAQs)
How does Fundation determine my loan’s interest rates?
Fundation determines your loan’s interest rates by evaluating your business stability, credit history, financial metrics, cash flow, and debt. Financial metrics specifically look at your revenue, growth, and profitability.
Does Fundation require collateral for its loans?
It does not require any collateral. However, it does ask for a personal guarantee from the borrower as well as a Uniform Commercial Code-1 (UCC-1) on business assets.
Which states does Fundation lend to?
It lends to all states except Nevada.
Fundation offers rates (7.99% to 29.99%) and terms (up to four years) that are as competitive as those offered by banks and credit unions. It does not charge prepayment penalties, which can help you save money on interests, and funds loans in one to three days.
The catch here, though, is that it has stringent qualifications, catering only to established businesses with a fair to excellent credit score, at least two years of business operation, $100,000 annual revenue, and a minimum of three employees.
If you meet all of the above, then that’s great news! Otherwise, you might want to consider alternative lenders and read this article on Fast Business Loans: 6 Best Quick Business Lenders for a review of our top choices. In this guide, we compared the top providers according to terms, costs, and qualifications.