Fundation Review
- Date Established
- 2011
- Location
- Reston, VA
Pros
- Competitive terms and fees
- Few additional fees
- Typical time to funding: 2 – 7 days
- No prepayment penalty
- Excellent customer support
Cons
- Stringent borrower qualifications
- Somewhat lengthy application process
- Unsuited for startups
Overview
Fundation is a business lender that offers installment loans and lines of credit to qualified borrowers.
The company was founded in 2011 and has quickly become one of the top funders in the alternative lending space, for good reason: the terms and fees are just about the best you can get outside of a bank or credit union, and the time from application to funding beats out banks by weeks (if not months). On top of that, Fundation’s advertising is transparent, their customer service is fantastic, and there are virtually no negative reviews of the company to be found on the web.
In other words, if you don’t qualify for a bank loan or don’t want to spend the time applying for one, Fundation may be the next best thing.
That said, some small businesses won’t meet the lender’s qualifications: you have to have been in business at least one year, have at least three full-time employees, make a minimum of $100K per year, and have a credit score of 600 or above.
Not to worry: if you don’t meet those qualifications, there are other reputable lenders that might work. However, if you’re close to meeting the qualifications, you may still want to apply; the customer service will tell you what you need to do to meet qualifications and help you consider other financing options.
Read on for the full review, or check out our other favorite lenders.
Table of Contents
Services Offered
Fundation offers these financial products:
- Installment loans
- Lines of credit
Borrower Qualifications
These are the minimum qualifications required to be eligible for an installment loan or line of credit from Fundation:
| Time in business: | 12 months |
| Credit score: | 660 |
| Revenue: | $100K/year |
Additionally, your business must have at least three full-time employees (yourself included).
Terms & Fees
Fundation offers installment loans and lines of credit.
Fundation Installment Loan
These are the terms and fees stated on Fundation’s website:
| Borrowing amount: | $20K – $500K |
| Term length: | 1 – 4 years |
| Origination fee: | Up to 5% |
| APR: | 7.99% – 29.99% |
| Collateral: | Personal guarantee, UCC-1 blanket lien |
Fundation’s loans are traditional fixed-rate installment loans. In other words, the loan has a set term length, and your assigned interest rate will not change over the life of the loan. These loans are repaid via ACH withdrawals on a bi-weekly basis.
Fundation Line of Credit
| Borrowing amount: | $20K – $100K |
| Term length: | 18 months |
| Additional fees: | $500 closing fee 2% draw fee |
| APR: | 7.99% – 29.99% |
| Collateral: | Personal guarantee, UCC-1 blanket lien |
Fundation’s credit facilities max out at $100K, but the amount you will have access to will vary based on strength of your business. Each draw is subject to a 2% draw fee, and has a repayment period of 18 months. Unlike the installment loans, draws from your line of credit are repaid on a monthly basis.
Application Process
To apply for a loan from Fundation, you start by filling out the application on their website or via one of their partners.
The application will ask for information about you, your business, and your potential loan. Most of the information is fairly basic: what kind of business you own, annual revenue, number of employees, etc. To gauge the strength of your business, at some point they’ll want your business tax ID, three months of bank statements, and two years of business tax returns. However, if you give permission, Fundation can retrieve that information on their own.
What I really like is that throughout the application process, Fundation will interpret what all your information means. Own a coffee shop? Fundation will tell you the historical delinquency rate of coffee shop borrowers. Only been in business for 2 years? Have 8 full-time employees? Fundation will tell you if those characteristics are good or bad.
At the end of the online application, you might be presented with an estimated quote, depending on how much information the system could gather based on your application.
Regardless, before getting a real loan offer, everybody has to talk to a Fundation “customer relationship manager.” Sometime in the 24 hours following the completion of your application, a rep will get a hold of you to discuss your business, your application, and to make sure that you understand the lending and repayment process.
After you’ve talked to a rep and provided all necessary documents, your application will be sent through underwriting and you will be presented with a final loan offer. When you accept and sign the loan agreement, the money will be sent to your bank account.
The time from application to funding generally takes between 2 and 7 days.
Sales & Advertising Transparency
Fundation’s website discloses just about everything you’d want to know before applying for a loan: minimum qualifications, term lengths, APR range, collateral, repayment, and fees. Potential borrowers shouldn’t encounter any surprises during the application and funding process.
Customer Service & Technical Support
Customer service is available by phone and email. On application, you are given a dedicated account representative, who will be your contact throughout your Fundation experience.
Merchants are generally happy with Fundation’s customer service. They claim that the reps are actually interested in educating merchants on the loan and the process and appear invested in getting you the capital that you need.
Negative Reviews & Complaints
Complaints about Fundation are sparse.
The service is accredited by the Better Business Bureau, but does not currently have any complaints. The company’s presence on other review sites, such as TrustPilot, is similarly sparse.
Nonetheless, here are some complaints that customers might have about the service:
- High interest rates: Fundation’s APRs can go as high as 29.99%, which might be higher than some people want to pay. However, this lender’s rates are comparable to its competitors, and tend to be less expensive than other short-term financing products.
- Borrower qualifications: You will not be eligible for a loan if you don’t meet Fundation’s borrower qualifications.
Positive Reviews & Testimonials
Fundation features a few testimonials on their website and there are some customer reviews elsewhere on the internet as well. Additionally, Fundation has been covered by many mainstream publications, including the Wall Street Journal, American Banker, Bloomberg, and PYMNTS.com.
Here’s what people like about this lending service:
- Customer service: The customer service takes the time to get to know you and your business, and wants to make sure you’re informed about the whole process.
- Fast funding rate: Time to funding is usually a week or less. When you consider that the process to get a bank loan or SBA takes months, a week starts to look pretty darn quick.
- No prepayment penalty: You are not penalized for being proactive about repaying your loan.
- Low interest rates: While some people complain about high interest rates, many people are happy with the rate that they received.
Final Verdict
If you have an established business and don’t want to go through a lengthy loan application process, Fundation is an excellent choice. Customer service is informative, and the rates and fees on offer are competitive with others in the industry.
That said, you cannot know your personal rates until you apply. Because each lender has their own underwriting standards, your rates will vary from lender to lender. To ensure you’re getting the best deal, it’s best to compare your options between a couple lenders.
Interested in making some comparisons? Check out some of our other favorite lenders.
Bianca Crouse
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