Fundation is a direct lender that offers small business loans online. Similar to traditional lenders, Fundation requires businesses to be at least 2 years old. Unlike banks or credit unions, this lender requires a minimum credit score of 620 for loans under $75,000 and 640 for loans greater than $75,000. Those with stronger credit scores who are unable to qualify for traditional bank loans may benefit from APRs as low as 7.99% with Fundation.
- Review: Should You Apply?
- Business Loan Features
- Application Process
- How Does Fundation Compare to Other Online Lenders?
Fundation business loans are good for established businesses with fair or better credit scores that need a quick funding solution, and if you have an excellent credit score, you may qualify for single digit APRs. Fundation offers loans up to $500,000 with terms up to four years. Although it has stricter eligibility requirements than other online lenders, Fundation provides more flexible terms and lower APRs (some alternative lenders have APRs that exceed 90%).
|Good for...||Bad for...|
To qualify for a Fundation business loan, your business needs to be at least 2 years old with an annual revenue of $200,000 and have at least three employees. For loans greater than $75,000, business owners must have a credit score of 640. Loans less than $75,000 only require a minimum score of 620. Borrowers cannot have any bankruptcies or foreclosures in the past three years, and they cannot be late on any payments in the past year.
While there is no specific collateral requirement for Fundation business loans, the lender has a blanket lien on your business assets, meaning that in the event of default, Fundation has the right to take possession of any business assets to fulfill the debt. You will also need to personally guarantee your loan, which makes you responsible for satisfying the debt if your business is unable to.
When you need to borrow even more than the original amount you requested, you can apply for more capital halfway through a one-year term or after 9 months for terms longer than one year. Fundation is also able to fund your loan offer in less than three days. Fundation offers APRs between 7.99% and 24.99%—compared to many other alternative lenders, this is a lower range of rates.
Fundation requires that borrowers make payments twice a month, which may not be ideal for business owners who want monthly repayment schedules or who do not want to make payments as frequently. You can pay off your loan early with no risk of penalty fees, which will reduce the length of your term. Fundation cannot lend to businesses in specific industries, including real estate, construction, retail, nail salons, used car dealerships and e-commerce.
Businesses with short-term needs for working capital can take loans out for one-year or two-year terms. Long-term business needs, such as investing in equipment or business expansion, can be covered by a loan with terms between two and four years.
|How Do I Qualify for a Fundation Business Loan?|
|Loan Amount Range||$20,000 - $500,000|
|APR Range||7.99% - 29.99%|
|Loan Terms||1 - 4 years|
Fundation has a multi-step online application process. You will need to fill out a business profile, a business profitability form, a personal credit profile, a business credit profile and other personal information. It’s important to know all the details of your business when you apply, including any benefits offered to employees, business insurance details and number of customers. If your business makes above $75,000 annually, Fundation will ask for two years of business tax returns. If your business makes less, you will need to fill out the application and provide three months of bank statements. Additional documents may be required for loans greater than $200,000.
Fundation will also evaluate your personal credit report and your business’s credit report. You can choose to allow Fundation to electronically retrieve these forms, or you can send in the documents yourself. After you fill out the application, a Fundation Customer Relationship Manager will contact you in less than one business day to verify your information. You will receive your loan offer as soon as you are approved and your funds within one to three days.
If you can’t meet the stricter requirements of Fundation, you may want to take a look at the competition.
If you want to request smaller amounts of money as needed, Kabbage offers lines of credit up to $150,000. Kabbage has much less stringent requirements than Fundation, only requiring a minimum age in business of 1 year, an annual revenue of $50,000 and no minimum credit score for a line up to $100,000. To be eligible for up to $150,000, you'll need to be in business three years with $500,000 in annual revenue. To qualify for a Kabbage line of credit, you’ll need at least one online financial service application that you can link to your Kabbage account. PayPal users may also benefit from quicker funding times.
If you want longer terms and the flexibility of a line of credit or you cannot meet the revenue minimum for Fundation, LendingClub is a good option. Both Fundation and LendingClub offer business loans. For business loans, LendingClub offers longer terms up to five years, but lower loan amounts (maximum of $300,000). LendingClub also requires a minimum of two years in business and a minimum preferred credit score of 620. LendingClub requires at least $75,000 in annual revenue and the borrower must own at least 20% of the business. Those with strong credit scores may also benefit from APRs as low as 7.77%.
OnDeck is the better choice if you have a strong credit score and want more flexibility with a line of credit. Like Fundation, OnDeck offers business loans up to $500,000. OnDeck also provides lines of credit up to $100,000. OnDeck has less strict requirements than Fundation for business loans: a minimum of one year in business, a gross annual revenue of $100,000 and a minimum credit score of 500. Those with excellent credit scores can benefit from single-digit APRs on loans, but low credit scores may have APRs exceeding 40%.