As of October 2020, Fundation has paused their lending business. This review includes details about their products and services prior to that pause. If and when Fundation resumes lending, this review will be updated to reflect any new changes or information.
Fundation is a Virginia-based online business lender that offers medium-term loans and business lines of credit. Their rates approximate those that you can get at a bank—and because of their tech-enabled application and underwriting processes—Fundation can approve and fund business loans in a fraction of the time that a bank can.
Pros and Cons
- Affordable rates and flexible terms, similar to what you could get at a bank
- Fast, online-based application process; average time to fund is three business days
- No prepayment penalties, can save on interest by paying early
- Offers medium-term loans and lines of credit; can be used for a variety of purposes
- Not accessible for startups or very small businesses (need at least three employees to qualify)
- Need above average credit score to qualify (600+)
- Not as fast to fund as some alternative lenders
- Term loan requires bi-monthly payments (instead of monthly)
Fundation Business Loans
Fundation offers two different financing products for small businesses—a medium-term loan and a business line of credit.
Fundation Term Loan
With flexible term lengths and affordable rates, Fundation’s medium-term loans are great for qualified business owners to finance a range of projects—from working capital needs to larger investments, such as equipment purchases or renovations.
Max loan amount
$20,000 to $500,000
One to four years
8% to 30% APR
Qualifications for Fundation Term Loan
Time in business
Fundation Line of Credit
Fundation’s business line of credit is best for business owners who want flexible financing to cover short-term working capital needs, as well as those who want access to an affordable credit line for emergency purposes.
Max credit line
$20,000 to $150,000
Line of credit terms
8% to 30% APR
Qualifications for a Fundation Line of Credit
Time in business
Fundation Borrower Eligibility
As you can see, your ability to qualify for financing from Fundation will vary based on which of their two products you’re applying for. That said, however, there are some additional eligibility requirements you’ll want to keep in mind:
Fundation does not work with businesses in the following industries:
- Used car dealerships
- Real estate agents
- Adult entertainment
- Lending or money services
Financial and Business History
- Fundation requires you have a business bank account with a minimum average bank balance of $2,000.
- Fundation requires that you operate a business with three or more employees (you can include yourself in that count).
- Fundation will not lend to you if you’ve had a bankruptcy in the past three years.
Fundation does not work with businesses located in Nevada, Vermont, South Dakota, or North Dakota.
They also do not work with businesses that operate out of a home address.
Of course, on top of the annual revenue, time in business, credit score, and all of the business loan requirements listed above, Fundation will evaluate your application as a whole to determine if you qualify for financing.
What You Need to Apply
- Basic information about you, the business owner, your business, and your loan request
- Three months of business bank statements
- For loans greater than $100,000, you’ll also need:
- Six months of business bank statements
- Two most recent business tax returns
- Profit and loss statement
- Updated balance sheet
- Updated debt schedule
How to Get a Business Loan From Fundation
If you think a Fundation loan might be right for your business, you can start the simple and fast application process online. Here’s what you need to know about getting financing from Fundation:
Application and Underwriting Process
The first step is to submit your Fundation online application. The application takes just a few minutes to fill out and contains basic information about you, your business, and loan request.
Once you submit their business loan application, Fundation will do a soft pull on your personal credit score automatically. If your personal credit score passes Fundation’s minimum criteria, they’ll check your business credit score.
After checking both credit scores, Fundation reviews the rest of your application within a few hours of submission. If you pass the initial screening, then you’re ready for underwriting. Fundation will collect your documentation at this stage and present your documents to their underwriters for manual review. Fundation can underwrite your application within 24 hours.
That said, you’ll want to keep an eye out for an automated email informing you that Fundation has pulled your credit scores and sent your file to underwriting. This email will also include instructions for logging into your customer portal, where you can review the status of your loan approval.
In addition, it’s worth noting that Fundation will do a hard pull on your credit score when your application is completed and submitted. Fundation pulls credit history from Experian.
If you request a term loan above $100,000, Fundation will call you prior to making their decision to briefly talk on the phone about your request. If the request is below $100,000, you won’t get a call from Fundation.
In general, you can expect a turnaround time of one to two days from submitting your application to receiving an offer. Before you decide to accept an offer from Fundation, it’s important to review the agreement and understand a few points about Fundation loans:
- Fundation charges an origination fee of up to 5% and if you’re delinquent on your loan, a late fee might apply.
- You will be required to sign a personal guarantee and Fundation will place a UCC blanket lien on your business assets.
- Fundation term loans come with twice-monthly payments and the lines of credit have monthly payments.
With this in mind, if you get a “yes” from Fundation and you accept their offer, you’ll see the approved funds in your bank account as quickly as one day.
The entire process, from application to funding, generally takes about three business days—but may take as long as 30 days. And if you get bad news back from Fundation, don’t worry—you can reapply after a waiting period of three months.
As we briefly mentioned, if you accept a term loan offer from Fundation, your loan payments will be automatically debited from your bank account twice per month.
The payments will occur either on the 1st and 16th of every month, or the 8th and 23rd of every month, depending on what cycle you’re on. Payments are debited once per month for Fundation’s line of credit product.
If you want to check on the progress of your loan at any point, you’ll have access to an online portal. You can also request a payment schedule from Fundation to keep track of what you’ve paid and what’s still outstanding on your loan. And, after you’re approved, you’ll be paired with a customer success manager to help you manage and pay your loan at each step along the way.
That said, Fundation does not charge prepayment penalties, so you’ll also be able to repay your loan or line of credit early—and save on interest if you choose to do so.
You can also be eligible for a loan renewal from Fundation, but only after nine months have passed since the first time you applied for a loan from them. Once you’re given a renewal offer from Fundation, you have five business days to accept it.
Finally, it’s important to note that Fundation does not report your payment history to the personal credit bureaus when you take out financing with them. Therefore, although you can use one of their products to build and improve your business credit, your borrowing habits will neither boost nor harm your personal credit.
What do previous customers have to say about their experience with Fundation? Truth be told, there aren’t an abundance of Fundation reviews available online.
That said, however, Fundation is a BBB-accredited business with an A+ rating. On the BBB website, Fundation has four customer complaints in the last three years and appears to have tried to resolve all of them with the customers in question.
Fundation is rated 3.8 out of five stars on Trustpilot, although they only have two reviews on this review site. Fundation’s customer reviews on Lendio are a bit more populated—with 19 reviews—and most customers have rated them five out five stars.
These reviews offer a little more insight, with customers commenting on great customer service, quick and easy process, and fast access to funds.
Unfortunately, with such little information, it’s hard to gauge too much from Fundation reviews. Therefore, if you’re considering applying for a loan or accepting an offer from Fundation, we’d recommend asking if they have previous customers they can refer you to in order to learn more about it’s like working with this lender.
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Is Fundation in Fundera's Network?
Fundation is in Fundera’s Lender Network. The Fundera team has carefully vetted Fundation and determined that their offering is one of the best in their product category. When working with Fundation, you can be sure you’re getting transparent, fair pricing on a best-in-class product.