Fundation Small Business Loans Review

About Fundation


Fundation is a leading online lender to businesses nationwide. Our credit products are easy to understand with customer-friendly features like no prepayment penalties, as well as competitive pricing, matched with outstanding, award-winning customer service. We deliver a simple, quick online application where customers can apply in less than 10minutes and receive funding in as little as 1 business day. As a direct lender, we use our own capital to originate and hold loans so we can build relationships with our borrowers that extend beyond the point of initial credit approval. In addition, Fundation is a trusted partner of some of our nation’s hometown bankers and is backed by world-class investors.

What is Fundation?

Fundation is an online small business lender and credit solutions provider. The company partners with banks, financial institutions and non-traditional lenders to deliver data-driven funding solutions for small businesses.

Founded in 2011, the Virginia based lender offers fixed-rate term loans and lines of credit.

Lender highlights

Fundation is an award-winning fintech firm, recognized for the third year by Business NewsDaily as the Best Alternative Lender for Working Capital Loans.
With a Fundation term loan or line of credit, you can borrow up to $500,000 with a maximum term of four years. Annual percentage rates (APR) range from 8.99% to 29.99%. Compared to other alternative lenders, Fundation offers competitive rates, even compared to traditional lenders, in as little as two days.
Some highlights of their lending program include:

  • Innovative technology. The company’s proprietary technology streamlines the loan application process and delivers an award-winning customer experience. Customers can easily access and manage their account online or by calling or emailing the customer service team.
  • Highly transparent. Fundation removes the guesswork when it comes to small
    business owners looking to research lending or credit options. The website details the eligibility requirements, rates, terms, and much more.
  • Quick funding. Qualifying business owners who complete the application process and provide the required documentation can be approved for funding in as little as one day.

Compare small business loan offers

What Fundation offers?

Fundation offers two type of funding solutions for small businesses:

Term loan. A term loan is a lump sum of money used to expand the business, purchase equipment or make capital improvements. Set payments are due twice per month.

Line of credit. A line of credit from Fundation works like a credit card. It gives business owners access to working capital for short-term needs to pay for expenses such as payroll, invoices or inventory. You borrow against the total amount you were approved for, and only pay interest on the amount of money you have borrowed, not the total amount approved. Payments are due once per month.

Fundation: At a glance
Loan product Loan amount Loan term APR range/ factor rate Fees Time to funding
Term loan $20,000 to $500,000 1 to 4 years 8.99% to 29.99% Up to 5% origination fee deducted from net proceeds As soon as two days
Line of credit $20,000 to $100,000 Remaining balance after each draw is amortized

in equal installments over 18 months

8.99% to 29.99% $500 closing fee

2% draw feed deducted from each draw

As soon as two days

Rates current as of 2/11/2019

Unlike other online lenders, there are no fees or penalties if a loan or line of credit is paid off early. By paying off a loan in advance of the maturity date, a borrower will save on the total amount of interest they pay for the amount of money borrowed.

Eligibility requirements

There are several minimum qualification factors to be considered for a small business loan or line of credit.

Loan product Annual revenue Min. business credit score or personal credit score Time in business
Term loan At least $100,000 Good personal credit Minimum 1 year
Line of credit At least $100,000 Good personal credit Minimum 1 year


To qualify for a loan or business line of credit, borrowers must have at least three employees in addition to the minimum eligibility factors listed above.

Fundation does not require any specific collateral to qualify for a loan. However, borrowers are required to give a personal guarantee. This guarantees that the business owner will pay back the outstanding balance on the loan or line of credit, even if the business fails.

In addition to a personal guarantee, loans are secured with a uniform commercial code (UCC)-1 agreement. This blanket lean allows Fundation to claim ownership of business assets in case the business fails and the person responsible to pay back the loan is not able to do so.

Additional eligibility factors

Fundation takes a risk-based approach to determine loan eligibility and interest rates.

Known as risk-based pricing, Fundation offers customers different interest rates based on the estimated risk that the borrower will default on the loan. In general, if you’re considered a higher risk borrower, Fundation will offer you a loan with higher interest rates compared to lower risk borrowers.

The company doesn’t have a specific formula to determine if someone is considered higher-risk. Applicants are evaluated based on four categories:

  1. Business stability
  2. Personal and business credit history
  3. Financial metrics
  4. Cash flow and debt

Businesses that are not eligible for Fundation loans

Fundation does not offer lending solutions in Nevada, North Dakota or South Dakota.

How to apply for Fundation financing

Fundation offers a quick and easy online application process.

The application process is unlike any of its competitors. Applicants filling out the online application form are given real-time, interactive feedback. This is to ensure complete visibility into the criteria used to evaluate their application.

To get started with the online application process, you’ll be asked to provide basic information about yourself and your business, such as:

  • Business name
  • Zip code
  • Use of proceeds
  • Age of business
  • Annual sales
  • Annual profit before tax

During the application process, a loan specialist will reach out to request additional documents to process the application, including:

  • Personal identification
  • Contact information
  • Financial statements
  • Bank statements
  • Tax returns
  • Bank statements
  • Social security number

Requests for past financial and persona data are standard across most traditional and alternative lenders. Once all documentation has been submitted, an underwriter will review the application to approve or deny the loan or line of credit.


Pros Cons
  Real-time, interactive feedback to applicants during the loan application process   Minimum 1 year in business
  No hidden fees   Businesses with less than 3 employees can’t qualify
  No prepayment penalties   Personal guarantee

Who is the best fit?

Fundation is ideal for an established income generating business. The company is a small business lender; however, not all businesses can qualify for a loan.

Because a business has to be in business for at least one year, have at least three employees and an annual revenue of at least $100,000, not all small business will even make it past the pre-application process.

Although Fundation lists the eligibility requirements on their website, many small businesses won’t qualify because of these stringent minimum requirements.

Fine print

Fundation’s website provides a lot of details about their loan and line of credit. Unlike many lenders, they’re upfront about the loan terms, rates and qualification requirements.

The bottom line: How Fundation stacks up

Small business owners are looking at alternative lenders for loans traditionally funded by banks. Fundation’s term loan or line of credit might be a good option for established small businesses in need of funding.

Securing a loan from Fundation depends on a variety of factors. So, before you apply, it’s always good to shop around to find the best lender for your funding needs.

Compare small business loan offers