Fundation Business Loan Review

Fundation may be a good option for businesses that need fast funding and flexible terms.

Teddy NykielFebruary 5, 2019
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Online lender Fundation is a good option for small-business owners who:

  • Want flexible term lengths: With terms from one to four years, you can access short-term cash for payroll or inventory, or longer-term financing for bigger projects.

  • Have employees: Fundation requires that businesses are made up of the borrower and at least two other individuals.

Fundation loan details

  • Loan amount: $20,000 to $500,000.

  • APR: 8% to 30%.

  • Loan term: 1 to 4 years.

  • Funding time: Average of 1 to 3 days.

How to qualify for a Fundation loan

Before you apply for a Fundation loan, find out whether you meet the minimum qualifications.

  • 660+ personal credit score.

  • 2+ years in business.

  • $100,000+ in annual revenue.

  • 3+ employees.

  • Personal guarantee required.

  • Lien on business assets required.

Reasons to use Fundation

  • Broader view of the borrower: As part of the underwriting process, you’ll discuss with a Fundation underwriter why you’re borrowing and how you intend to use the money, and clarify any questions the company may have about your application. The conversation helps round out Fundation’s view of you as a borrower, because the underwriting data the company collects “doesn’t always give the full picture,” Fundation Chief Executive Officer Sam Graziano says.

  • Human touch: When you apply, you’ll be paired with a Fundation customer relationship manager who will help you through the loan process. Through phone calls and emails, he or she will answer your questions and prepare you for your call with a Fundation underwriter.

  • Opportunity to borrow more: After nine months (or six months if you’re borrowing for one year), Fundation will let you refinance and borrow more — as long as you’ve been paying on time.

Where Fundation falls short

  • Not for very small businesses: If your business is just you and a partner, Fundation isn’t an option for you. The lender requires that you have at least three employees — you can include yourself — to qualify for a loan.

  • More frequent repayments than with banks: Fundation automatically deducts loan repayments from your bank account twice a month, whereas banks and some online lenders that offer similar loans to Fundation typically collect monthly repayments (and yet other online lenders collect daily repayments). Graziano maintains that making payments more often helps some businesses manage their cash flow because each payment is smaller. Still, Fundation isn’t the best option for you if you prefer to make monthly repayments or have uneven cash flow.

Compare business loans

If you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.