Our Take
The bottom line:
Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital.
National Funding - Online Term Loan
Max Loan Amount
$500,000
Min. credit score
600
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Pros & Cons
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Short-term loans require daily or weekly repayment.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing.
Full Review
National Funding is an online lender that issues small-business loans to entrepreneurs in a variety of industries. The company offers short-term, working capital loans as well as equipment financing and leasing.
National Funding is known for its flexible eligibility requirements, simple application process and fast funding timeline. The lender charges interest as a factor rate, however, which can make it difficult to compare costs with those of other lenders.
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
National Funding is best for borrowers who:
- Need cash fast. National Funding offers a simple application process with minimal documentation required. You can apply, receive a decision and get funding in as little as 24 hours.
- Can repay the loan early. You may be able to receive a special discount for repaying your loan early. When you get your business loan agreement, National Funding will provide information regarding the discount amount and time parameters. You must pay off your balance in full within the given timeline to access the discount.
- Don’t meet the eligibility requirements of other lenders. National Funding considers borrowers with at least six months in business as well as those with bad credit.
National Funding loan features
National Funding offers short-term business loans, which can be used to make payroll, purchase inventory and cover working capital needs, among other purposes.
The lender also offers equipment financing and equipment leasing. These options can be used to purchase or lease used or new equipment.
Short-term loan | Equipment financing and leasing | |
Loan amount | $5,000 to $500,000. | Up to $150,000. |
Estimated APR range | National Funding quotes interest as a factor rate — which starts at 1.1 for borrowers with strong credit. | National Funding quotes interest as a factor rate — which starts at 1.1 for borrowers with strong credit. |
Fees |
|
|
Terms | Four to 24 months. | 24 to 60 months. |
Repayment schedule | Daily or weekly. | Monthly. |
Funding speed | As fast as 24 hours but may vary based on your underwriting and bank processing times. | As fast as 24 hours but may vary based on your underwriting and bank processing times. |
National Funding loan requirements
To qualify for a business loan from National Funding, you’ll need to meet the following minimum criteria:
- Minimum credit score:600.
- Minimum time in business:6months.
- Minimum annual revenue: $250,000.
National Funding also requires that you have a business bank account. If you’re applying for equipment financing or leasing, you’ll need to provide an equipment quote from a vendor as part of your application.
Where National Funding stands out
Quick application and funding
National Funding’s loan application is relatively simple. Business owners can apply online in minutes and get a decision within 24 hours. Plus, approved loans may be funded as soon as the next business day. A business loan from a traditional bank takes days or even weeks to get from application to funds in the bank.
Easier for businesses to qualify
Small-business owners typically need a credit score of 690 or higher to qualify for an SBA loan or to secure a loan through a traditional bank. National Funding offers business loans to borrowers with bad credit (a personal credit score as low as
600
).National Funding can also be a good option for startup companies because the lender requires a minimum of only six months in business to qualify.
Early repayment discount
Instead of charging prepayment penalties, National Funding offers a discount for borrowers to repay their loans early. Before you accept the terms of your loan, National Funding will provide the prepayment discount amounts and details of the offer.
To receive the discount, you must pay off your balance in full, be current and be in good standing within the given time parameters.
Where National Funding falls short
Daily or weekly repayments
National Funding’s short-term loans require daily or weekly payments. This frequent payment schedule can put a strain on businesses with irregular sales or cash reserves that are already stretched thin.
Charges interest as a factor rate
National Funding charges interest on its business loans as a factor rate. Factor rates are multiplied by your loan amount to calculate the total amount you’ll need to repay.
For instance, say you have a 12-month, $20,000 loan with a factor rate of 1.1. To calculate the total cost of the loan, you’d multiply $20,000 by 1.1 to get $22,000.
Compared with more traditional interest rates, factor rates can be hard to understand and make it more difficult to compare loan costs with those of other lenders. Converting your factor rate into an annual percentage rate, or APR, can give you a better sense of your borrowing costs.
Lack of website transparency
National Funding’s website can make it difficult to determine exactly what type of loan products the lender offers. For example, the main navigation allows you to browse “Loans & Financing,” which lists: Small Business Loans, Working Capital Loans, Short Term Business Loans and Equipment Financing and Leasing, among your options. Based on this list, you might be led to believe that National Funding offers four types of loans.
When you investigate further, however, you’ll find that the lender offers only short-term loans and equipment leasing and loans. Similarly, the website also displays loans based on industry (e.g., construction loans, medical practice loans, agriculture business loans), which can cause a similar type of confusion about the actual financing options National Funding offers.
Alternatives to National Funding
OnDeck
OnDeck offers short-term business loans as well as lines of credit with fast funding times and flexible qualification requirements. You can get a short-term loan of up to $250,000 and a line of credit of up to $100,000.
Like National Funding, you can apply for a loan from OnDeck in just minutes and receive approval the same day. Funds can be available in as little as 24 hours.
To qualify for an OnDeck loan, you’ll need a minimum credit score of
625
, at least 12
months in business and a minimum annual revenue of $100,000.Triton Capital
If you’re looking for an alternative equipment lender to National Funding, you might consider Triton Capital. Triton offers equipment loans up to $250,000 with repayment terms up to five years. Unlike National Funding, however, Triton Capital does not offer equipment leasing.
With Triton, you can finance used or new equipment, and interest rates start as low as
5.99
%. You can apply for equipment financing online with minimal documentation and receive approval within two to four hours. After you’ve been approved, Triton is typically able to provide funds within one to two business days.To qualify for an equipment loan from Triton, you’ll need a minimum credit score of
575
and annual revenue of $250,000 or more. Generally, Triton prefers that companies have 24
months in business.Compare your business loan options
The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. NerdWallet recommends comparing small-business loans to find the right fit for your business.
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Methodology
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including: transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to business credit bureaus and responsible lending practices. We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
Frequently Asked Questions
Yes. National Funding is a privately held small-business financing company based in San Diego. The company has been in operation since 1999 and accredited by the Better Business Bureau since 2013.
National Funding has an A+ rating with the BBB and over 1,600 Trustpilot reviews for a score of 4.8 stars.
No. When you apply and get a loan with National Funding, the company will only perform a soft credit inquiry so that your credit score is not impacted. If National Funding refers you to one of their lending partners, however, some of those companies may do a hard credit pull.
National Funding Ignite is a direct-mail campaign that the lender uses to encourage small-business owners to apply for working capital loans. The mail campaign includes a picture of a card that looks like a credit card, called the Ignite card. When business owners apply for a loan on the National Funding website, they can input this personalized number to link their application to the pre-qualification card they received in the mail.
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