Our Take
4.4
NerdWallet rating
The bottom line:
Fundation stands out by offering business loans to companies with lower annual revenue than many competitors require, making it a good option for newer businesses still finding their footing. The ability to repay early without penalties is another plus, as it can help business owners save on interest.
But, potential borrowers should weigh these benefits against Fundation’s relatively high credit score requirements and upfront origination fees. Business owners with strong credit may find more affordable options elsewhere.
Fundation - Line of credit
Max Loan Amount
$150,000
Min. credit score
680
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Pros & Cons
Pros
- Low revenue requirements compared with other online lenders.
- No prepayment penalties.
- Can be used to build business credit.
Cons
- Higher credit score requirements than some other online lenders.
- Charges origination fees, and a line of credit inactivity fee.
- Not available in Hawaii, Massachusetts, Michigan, North Dakota, New Jersey, Nevada, New York, Ohio, Pennsylvania or Tennessee.
Full Review
Fundation is an online lender that offers term loans and lines of credit for small-business owners seeking working capital. These small-business loans can be used to buy equipment, refinance existing debt, expand your business and more.
Its business line of credit provides up to $
150000
, repayable over a maximum of 24
months; while its term loan offers up to $500000
with a repayment period of up to 48
months.Fundation is a subsidiary of Quantum Lending Solutions, a Virginia-based fintech company.
Fundation is best for borrowers who:
- Want repayment flexibility: You can make payments on your loan either semimonthly or monthly, depending on the type of loan. Plus, there’s no prepayment penalty if you decide to pay off your debt early.
- Have a fair credit score or better. To qualify for a Fundation term loan, you’ll need a credit score of at least660, while a line of credit requires a minimum score of680.
- Don’t generate a ton in sales. Fundation lends money to business owners who bring in at least $50000in annual revenue and have been in business for at least a year.
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.
Fundation loan requirements
To qualify for a loan from Fundation, you’ll need to meet the following minimum requirements:
- Credit score:660for a term loan;680for a line of credit.
- Time in business:12months.
- Annual revenue: $500000.
Fundation loan features
Fundation offers a business term loan and a business line of credit. Here’s what you can expect from Fundation's financing, based on loan type.
Fundation term loan
4.2
NerdWallet ratingLoan amount | $ 10000 to $500000 . |
Estimated APR | Starting at 17.73%; average of 27.7%. |
Fees |
|
Terms | 12 to 48 months. |
Repayment schedule | Semimonthly. |
Funding speed | Pre-approval within three business days and processing in three to five business days. |
Fundation line of credit
4.4
NerdWallet ratingLoan amount | $ 10000 to $150000 . |
Estimated APR | Starting at 20.21%; average of 32.09%. |
Fees |
|
Terms | 12 to 24 months. |
Repayment schedule | Monthly. |
Funding speed | Pre-approval within three business days and processing in three to five business days. |
» If you’re not sure which to choose, compare business loans vs. lines of credit
Where Fundation stands out
Low annual revenue requirements
Your business must make at least $
500000
in annual revenue in order for you to qualify for a term loan or business line of credit from Fundation. This minimum revenue requirement is lower than many other online lenders, some of which require $100,000 or more. This lower threshold can be especially helpful for newer businesses still working to establish a customer base.Flexible repayment schedules
Fundation's term loan requires borrowers to repay their loan twice a month, while its line of credit offers the convenience of monthly payments. These repayment schedules provide greater flexibility compared with many other online lenders, which require weekly or even daily repayments.
Ability to pay debt early
With a Fundation term loan or line of credit, small-business owners can repay their debt early without incurring a prepayment penalty — something not all lenders allow. This can help lower borrowing costs, especially after a particularly strong month or quarter.
💬 From our Nerds: Repayment flexibility gives business owners breathing room
“The ability to make semimonthly or monthly payments gives small-business owners breathing room to manage their cash flow without the constant pressure of daily or weekly withdrawals. This flexibility can be very helpful for businesses with fluctuating revenue, making it a more manageable option than lenders that demand frequent payments.”
Ryan Brady, lead writer, Small Business
Where Fundation falls short
Limited availability
Businesses located in Hawaii, Massachusetts, Michigan, North Dakota, New Jersey, Nevada, New York, Ohio, Pennsylvania or Tennessee are ineligible for financing from Fundation. The company also doesn’t lend money to business owners operating within certain industries, such as car dealerships or some financial services. You can find the full list on its website.
High credit score requirement
Compared with other online lenders, Fundation’s minimum credit score requirements are a bit high. For its term loan, Fundation requires a credit score of
660
or higher, while borrowers seeking a line of credit must have a credit score of at least 680
.Upfront costs
Fundation charges a 5% origination fee for its term loan and a 3% origination fee for its line of credit. Business loan origination fees are upfront costs borrowers pay to cover the expense of processing a loan, but not all lenders require them. These fees add to the overall cost of a loan. Fundation says the average APR charged to applicants of its term loans is 27.7%, while the average for its line of credit is 32.09%.
Alternatives to Fundation
OnDeck
OnDeck
OnDeck - Line of credit
NerdWallet Rating
5.0
Min Credit
625
Read Review
Apply now
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OnDeck is another online lender offering both term loans and lines of credit for general working capital. But unlike Fundation, it may accept borrowers with bad credit. OnDeck requires a minimum credit score of just
625
, while Fundation requires at least 660
or 680
, depending on the type of loan. This makes it a good alternative for borrowers with slightly lower credit scores, however, you’ll also need at least $
100000
in annual business revenue to qualify for financing from OnDeck.Fundbox
Similar to Fundation, Fundbox also offers an online business line of credit up to $
150000
for general working capital. Fundbox funds faster than Fundation and only requires $30000
in annual revenue and three months in business, but you’ll have to make weekly payments and probably pay a higher APR.» Want more options? Check out our list of best online business loans.
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