Fundera Review 2021: Pros, Cons, Rates & Fees

Creating order from the chaos of small business financing is what Jared Hecht set out to do by creating Fundera. The popular fintech platform, acquired recently by NerdWallet, doesn’t process loans. It’s simply a marketplace of financial products designed to help borrowers compare their options. Entrepreneurs can quickly access the resources they need to fund and grow their small businesses

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    Financially Reviewed by Gordon Scott

    Fundera is a business loan aggregator service that was founded back in 2014. Since then, it’s helped more than 85,000 customers secure $2.5 billion in funding, and the platform prides itself on strong customer service. While its primary focus is on small business loans, Fundera has branched out into credit card and business bank account connection services too, meaning it’s a one-stop shop for any entrepreneur looking to launch a new venture. 

    What Is Fundera?

    Fundera offers a range of loans aimed at helping both new and established small businesses. You can opt for an all-purpose loan, or one of the platform's many specialist options including equipment purchasing, SBA loans, and invoice financing. 

    You can borrow between $5,000-$500,000 from anywhere between three months to 25 years. Applications can be completed quite quickly, but funding could take up to three weeks to be credited to your account depending on how complex your application is. 

    Advantages and Disadvantages of a Fundera Business Loan

    Fundera Advantages

    • Flexibility - There’s an impressive range of loan types, repayment terms, and borrowing amounts on offer here. Fundera covers just about every type of lending a small business will ever need
    • Competitive rates - Interest rates can start from as low as 6%, meaning those with good credit scores have a good chance of securing a deal here
    • Connections to multiple lenders - Fundera works with a huge range of big-name lenders across the country and has good coverage across all 50 states
    • Soft credit check - When connecting you with lenders, your credit history will only undergo a soft check. You can view deals without having to worry about your score taking a hit

    Fundera Disadvantages

    • Potentially lengthy funding times - It could take up to three weeks to get the funding deposited into your account. While most customers will receive their cash much sooner than this, it’s still something to be aware of
    • Unclear eligibility criteria - Many of Fundera’s eligibility criteria aren’t made clear until you actually apply. This can make it a little difficult to plan ahead

    Fundera Loan Features

    Fundera features eight impressive loan types and the variety should be more than enough to cover the borrowing needs of just about any small business. Terms are flexible across the different categories, and rates can start from as low as 5.5%.

    Fundera SBA Loans

    SBA loans are business loans that have been guaranteed by the federal government and are intended to promote economic development. Fundera acts as an approved provider and can be a good option for those that have been rejected by the banks:

    Loan Type

    SBA loans

    Term length

    Up to 30 years

    Repayment period

    Monthly

    APR range

    Starting at 2.75%

    Min - Max amount

    Up to $2 million

    Fundera Term Loans

    Term loans are a fairly standard offering that’s repaid on a monthly basis. Fundera will connect you to dozens of lenders that can provide this type of loan.

    Loan Type

    Term loans

    Term length

    1 - 5 years

    Repayment period

    Monthly

    APR range

    7% - 30%

    Min - Max amount

    Up to $600,000

    Fundera Business Line of Credit

    Business line of credit works a little like a credit card but with lower interest rates. You’ll be allotted a portion of cash you can draw when needed. You’ll then pay interest only on funds drawn.

    Loan Type

    Business line of credit

    Term length

    3 month - 18 months

    Repayment period

    Flexible

    APR range

    7% - 25%

    Min - Max amount

    $10,000 - over $1 million

    Fundera Equipment Financing

    Equipment financing is quick funding for buying new or used equipment for your business, which can then serve as its own collateral.

    Loan Type

    Equipment financing

    Term length

    5 - 6 years

    Repayment period

    Monthly

    APR range

    4% - 40%

    Min - Max amount

    Up to 100% of the cost of the equipment

    Fundera Invoice Factoring

    Invoice factoring enables you to borrow funds against the value of your unpaid invoices. Unlike other platforms, Fundera will let you borrow against the full value of all outstanding invoices. A good option for B2B businesses. 

    Loan Type

    Invoice financing

    Term length

    Until your customers pay their invoices

    Repayment period

    Usually weekly or daily

    APR range

    3% processing fee, ~1% each week until invoice is paid

    Min - Max amount

    Up to 100% of the value of your invoices

    Fundera Microloans

    Designed to assist small businesses and startups, microloans can be paid in a lump sum and used for a variety of purposes. 

    Loan Type

    Microloans

    Term length

    Up to 6 years

    Repayment period

    Monthly

    APR range

    8% - 13%

    Min - Max amount

    Up to $50,000

    Fundera Commercial Real Estate Loans

    Commercial real estate loans are used to finance the purchase of a building, shop, office space, or other commercial property. Terms are much longer than other business loans and limits much higher.

    Loan Type

    Real estate loans

    Term length

    Up to 25 years

    Repayment period

    Monthly

    APR range

    5% - 30%

    Min - Max amount

    Up to the full value of the property, although no limit is disclosed

    Fundera Merchant Cash Advance

    Merchant cash advance loan is for business owners who aren’t able to qualify for other types of business loans. Here, you’ll be paying your loan back on a daily or weekly basis directly from your credit card sales and can expect high rates.

    Loan Type

    Merchant cash advance

    Term length

    3 - 6 months

    Repayment period

    Daily or weekly - Typically around 15% of sales

    APR range

    Factor rates between 1.15 and 1.48

    Min - Max amount

    $2000 - $500,000

    Fundera Interest Rates and Fees

    As Fundera is a connection service only, it can be a little difficult to get information on fees before you sign up. These will vary from lender to lender, and is something you should always check for in the fine print of your agreement before you sign on the dotted line. Keep an eye out for:

    • Origination fees - Typically anywhere between 1% - 5% on average, any higher than this and we wouldn’t recommend it
    • Prepayment fees - Most lenders won’t charge you for repaying early so if these fees are particularly high it could be a red flag
    • Late payment fees - This will usually be a percentage of that month’s missed payments, usually around 5% - 10%
    • Maintenance fees - This is usually found on a line of credit and will be around $50 per month. You shouldn’t really be paying these fees on other types of lending

    The same is true for interest rates, and you won’t really know what you’ll get until you apply. However, Fundera offers the following indicative rates for each loan type:

    • SBA - From 2.75%
    • Term Loans - Between 7%-30%
    • Business line of credit - Between 7%-25%
    • Equipment financing - 4% - 40%
    • Invoice financing - A 3% flat charge on the total amount, plus ~1% per week on any outstanding balance
    • Microloans - From 8%
    • Commercial real estate - Between 5% - 30%
    • Merchant cash advance - Factor rates between 1.15 - 1.48

    Fundera isn’t just a business loan specialist. You can find business bank accounts, credit cards, accounting services, HR platforms, payroll guidance and legal services too. In fact, the platform is a one-stop shop for anyone that’s looking to set up a business from scratch. 

    How to Qualify for a Fundera Loan

    The only stated requirement of a Fundera loan is that applicants must have a credit score of at least 600. However, even if you have lower credit you may still be accepted based on other financial criteria, so it’s worth applying. 

    With regards to other requirements, you’ll find the platform is pretty flexible. There are no set annual revenue criteria, nor is there a minimum time you need to have been in business. The lenders you’re being connected to will use a whole range of different assessment methods to determine your eligibility, so even those new to borrowing don’t need to worry.

    You won’t receive a hard pull on your credit rating to view your offers, making it easy to check exactly what you’re eligible for before you need to submit a formal application. 

    A summary of all loan types is below:

    Criteria

    Less Than $100,000 Loan

    More Than $100,000 Loan

    Minimum Credit Score

    550+

    550+

    Minimum Annual Revenue

    No minimum requirement

    No minimum requirement

    Minimum Time in Business

    No minimum requirement

    No minimum requirement

    The Fundera Application Process

    The application process for a Fundera loan couldn’t be simpler. All you need to do is enter your loan type, purpose, requested funding, and a few personal details and you’re done. You’ll instantly be provided with a list of potential lenders, and someone from the Fundera team will be in touch to discuss options with you. 

    Once you’ve selected an offer, you’ll be asked to fill out a formal application form specific to that lender. Submit this alongside your documents and you’re all finished. 

    Since Fundera is a connection service, each lender will have different documentation criteria, and the platform doesn’t have a comprehensive list of everything you’ll need. Generally, you’ll be asked to supply: 

    • Some personal ID - Usually government issued like a driving license
    • Your business registration documents
    • Evidence of income over the past several years
    • Tax returns
    • Proof you own the business.
    • If you’re applying for a startup loan you’ll most likely be asked for your business plan

     

    You’ll even find free resources to help guide you through every aspect of setting up a new venture, including organizing insurance, how to file your business taxes, searching for ecommerce solutions, dealing with marketing and managing your data. It’s easy to see why the platform has become such a popular choice.  

    How Does Fundera Determine the Loan Amount?

    Fundera is a loan aggregator service, meaning the platform doesn’t actually determine how much you can borrow, or your interest rate. Instead, a computer algorithm that will determine which lenders will be most suited for your business needs. From here, you will get to decide which one you’d like to apply for, often from dozens of different choices. Each of these lenders will use different methods to determine your final terms. 


    Fundera Customer Support

    You can get in touch with customer support via telephone or by email; however, operating hours aren’t listed on the website. Once you’ve actually signed up for a loan, you’ll need to go directly to that lender with any queries, so you might want to do some additional research before accepting any offers. 

    Fundera Loan Reviews

    Fundera has a very impressive 4.7 stars out of 5 on TrustPilot and 5 out of 5 on Site Jabber. Customers are generally very satisfied with the fast, efficient and friendly service offered by the platform. The company is praised for its clear communication and the very personal service its agents give to help customers choose the right loan. 

    Where any criticism is raised, Fundera responds to this quickly, and always offers to assist in putting things right. In some rare instances, customers have expressed dissatisfaction with loans, however, this doesn’t fall under the responsibility of Fundera as the platform doesn’t set rates and terms. 

    Positive Fundera Reviews

    Negative Fundera Reviews

    Great customer Support Team

    Some issues when responding to emails

    Fast application process and approvals

    Covid relief loans can be difficult to arrange

    Highly personalized service

    Terms changed by the lender after application

    Efficient application process

    Some lenders have high fees

    Conclusion

    While Fundera might not be the biggest player in the market, it certainly makes up for it by offering an impressive range of loan types with efficient and friendly service. It welcomes applications from long-standing businesses, new startups, and those with bad credit, and there’s an excellent chance you’ll find what you’re looking for here. 

    Frequently Asked Questions (FAQ)

    Does Fundera check credit?

    It conducts one soft credit pull to complete your application. Once you accept an offer, some lending partners might do a hard credit pull, but you’ll be notified about it in advance.

    What is Fundera’s average time to approve applications?

    Applications are typically approved within 24 hours. The next step is up to you. After reviewing loan offers, you’ll need to decide which one is the most affordable.

    What’s Fundera’s interest rate?

    Fundera doesn’t set interest rates. The lending partner you choose sets the interest rate depending on your credit history and market conditions.

    How long does Fundera take to process funds?

    The length of time it takes before the funds are in your account depends on the loan type you choose. In most cases, it takes one day to three weeks. SBA loans and asset-lending products take longer to process.