National Funding Review: Rates, Fees, & Eligibility Discovered

National Funding has been providing business loans since 1999. Since that time, it has provided over $2.5 billion in capital to over 40,000 businesses across the US.

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    Financially Reviewed by Gordon Scott

    National Funding is a California-based, small business loan specialist that focuses on helping those with bad credit and has been offering financial services since 1999. The platform has fairly generous eligibility criteria, and is a trusted name in the industry. Plus, it’s known for being able to approve loans and disburse funding incredibly quickly, often having the cash in customer’s accounts the next day. Its services are primarily aimed at small businesses that need short-term loans to cover cash flow issues. 

    What Is National Funding?

    Funding options are kept pretty simple here with just three types of loan on offer; term loans, bad credit loans and equipment leasing. You won’t pay compounding interest rates on a National Funding Loan. That’s because its products establish a fixed fee structure using factor rates. This means you’ll be charged a fixed percentage, usually between 17%-36%, of your total loan value, which is then spread over the full duration. 

    While this might sound a little higher than other lending platforms, there is a simple explanation for that. These loans are intended for those with poor credit and are scheduled to be paid off within 18 months. This makes it a great choice for anyone that’s looking to build their credit scores or those that need fast injections of cash based on lenient requirements. 

    Advantages and Disadvantages of a National Funding Business Loan

    National Funding Advantages

    • Fast funding - The application process is quick, and you could have your hands on a National Funding loan in just one business day
    • Lenient qualification requirements - You only need to have $1,500 in the bank to apply and have a turnover of $100,000 per year, which is very lenient in comparison to other lenders
    • Those with bad credit can apply - You’ll need a minimum score of just 500 to apply. Plus, you can borrow smaller amounts of just $5,000 to build your score
    • Early payment discounts - If you’re able to repay your loan early you’ll receive significant discounts on your factor rate
    • No collateral needed - You don’t need to put up any assets to secure your loan, meaning your business is safe
    • Minimal paperwork - You only need to provide some basic business information to apply

    Disadvantages

    • Factor rates can be expensive - Fees start from 17% of your total loan value, meaning if you borrow $10,000, you’ll pay a $1,700 charge
    • Some additional fees may be charged - In most cases, you’ll need to pay an additional origination fee
    • Frequent repayments - Since all loans are short term, you’ll need to repay either daily or weekly

    National Funding Loan Features

    With just three loan options to pick from at National Funding, you don’t need to worry about complicated options or confusing contracts. The primary focus here is on getting funding to you quickly, and helping those with bad credit. As a result, rates may be a little high, but you have a better chance of being approved. 

    Small Business Loans

    This is a fairly standard term loan that’ll be repaid monthly. It’s an option for those that have better credit scores, so naturally the better your the more you can expect to see improved rates. As final terms will be determined by a number of different factors, it’s difficult to know exactly what terms or loan amount you’ll be offered until you apply.

    Loan Type

    Small business loans

    Term length

    Not disclosed

    Repayment period

    Monthly

    APR range

    Not disclosed

    Min - Max amount

    $5,000 - $500,000

    Business Loans for Bad Credit

    While this type of loan has lower eligibility criteria, it comes with fairly high interest rates and short repayment terms. This is done in order to reduce the level of risk on the lender. We’d recommend starting out with a small amount you’re sure you can repay. Not only will this help with financial planning, but you’ll also have a chance to boost your credit score in the process. 

    Loan Type

    Business loans for bad credit

    Term length

    6 to 15 months

    Repayment period

    Monthly

    APR range

    Factor rates starting from 1.17

    Min - Max amount

    $5,000 - $500,000

    Equipment Financing and Leasing

    This type of loan is intended to be used for the purchase of a specific piece of equipment. While borrowing amounts are lower, you’ll find more favorable rates and terms as the asset will be used to secure your loan. This is less of a risk for National Funding to take on. However, you’ll need to provide evidence you’ve bought the kit, such as a purchase order. 

    Loan Type

    Equipment financing and leasing

    Term length

    2 to 5 years

    Repayment period

    Monthly

    APR range

    Not disclosed

    Min - Max amount

    Up to $150,000

    National Funding Interest Rates and Fees

    As a bad credit lender, you can expect some fairly steep fees, especially on the short-term, bad-credit options. Make sure you factor this into your budget and read your loan agreement thoroughly before you sign up to ensure you’ll be able to meet the payments. However, the platform doesn’t disclose other fees until you apply.  

    Small Business Loan

    Loan type

    Small business loan

    Origination fees

    Not disclosed

    Prepayment fees

    Not disclosed

    Late payment fees

    Not disclosed

    Maintenance fees

    Not disclosed

    Interest rates

    Not disclosed

    Business Loan for Bad Credit

    Loan type

    Small business loan

    Origination fees

    2% plus a one-time fee of between 17% - 36% of the loan total

    Prepayment fees

    Not disclosed

    Late payment fees

    Not disclosed

    Maintenance fees

    Not disclosed

    Interest rates

    Factor rates starting from 1.17

    Equipment Financing and Leasing

    Loan type

    Small business loan

    Origination fees

    Not disclosed

    Prepayment fees

    Not disclosed

    Late payment fees

    Not disclosed

    Maintenance fees

    Not disclosed

    Interest rates

    Not disclosed

    How to Qualify for a National Funding Loan

    National Funding has a high acceptance rate, and welcomes those with credit scores of 500 and above--which is lower than most other loan providers. In addition, you’ll need to have an annual income of $100,000 and have at least $1,500 in the bank. Bear in mind that if you have a bankruptcy on your record within the last 12 months, you won’t be able to apply. 

    Beyond these criteria, the platform is actually very lenient and takes into account multiple different factors when determining your eligibility. You’ll be assigned a dedicated loan specialist when you apply that’ll walk you through the process and give you advice on how to improve your eligibility too. 

    Criteria

    All loan Types

    Minimum credit score

    500+

    Minimum annual revenue

    $100,000

    Minimum time in business

    12 months

    The National Funding Application Process

    Applying for a National Funding loan is an incredibly streamlined process. You can either fill in the online application form or call the sales team directly. Either way, the application should only take between five to 10 minutes and you’ll get near-instant pre-approval. In many cases, you can be fully approved the same day and receive your funding the next business day.  

    If you run into any issues you can get in touch with the helpful customer service team. Plus, the service agents can help guide you towards the best offers for you and your business. 

    In addition, 60 days after receiving your funding you’ll be eligible to apply for more. This is a useful option if you’ve underestimated your expenses, or need to make another financial adjustment. 

    To apply you’ll need:

    • A copy of your driver’s license or other photo ID
    • Three months of business bank statements
    • Your most recent tax return
    • Two open trade lines on your personal credit report
    • A voided business check

    However, you should bear in mind that depending on your personal financial circumstances, you may need to provide additional documentation. For example, if you have a particularly poor credit score, you may need to provide more sales figures for your business, or, if you’re purchasing equipment you may need receipts or other evidence that you plan to purchase a specific piece of kit. 

    How Does National Funding Determine the Loan Amount?

    National Funding doesn’t disclose its full methodology for determining your rates and terms. It will, however, be primarily based on your credit score. Additional factors will be taken into account, such as your record of income, tax returns, and general financial health. 

    For those taking out an equipment loan, your terms will be tied directly to the asset you’re buying. This means you’ll receive low rates as long as you put the equipment down as collateral to cover the loan. 

    National Funding has been recognized as one of the fastest-growing small business lenders in the country by both the San Diego Business Journal and Inc. 5000. The company may still be small when compared to the big names in the business, but this California-based organization punches above its weight on the national scale. 

    National Funding Customer Support

    If you have any queries, you can get in touch via a helpline which is open between 7:30 AM to 4:30 PM Pacific Time, Monday through Friday. Or, you can reach out via email. Plus, you’ll be assigned a dedicated loan officer that can deal with any specific loan query you have once you're accepted. 

    National Funding Customer Reviews 

    National Funding has almost 1,400 reviews on TrustPilot with an average rating of 4.6 out of 5. This is quite impressive, especially for a bad credit lender, and is a testament to the platform’s durability and its time in the market.

    A lot of the reviews focus on how helpful the organization is in getting funding to applicants after being rejected by traditional lenders. Others have praised the smooth and intuitive application process and the fact that funding can be arranged so quickly.  

    National Funding is active across social media and regularly engages with customer queries and complaints too. Some users have commented on how high the rates and fees are here, but these are always made clear by the platform before any agreement is signed. For this reason, we’d always recommend having a clear budget and knowing exactly what you can afford each month before you apply.

    The positive reviews are related to

    The negative reviews are related to 

    A quick and easy loan approval process

    High cost of the loan

    Great for those with bad credit

    Expensive fees

    A helpful customer service team

    Some loans seem to take a while to approve

    Conclusion

    If you’ve been struggling with cash flow issues and need funding fast, or you’ve been rejected by other lenders for having bad credit, then applying for a National Funding Loan could be the answer for you. The speedy application process, good customer service, and minimal paperwork requirements make it an attractive option for many small businesses. 

    However, if you’ve got good credit, you might want to try another lender first. Rates can be pretty high here and fees can be expensive. If you’re not careful, you could find yourself taking on a lot more debt than you can afford to repay.

    If you’re worried about high payments, we’d recommend you talk to one of National Funding’s helpful service agents. They can walk you through exactly what sort of fees you can expect, how to budget appropriately, and whether or not these loans are right for you.