Fundation Review: Term Loans & Lines of Credit for Established Businesses

Fundation Review: Term Loans & Lines of Credit for Established Businesses
Taylor Gordon
on March 17, 2020
Read in 3 min

If your business is in need of funding, this Fundation review is one you should read.

Fundation provides term loans and lines of credit for fairly established businesses at competitive rates.

And for what it’s worth, they were awarded the Best Alternative Lender for Working Capital Loans by Business News Daily in January 2018, May 2016, and October 2015.

Here’s a few things you should know before you consider applying for their funding products:

Fundation Loans Review

Fundation is an alternative lender that offers loans to small businesses and partners with banks to improve lending processes.

The application for a term loan or line of credit is done entirely online, but you can also get a dedicated customer service professional to help you through it over the phone.

Interest rates for term loans and lines of credit range from 7.99% to 29.99% APR.

With a simple underwriting process and low fees, this is a lender to consider if you’ve had trouble getting approved for a loan at a bank in the past.

Fundation Term Loans

Term loan amounts are available from $20,000 to $500,000 with repayment timelines ranging from 1 to 4 years.

If approved for a loan, you’ll have to make payments twice per month.

The origination fee is 5% and deducted from your net proceeds, so be sure to factor that in to the total loan amount you’re requesting.

Fundation Lines of Credit

Lines of credit range from $20,000 to $100,000 and your balance after each withdrawal is amortized in equal installments over 18 months.

Making payments on your line of credit can be easy because it’s only once per month, but the lines of credit do have some hefty fees.

The cost to close your credit line is $500 and there’s a 2% fee every time you make a draw.

But at least you rest easy knowing you can pay off your loan or line of credit early without a prepayment penalty.

How to Qualify

Business owners can use term loans for expansion, equipment, and capital improvements.

Lines of credit could provide quick access to working capital and help resolve short-term cash flow issues.

The industry your business is in doesn’t matter, but you do have to meet some minimum eligibility requirements.

  • Have at least one year in business
  • Have at least three employees
  • Have at least $100,000 of annual revenue
  • Have good personal credit of 600 or above
  • No specific collateral is required, but a personal guarantee is necessary
  • A lien on business assets is required

Based on their requirements, these loan products may be best suited for seasoned businesses with a decent amount of revenue.

Fundation reviews your business operations including cash flow, public records, profit margins, and historical growth before approving you.

Another thing to keep in mind is that the above qualifications are just the bare minimum required.

According to Fundation, their typical borrower has a credit score in-between 680 and 700, with 5 to 10 years in business, and revenue of $250,000 to $750,000.

The Application Process

Their online application portal is convenient enough to get started on your own.

  1. You input basic information. Your personal credit will be pulled and must meet the minimum eligibility requirements to proceed. Otherwise, your request can be rejected. This is where the hard credit pull happens.
  2. Underwriting & analysis. You also get access to a customer portal which gives you real-time updates on your application progress so you can see whether you’re shaping up to be a good candidate for them.
  3. Submit documents. You may need to produce bank statements, company financials, tax returns, and more.
  4. A customer relationship manager may reach out to you. Your dedicated customer service professional may call if there are any red flags in your application. During this phone call, you can discuss terms of your agreement.
  5. Funds can be dispersed within a few days. If you are approved, money may be deposited as fast as one to three days. The speed at which you can get money depends largely on how quickly you complete the application and turn in documents required for approval.

All business owners going through the application process are linked to a customer relationship manager.

Your customer relationship manager acts as your mentor and guide even when managing the repayment of the business loan…

They can help you apply to refinance your loan after you’ve established a solid payment history.

Fundation Review of Benefits

Fundation loans may be available for several uses such as growing your business or improving cash flow.

They offer a dedicated customer service representative for all people who obtain a loan, which is convenient since loan management happens remotely.

Fundation takes a look at the big picture of your business and personal credit during underwriting.

The minimum credit score requirement is 600, so you may be able to get approved with just fair personal credit.

Fundation Review of Drawbacks

Business owners who obtain loans via Fundation will have to make semi-monthly repayments.

In other words, two installments have to be paid per month throughout the repayment period.

This may or may not be a pitfall for you depending on your situation.

Their minimum requirements are less about credit score and more about proving your business model works.

With that in mind, you won’t be eligible for this loan if your annual revenue is under $100,000 or you have fewer than 3 employees.

Since the average Fundation borrower brings in even more than this in revenue, businesses that only meet the bare minimum still may not qualify.

Fundation Review – The Final Word

If you’re running a business that’s past its infancy stage, Fundation is worth checking out.

On the other hand, there’s plenty of proverbial fish in the sea.

Wondering where to begin? Get started with LendGenius’ simple online form:

How to Get a Small Business Loan - LendGenius

See Business Lenders

Taylor Gordon Finance Journalist

Taylor K. Gordon is a personal finance writer and founder of Tay Talks Money, a frugal lifestyle blog on entrepreneurship and hacking your way to an abundant savings account.

Taylor has contributed to The Huffington Post, GoGirl Finance, Madame Noire, The Write Life, and more.