National Funding Business Loans: 2024 Review (2024)

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.

National Funding is best for borrowers who:

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.

National Funding loan requirements

To qualify for a business loan from National Funding, you’ll need to meet the following minimum criteria:

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

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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

To qualify for an equipment loan from Triton, you’ll need a minimum credit score of

575

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