National Funding is an online business lender offering two simple loan products. In this National Funding review, we will look at both. Business borrowers with a wide range of credit scores are welcome to apply. They also have a quick application process and offer bad credit loans.
Merchant cash advances (MCAs) give the fastest funds you can get with National Funding. They are fast but repaid daily with high rates. Apart from MCAs, National Funding offers short-term business loans. The terms on these loans are usually less than one year.
Special Qualities & Features
Large Fast Loans
National Funding can quickly get you a loan of up to $500,000. Their business loans cap off at half a million dollars, while their MCAs cap off at $250,000. If you qualify for those amounts, this is one of the fastest ways to get such significant funding.
Easy Application Process
National Funding has a very easy application process. You can apply simply and quickly either online or by phone. Their sales reps are easy to reach, so you can easily skip the online application if you’d rather talk to a person. In either case, you should start ready with bank statements and personal ID.
Pricing & Terms of National Funding
National Funding charges high borrowing fees and all loans are repaid daily. Their pricing is based on a set “factor rate”. So if you get an advance or loan for $100,000, and the factor rate is 1.295, you will payback $129,500 in daily payments (business days only) until repaid. The amount of this daily payment (i.e. a royalty), is usually 10-15% of your historical deposit average, and also determines the term of the deal.
National Funding is one of the best equipment financing companies around, especially for the speed at which they get deals done. Here are the features of their equipment financing:
- Up to $150,000 in equipment leasing
- New or pre-owned equipment
- Wide variety of payment options*
- Exclusive guaranteed lowest payment**
You can learn more here, but be sure to read their legal disclosures regarding the wide variety of payment options and guaranteed lowest payment.
With a National Funding business loan, you can receive funding from $5,000 to $500,000. The term length for a business loan can be between 6 and 15 months.
Every business loan will carry an origination fee of 2% of the borrowing amount. The biggest expense, however, is the borrowing fee. Instead of interest rates, National Funding charges a borrowing fee of 17%-36% of the borrowing amount. You pay off the borrowing fee as you pay back the loan.
National Funding is different from most business lenders in the way they collect repayments on term loans. You pay back the business term loans you take through automated clearing house (ACH) payments. These ACH payments will be a fixed figure that is collected daily, or in some cases, weekly. Pay attention to the borrowing fee to understand the amounts you will be paying in ACH payments.
Merchant Cash Advance
National Funding offers MCAs of up to $250,000.
A National Funding MCA comes with the same origination and borrowing fees as their term loans. The difference is in the repayment method. MCAs are repaid by taking a percentage out of your daily credit card revenues. These rates can wear on your cash flow over time. But they offer you the benefit of not having a set repayment term. Because you’re paying a fixed rate, your rate will fluctuate alongside your revenues. These charges continue until the MCA is paid off.
Learn more: Merchant Cash Advance Loans: The Inner-workings
Do I Qualify?
Qualifying for National Funding is very easy when it comes to credit score requirements. Relative to other online business lenders, their revenue requirements are somewhat high. The only qualifications are:
- At least 12 months in business
- A credit score of at least 500
- Annual revenue of at least $100,000
- For an MCA, at least $3,000 in monthly credit card sales
It should be added that National Funding will even serve borrowers with credit scores as low as 475 for loan renewals.
Factors To Keep In Mind
National Funding offers fast service and low requirements typical of alternative lenders. But they also offer the high rates typical of online lenders. Their daily (or sometimes weekly) repayments can add an especially high level of pressure if you’re not careful.
If you have a high credit score, you will be better served by another lender. The rates National Funding charges are a bit pricey for bad credit loans. But the main drawback is that you simply can’t get single-digit APRs with them, regardless of your credit score or revenue stability. So, you can consider them if you need a fast business loan with bad credit. If you have a higher credit score, you will need to look elsewhere to get the best rates.
Unfortunately, you will not find much useful comparison information on the National Funding website. The company doesn’t share much information on rates overall. However, you can still use the offers they send you and compare them to other offers. Their rates cannot be covered in this National Funding review, unfortunately.
National Funding rewards early repayment with lower rates. Because their rates are high, you should try to save by repaying early whenever you can.
National Funding Review: The Last Word
National Funding is an interesting business lender that offers both extremes typical of online lenders. Their requirements are especially low, their speed is especially fast, but their rates are especially high. So, they offer a good option if you need a fast loan you know you’ll be able to pay off quickly.
If you have a low credit score but know you can pay a loan back quickly, National Funding’s offers were made with you in mind. If you have a good credit score and strong business, you won’t find their offers as attractive.