National Funding Review

National Funding is a terrific lender for small businesses seeking quick, hassle-free financing. The private lender has been in business since 1999 and has disbursed more than $4.5 billion in capital to over 75,000 small businesses nationwide. National Funding offers multiple loan products, including working capital loans, small business loans, short-term business loans, and equipment financing. 

The lender also serves numerous industries, including commercial trucking, agriculture, construction, and restaurants. Specifically, businesses with bad credit prefer National Funding for its relatively lenient qualification requirements. 

However, how does National Funding fare compared to other similar lenders? We’ve created this review to help you determine if this lender can satisfy your funding needs. 

National Funding logo

National Funding Compared 

National Funding wasn’t on our top list of best startup business loans. However, the lender fared much better when we tested the best merchant cash advance services. As a result, we ranked National Funding as the best merchant cash advance service for long-term funding. 

If you’re looking for a startup business loan, consider choosing Upstart or Fundera. Upstart offers quick personal and business loans to businesses with no credit history. Check your rate for free on Upstart with no hit to your credit score. Or, if you’re looking to compare small business loans, Fundera is a loan marketplace with dozens of lenders in its network. Fill out one application, and Fundera will match you with multiple lenders to find the best terms

Read more about our top picks for the best startup business loans and see which is best for you.

About National Funding 

National Funding specializes in working capital loans and equipment financing. However, small businesses looking for alternative funding options are still welcome. The lender also offers small business loans, short-term loans, and merchant cash advances. 

National Funding also provides loans specific to underserved businesses. These include business loans for women, minorities, and veterans. The lender also has several partner programs, including the affiliate & referral program, strategic partner program, equipment vendor program, and broker services program. 

National Funding Health and Stability 

National Funding is one of the private lending pioneers with a decades-long track record of serving small businesses in most industries. The company was founded in 1999 and has since expanded from working capital loans to include bridge loans, credit loans, equipment leasing, merchant cash advances, unsecured loans, and credit card processing. 

National Funding is also a corporate product sponsor of California sports teams, including the San Diego Padres and USC Trojans. Some of the lender’s investors include Wells Fargo Capital Finance and CapitalSource. The alternative lender has served over 75,000 businesses and isn’t expected to stop soon. 

National Funding also recently made a strategic growth investment in Finova Capital, a merchant finance partner with decades of experience. Finova Capital is best known for its point of sale (POS) equipment financing solutions, merchant cash advances, term loans, and working capital loans. This partnership is expected to grow National Funding’s reach and financial services. 

National Funding Pricing 

National Funding doesn’t openly advertise how much its loans cost. You’ll need to apply for a loan and receive an offer to get the exact quote. However, you can always decline the loan offer if you’re unhappy with the terms. 

The specific interest rate depends on your credit score and other financial data. The lender also charges interest based on the type of loan. This can be simple interest for equipment financing or a factor rate for small business loans. 

National Funding Pricing Structure 

The cost of a National Funding loan largely depends on the type of loan. The interest rate may vary depending on your credit score and other financial data. However, your repayment options are limited to daily or weekly payments. 

National Funding charges a factor rate for its small business loans. Term lengths vary between 4 to 24 months. Frustratingly, the lender doesn’t advertise the specific factor rate. But, a little digging shows you can expect a factor rate between 1.10 and 1.17 for small business loans. But, again, the factor rate varies depending on the loan’s terms. The lender also charges an origination fee for its small business loans. 

The lender also charges a fixed simple interest rate for equipment financing. The interest rates start at 4.99%, depending on the terms of your loan. However, the interest rate varies between 15% ad 30% for most loans. You can also expect an origination fee between 1 and 3% of the total loan amount. The loan terms vary between two and five years. 

Finally, National Funding doesn’t charge interest on its merchant cash advances. Instead, you pay a set percentage of your credit card sales. There’s no deadline to repay the loan. The lender charges its fee until the loan is repaid. 

National Funding Pricing Comparison 

National Funding is far from the cheapest lender on the market. There are some great alternatives if you prefer to price shop before applying for a loan. Plus, most lenders are more transparent than National Funding, making it easier to find a fair deal. 

For example, Upstart offers multiple loans, including credit card repayment, debt consolidation, and car refinancing loans. And you can calculate your interest rate before applying for the loan without affecting your credit score. Most Upstart loans have an APR of 25.05% with 60 monthly payments. 

Similarly, Fundera is open about its interest rates and additional charges. The loan marketplace lets you compare rates from different lenders. You only need to fill out one application, and Fundera will connect you with multiple potential lenders to compare interest rates. Again, you’ll find out how much interest you will pay before applying for the loan. 

National Funding Trials and Guarantees 

National Funding doesn’t charge a prepayment penalty. Instead, the lender rewards you for paying early. For example, you can save 7% of your remaining short-term loan balance if you repay within the first 100 days of receiving the loan. Similarly, when you pay the loan early, you get a 6% discount on the remaining equipment loan balance. 

You can also apply for a National Funding loan without impacting your credit score. There’s also no commitment required when you apply for the loan. You can reject the terms with no additional fee. 

Finally, National Funding also provides a loan specialist to help you understand your loan options. Again, this service is free. The Funding Specialist will also help you customize your loan to get the best interest rate and repayment terms the lender can offer. 

National Funding Startup Business Loans Review 

Startups have a notoriously difficult time accessing funding. But, if you’re a startup with at least one year in business, you may qualify for a National Funding small businesses loan. In addition, startups with at least six months in business may be eligible for equipment loans from National Funding. 

Although National Funding didn’t make it on our list of the best startup loans, it might still be an option worth exploring. Here’s what makes National Funding a good or bad lender for funding your startup.

What Makes National Funding Startup Loans Great 

Screenshot of the National Funding homepage
National Funding has some of the lowest qualification requirements for an alternative lender.

Easier to Qualify than Bank Loans: National Funding has some of the lowest qualification requirements for an alternative lender. Its qualification criteria are certainly more lenient than traditional banks. For example, you can qualify for a small business loan with a credit score as low as 500 and only one year in business. 

Similarly, equipment financing loans have a minimum credit score requirement of 575. You can also qualify for the loan with just six months in business. Some startups easily meet the qualification criteria. 

Customized Loan Options: National Funding understands that business funding isn’t a one-size-fits-all affair. Therefore, the lender offers customized loan options to fit your specific funding requirements. This way, you’re guaranteed the type of funding that solves your unique cash flow or investment problems. 

The lender also puts you in touch with a Funding Specialist. There’s no guesswork since the advisor helps you during every step of the application process. The financial advisor will also help you find the best funding option for you. 

Quick Funding Times: This lender has short funding times, a lifeline for businesses needing immediate cash injection. The application takes only a few minutes. Plus, you can receive funding in as little as 24 hours after approval. 

You don’t have to wait long for approval, either. You’ll receive a call from the Funding Specialist within 24 hours of your application. This means you can receive funding in as little as two business days after submitting your application. 

Potential Tax Benefits: You may be able to deduct the total price of qualifying equipment from your tax returns. This benefit is subject to the terms of Section 179 Tax Deduction. In addition, you may be able to deduct up to 100% of purchased or leased equipment up to $1,080,000. 

You can contact a National Funding advisor or a tax professional to determine your qualifications. 

Simple Application Process: The National Funding application process is quick and straightforward. To begin the underwriting process, you only need to complete a one-page online application. Then, the lender does a soft credit pull that doesn’t affect your personal credit score. 

You’ll be asked to submit documentation such as bank statements if you qualify. Again, you’ll be in touch with a financial advisor to help you through the process. The underwriting process is fast and smooth if you have the necessary documentation in order. 

Prepayment Incentives: National Funding offers prepayment incentives where most alternative lenders impose a prepayment penalty. You can save up to 7% of your remaining loan balance if you repay your loan in 100 calendar days. 

Where National Funding Startup Loans Falls Short 

Screenshot of National Funding advantage, including no-risk application, fast and easy process, and personalized service
The National Funding application process is quick and straightforward.

Opaque Pricing: The most frustrating aspect of National Funding is its opaque pricing. You have no idea how much interest, origination fees, or extra costs you’ll pay until you apply for the loan. That means you might waste time applying for a loan you cannot accept. 

Short Repayment Schedule: National Funding only supports daily and weekly payments. There’s no option for monthly payments. Regular payments may be a problem for startups with irregular cash flow. 

Therefore, National Funding may not be the best option for a startup. Most competitors offer at least weekly or monthly payment options. 

High-Interest Rates: The fact that National Funding isn’t transparent about its interest rates and fees is telling. The lender charges higher interest than most competitors. You can also expect extra costs like origination fees. Although these fees are standard, it makes the loan more expensive, considering the higher interest rates. 

National Funding Startup Business Loans Compared

National Funding wasn’t on our top list of best startup business loans, but it is still a strong loan option. To get more information about our top startup loans, check out these top-rated companies: 

National Funding Merchant Cash Advance Review 

National Funding fares much better when you consider its merchant cash advance services. The lender recently shifted its focus to short-term, working capital, and equipment financing loans. However, it offers some of the best merchant cash advance services, especially if you’re looking for long-term financing. 

National Funding charges a small percentage of your credit card sales until you repay the loan. That means there are no checks or invoices. Instead, the payments are automatic and fixed for your loan term so you can manage your cash flow effectively. 

The are also no restrictions on how you can spend the money and no prepayment penalties, collateral, or fixed payback deadline. Again, a Funding Specialist will help you create custom loan terms suitable for your specific business. 

Finally, National Funding has lenient qualification criteria for its merchant cash advances. You need at least one year in business and at least $3,000 in monthly credit card transactions. Plus, you can receive funds directly to your bank account within 24 hours after approval. 

This merchant cash advance product is most suitable for businesses looking for long-term financing. There’s no fixed deadline for repaying the loan. And you can work with the Funding Specialist to set a reasonable rate. 

National Funding Merchant Cash Advance Compared 

National Funding offers long-term cash advances for small businesses struggling with cash flow. It’s also a terrific choice for its lenient qualification requirements. However, there are other equally good options. 

Here’s a quick look at how National Funding compares to the top merchant cash advance services

National Funding Business Loans Review 

National Funding offers three primary business loans: small business loans, equipment financing, and merchant cash advance services. You’ll need to look elsewhere if you need additional financing options. 

Most small businesses may find National Funding loan offering limited. For example, National Funding doesn’t offer SBA-backed loans. Similarly, the lender doesn’t service invoice factoring, business line of credit, and long-term loans. 

Additionally, National Funding is opaque concerning the actual cost of its loans. You’ll have to go through the application process before you find out how much you’ll need to pay. Other lenders are more transparent. 

Finally, National Funding business loans are more expensive than most competitors. You may want to price-shop before you decide this is the right lender for you. National Funding may still be a good option if you don’t qualify for traditional term loans or alternative funding. 

National Funding Business Loans Compared 

National Funding offers small business loans up to $500,000 with quick funding times. Similarly, you can get an equipment financing loan of up to $150,000 with no annual revenue requirements. However, these loan options are limited compared to other lenders. 

Here’s a quick overview of the best business loans

  • Bluevine — Best for established businesses seeking lines of credit up to $250,000 
  • Lendio — Best small business loan marketplace with 75+ lenders 
  • OnDeck — Term loans and lines of credit for business owners with a 600+ FICO score 
  • Fundbox — Best for new businesses in need of inventory or supplies from vendors 
  • Funding Circle — Best small business lender with loan terms up to five years 
  • Kabbage — Best for businesses with low monthly or annual revenue 
  • Lending Club — Best P2P lending marketplace for business loans 
  • Kiva — Microloans up to $10,000 at 0% interest for entrepreneurs 
  • SmartBiz — Best for SBA loans up to $5 million with 25-year terms 
  • Credibly Capital — Bank-backed loans for business owners with great credit 
  • CAN Capital — Best merchant cash advance for small businesses 

Final Verdict 

National Funding is a terrific option for small businesses with less-than-stellar credit. You can qualify for a loan with credit scores as low as 500 and just six months in business. In addition, the lender has a quick funding time, perfect for companies that need working capital quickly.

However, there are pitfalls to be aware of. First, National Funding charges higher interest and additional fees than many alternative lenders. So, be sure to price shop for your loans before committing to financing from National Funding. 

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