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National Funding Review: Pros, Cons, & How to Apply

Small business owners have many options for financing and fast funding thanks to the increase in alternative online lenders. One of the original alternative lenders, National Funding, is still one of the best options available.

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National Funding specializes in quick and easy applications with a fast turnaround time on receiving your funds. The lender’s business loans can finance just about any business need.

However, the cost of financing and borrower requirements mean that National Funding might not be the right fit for every small business. How can you decide if National Funding is the right lender for your company?

This review will cover how National Funding loans work, the benefits and drawbacks of the lender, and how to apply to help you determine if it’s the right move for your business. Specifically, we will answer these questions and more:

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    What is National Funding?

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    National Funding is one of the leading online business lending platforms available. Based out of San Diego, CA, the company launched in 1999 and has since disbursed over $4.5 billion in funding to over 75,000 small businesses.

    The company was one of the original pioneers in the alternative lending space. Its mission is to help small businesses succeed when they can’t get traditional business loans from a bank.

    The lender provides an easy online application and can fund loans as soon as 24 hours after approval. Small business owners can get a loan of up to $500,000 for a wide range of business needs. It provides working capital loans and equipment financing.

    National Funding provides business finance to most industries but specifically targets the following sectors:

    In addition, National Funding provides loan services for special interest groups such as women-, veterans-, and minority-owned businesses.

    How do National Funding business loans work?

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    Initially, National Funding provided merchant cash advances but has since moved into more stable small business loan structures. Today it offers a term loan, which you can use as a short-term loan or working capital, and equipment financing.

    Term Loans

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    National Funding’s term loans range from $5,000 to $500,000. The working capital loan carries terms of up to 24 months. The short-term loan only goes up to 18 months. Both versions of the term loan require daily or weekly repayments.

    Working capital and short-term loans are available in all 50 states. Loan funds can get deposited into your account in as little as 24 hours after approval.

    Business owners can use the funds from either loan structure for most business purposes, including:

    • Hiring more staff.
    • Buying inventory.
    • Managing cash flow.
    • Making payroll.
    • Paying rent.
    • Cash reserves.
    • And more.

    Equipment Financing

    National Funding also provides an equipment financing loan or equipment leasing. Borrowers can get up to $150,000 for needed business equipment. Terms range from 2-6 years and require monthly payments.

    When applying, you will need an invoice or official quote from the equipment vendor. Like the term loan, equipment financing funds can be disbursed within 24 hours of approval.

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    National Funding finances both new and used equipment. Small business owners can use the funds to acquire a wide range of equipment, including:

    What are the costs of National Funding loans?

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    The costs of National Funding’s business loans include both interest and fees.

    Interest Rates

    National Funding charges a flat factor rate instead of an APR for the term loan. Factor rates start at 1.10. To calculate your interest, you’d multiply the loan amount by the factor rate. So, if you borrowed $50,000 at a 1.10 factor rate, the total repayment amount would be $55,000. That means you’d pay $5,000 in interest.

    Equipment financing uses an APR. Rates start at 4.99%, but National Funding does not publish the upper limit of interest rates for equipment financing.


    Nation Funding charges an origination fee for their term loan and equipment financing products. The fee is between 1%-2% of the loan amount. Additional fees may apply on a case-by-case basis.

    How do you qualify for National Funding?

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    Like many online lenders, National Funding weighs your business’s finances more heavily than traditional qualifications. Your business needs a minimum of $250,000 in annual revenue for all National Funding financing products.

    Businesses must also have been in operation for at least six months. It’s recommended that you have a credit score of 600 for the term loan products. For equipment financing, you’ll need a minimum personal credit score of 650.

    Meeting the minimum requirements for annual revenue, time in business, and credit score won’t guarantee approval, but you’ll be eligible for funding in most cases. National Funding also examines your cash flow to ensure your ability to repay.

    For National Funding, You Need to Know:

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    The term loans are unsecured, meaning you won’t have to provide collateral. However, you will need to sign a personal guarantee. A personal guarantee is essentially a promise to repay the loan. If you default, the lender can go after personal assets to recoup its losses. National Funding might also file a UCC lien against your assets.

    With equipment financing options, the asset you’re acquiring with the loan becomes the collateral. This is known as a self-collateralizing loan. You might be familiar with other self-collateralizing loans, such as auto loans or mortgages.

    National Funding borrowing costs are competitive with similar lenders but more expensive than traditional business loans. Using a factor rate makes it difficult to compare costs with conventional long-term loans.

    For equipment leasing, National Funding offers a “Guaranteed Lowest Payment.” If you can find a lower lease payment, the lender will give you $1,000. There are some restrictions to the guarantee, however. The lease comparison must be for equipment over $10,000 in value, have the same terms, and the lease quote must be within seven days of receiving National Funding’s quote.

    You can give the equipment back or renew the lease at the end of the lease term. In some cases, you might have the option to purchase the equipment at fair market value.

    The lender’s website does not mention if it reports to any credit bureaus. As far as our research can tell, they do not report your on-time payments. However, the website does say that a National Funding loan can help improve your credit, but it does not specify how that works.

    While the lender provides funding to businesses nationwide, small business owners in the San Diego region might be interested in the company’s sponsorship of local teams. National Funding is an official sponsor of the San Diego Padres, Anaheim Ducks, and SC Athletics.

    The lender used to offer a merchant cash advance product but has shifted its business funding efforts to equipment financing loans and short-term business loans. Nation Funding restricts specific industries. Ineligible companies include airports, art galleries, auction houses, car dealerships, mining, oil, sports clubs, tour guides, and more.

    How to apply for a National Funding business loan:

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    The application process is quick and easy. Follow these steps to apply for a National Funding business loan.

    Step 1: Complete the Online Form

    The first step is to put in your basic business information. You’ll enter your name and contact information and indicate your company’s revenue range.

    For equipment financing, you’ll also need the vendor quote. If you received a National Funding Ignite card offer, you could enter the card information on the application form.

    Step 2: Connect with a Funding Specialist

    One of the lender’s funding specialists will reach out to you after you complete the online application form. They will discuss your financing options and request any required documentation. You should be prepared the provide the following:

    • Business bank account statements for the previous three months.
    • A voided business check.
    • Your driver’s license.

    You might need to provide additional documentation upon request.

    Step 3: Get Funded

    After speaking with the funding specialist and providing any necessary documentation, the loan moves to the underwriting process. If approved, you will receive the funds as early as 24 hours.

    National Funding, Post Funding:

    Term loans are repaid daily or weekly via an automated clearing house (ACH) transfer. You will need enough cash flow to support frequent repayments. Borrowers can get a 7% early payment discount if they pay off the loan within 100 days.

    Equipment financing payments are made monthly, and terms can go up to five years. At any point during the loan, borrowers can get a 6% discount if they pay off the loan early.

    National Funding’s website does not publish information on their loan renewal process. However, several customer reviews indicated that the renewal process is easy if you make regular payments on the current loan. We do not know what percentage of the loan you need to pay down before you’re eligible for renewal.

    What are the advantages of National Funding?

    One of the most significant benefits of National Funding is its easy application. Traditional business loans often require extensive documentation and back and forth with the lender. It can sometimes take days or weeks to finalize a loan application and get approval. National Funding’s convenient online application only takes a few minutes to complete, and the funding specialist usually contacts you on the same day unless you apply after hours.

    The lender also provides fast funding. After approval, you can receive the loan funds in as little as 24 hours. The combination of the quick and easy application and fast funding provides relief to small businesses needing urgent financing.

    National Funding term loans do not require collateral, and the collateral is built into the equipment financing products. So, you won’t have to use any existing business assets as collateral for any financing product you choose. Equipment financing does not require a down payment.

    Another significant advantage to National Funding is that it accepts lower credit scores. The term loan only requires a credit score of 600, and equipment financing only requires a 650 credit score. In addition, you only need six months of business history to qualify. Those requirements help younger businesses and those still building credit to secure financing.

    The early payment discounts also help small business owners save money on financing. If your business has the cash flow to support an early payoff, you can get a greater value on your loan.

    What are the disadvantages of National Funding?

    While the costs are comparable with similar lenders, you’ll still pay more than you would with a traditional loan. The benefit is that you pay off the debt quicker since it’s short-term financing. Also, the higher cost could be worth it if you need the money urgently and can’t wait for a traditional business loan to go through.

    Since term loan products are short-term financing, you must make daily or weekly repayments. Some businesses struggle with the frequent repayment structure.

    While the time in business and credit score requirements are more lenient than most lenders, you still need $250k in annual revenue to qualify. The revenue requirement will exclude some small businesses.

    Equipment financing through National Funding only goes up to $150,000. That amount can finance most business equipment but won’t be enough for larger pieces. For comparison, some lenders provide up to $5 million per piece of equipment.

    National Funding Loan Pros & Cons

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    • Quick & easy application process.
    • Fast funding – available in as little as 24 hours after approval.
    • No collateral is required for term loans.
    • No down payment is required for equipment financing.
    • Accepts poor credit scores.
    • Early payment discounts can help save on the cost of financing.


    • Term loans require daily or weekly payments.
    • Charges an origination fee.
    • High annual revenue requirement – minimum of $250k.
    • Costs are higher than traditional small business loans.
    • Equipment financing only goes up to $150,000.

    Apply for business funding through United Capital Source today.

    Is National Funding Legit?

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    Yes, National Funding is a legitimate online lender with a good reputation. The company is privately held, and its founder still serves as the CEO.

    The Better Business Bureau has accredited the company since 2013, where it has an A+ rating. National Funding also has a 4.8 out of 5 rating on TrustPilot.

    What do National Funding Reviews typically focus on?

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    Any lender that’s been around as long as National Funding has is bound to have a mix of positive and negative reviews. While there are negative reviews for the lender, most are positive.

    Good reviews tend to discuss the ease and speed of getting business financing. This includes the fact that the lender accepts lower credit scores.

    Many reviews praise the customer service, with multiple customers mentioning their funding specialist by name. National Funding’s personal touch resonates with many borrowers. Several reviews mentioned how easy the renewal process was.

    Negative reviews largely discuss the cost of financing. Short-term loans usually carry higher interest and fees, but borrowers unfamiliar with this form of funding expressed being shocked at how much they had to pay.

    Some users complained they could not reach customer service in a timely manner, but these reviews are far less than the positive reviews that praise the customer service.

    Other negative reviews complain about aggressive sales tactics, such as sending unsolicited marketing offers in the mail or follow-up phone calls to try to get a loan application. One customer claimed they were misled about the loan being used to build credit.

    What is National Funding Ignite?

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    The National Funding Ignite card is a special promotional card sent to some small business owners. If you received an Ignite card, you could enter the card information on National Funding’s website to see your loan offers. Ignite is not a business credit card.

    What if National Funding denies my loan application?

    National Funding’s approval process is more flexible than some lenders, but that doesn’t mean you will be approved. Some customers mentioned receiving a pre-eligibility offer but still being denied after applying.

    You might be denied if you don’t meet the lender’s requirements for minimum credit score, time in business, or annual revenue. Other reasons a loan might be denied are if there are cash flow issues that could affect repayment or if your business is in a high-risk industry.

    If you applied and received a denial letter, it should explain why the loan request was rejected. If not, or if you need more information, you can contact National Funding to discuss it further. The company does not publish information on how soon you can reapply after being denied.

    Fortunately, there are plenty of lenders to consider if National Funding doesn’t work for your business. You can find other lenders that offer working capital loans or equipment financing.

    You might also be interested in other small business loans, such as:

    Making Your Decision

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    National Funding is an excellent fit for small businesses that have high annual revenue but need business financing fast. The cost might be higher than a traditional business loan, but avoiding the headache of a business bank loan application and getting the money sooner might offset the cost. Time is money, after all.

    Companies that earn less than $250,000 or have cash flow issues won’t qualify for National Funding. Also, if you have a high credit score and can afford to wait the time it takes to secure a long-term loan, you could probably find a lower-cost lending option. That being said, if you’re committed to getting a loan from an alternative lender, few can match National Funding’s service and reputation.

    Based on the application process, funding time, and customer reviews, we rate National Funding at 4.5 out of 5. As one of the original pioneers in alternative online business lending, it remains one of the top options available.

    Apply for business funding through United Capital Source today.

    Why Choose United Capital Source?

    Why businesses choose UCS:

    Quick funding options that won’t affect credit
    Access to 75+ lenders with multiple products to choose from
    Financing up to $5 million in as few as 3 days
    1500+ 5 star reviews from happy clients!

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