Fundation is an online direct lender offering simple interest small business loans to companies through a technology driven process.
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Fundation is a lender that can be seen as an alternative to the traditional loan process. They look to provide faster funding than a normal bank, without having the normal application procedure. It is through small yet noticeable differences that Fundation looks to separate themselves from traditional bank based lenders and other online sources.
|Exceptional customer service.||Interest rates that are higher than those of an SBA or bank loan.|
|Funds are generally received in a week or less.||High qualification threshold.|
|No prepayment penalty.||Not ideal for smaller businesses or fresh start ups.|
|Potential to save money by paying off your loan faster.|
Fundation offers two types of loans: working capital loans and business expansion loans. In order to qualify for a loan from Fundation you would need to have been in business for at least two years, possess a credit score of at least 600 and bring in yearly revenue of at least $100,000.
As stated on the Fundation site, here are the terms and fees associated with their loan offerings.
|Borrowing Amount||$20,000 - $500,000|
|Term Length||1 - 4 years|
|Origination Fee||Between 2% - 3%|
|APR||Between 7.99% - 29.99%|
|Collateral||Personal guarantee, UCC-1 Lien|
Payments are automatically wired from your business account twice a month to cover your loan. The Fundation website compares their loan offerings to generic banks. The website also makes clear who is providing the funds for the loans as it displays the investment groups involved with Fundation.
Once thing the website does not specify is the difference between the two loan offerings Fundation has: the working capital loan and the business expansion loan. Both loan types are fixed rate, meaning the interest will not fluctuate over the life of the loan.
A working capital loan is a shorter term loan (term length of 1 - 2 years) with a maximum borrowing amount of $150,000.
A business expansion loan is a longer term loan (term length of 2 - 4 years) with a maximum borrowing amount of $500,000.
Fundation makes sure to give you comparisons to other online lenders and traditional banks to show you the difference in their offerings. Being an online lender themselves, once you have made the decision to apply you will do so through their website.
When selecting the “Loans” selection through the navigation bar you will be taken to a comprehensive list of Fundation’s offering. The explanation is all inclusive, coupling together the short term working capital loans with the longer term business growth loans, and giving a broad explanation of how their loans work altogether.
In the comparisons Fundation makes towards its competition (traditional banks and other online lenders) it makes clear distinctions to why you would choose one over the other. For instance, where Fundation allows for payments twice a month a traditional bank only takes payment once a month. This wouldn’t be such a difference if traditional banks didn’t normally have prepayment penalties attached to their payment plans. Fundation allows for early payment, which in turn allows you to pay more of your principal amount owed and less interest.
In regards to the comparisons with other online lenders, Fundation has two distinct advantages over other online lenders. First, the loans that Fundation offers are conventional term loans, which means the interest amount charged on each payment fluctuates when the total amount goes down. Other lenders charge the same fee on each payment regardless of how much you’ve paid.
Secondly, many online lenders require that you make daily payments to your loan regardless of the day or how much you’ve earned business-wise. With Fundation, you don’t make daily payments. Instead, you make payments only twice a month, allowing you the ability to keep more of your daily income and focus on business over paying back your loan.
Once you decide to apply for a loan with Fundation, you go through a pretty standard information gathering period, beginning with their online application. In order to know how strong your business is Fundation will require some very specific information. This can involve bank statements and business tax returns. The best thing about this level of information gathering with Fundation is that they have the ability to gather the information themselves, granted that they have your permission to do so.
A benefit that more lenders could follow suit in is Fundation’s willingness to divulge stats about businesses and their relation to their success rating (in relation to loan payments). There are many guidelines that make up a business, and these guidelines impact each business in various ways. Fundation can statistically break down these points and let you know what to look out for from a logistic standpoint.
You have the ability to check your account online at any time to know where your payment progress is. Fundation gives you the ability to download your transaction history at any time. They offer a refinancing option should you need more funds in the future. There are no prepayment fees either.
Fundation has a customer service reputation of being educational as well as helpful towards its clients. Customer service representatives take the time to explain anything you have a question for. This would be the main go to for those who are already clients of Fundation.
The website features a frequently asked questions section that does harbor some helpful information. However, the main gripe with the FAQ is that it doesn’t provide much information for those who are already clients of Fundation. The FAQ answers common questions, not unlike the ones that you would ask if you had no knowledge of the company or its practices. An online database of some sort would be welcome here, catering to borrowers when they can’t wait for a phoned in answer.