If you run a business and you’re in the market for outside capital, you may have received a National Funding offer in the mail (perhaps for “up to $300K” with a piece of cardboard that resembles a credit card) or seen an ad online. At first glance, it probably sounds enticing or at least mildly interesting. But, you need to know more before you take a leap and get your company or yourself into the wrong kind of debt.
Here, we’re always on the lookout for small business funding opportunities and want to give you the most honest, unbiased information you can find about your options. While National Funding has been around since 1999, we haven’t done a deep dive analysis on their loans and financing offer… until now. Today, let’s explore everything you need to know about the lender so you can decide if they’re right for you!
Is National Funding legit? Here’s what we’ll cover:
Now, let’s get to it!
What is National Funding?
National Funding, Inc. is a privately-held small business debt-financing lender based in San Diego, California. They’ve been around since 1999 and you’ll find 72 National Funding reviews in a Google search, so they’re reputable. Business owners trust them for what they offer. But, not every lending offer is the right fit for every situation.
At this institution, there are three core funding offers:
- Small business loans
- Business loans for bad credit
- Equipment financing and leasing
When you see a company offering any type of financing for bad credit, it’s wise to be discerning. In fact, I always recommend business owners educate themselves on how to repair their credit before getting into “bad debt” since it’s not as difficult as most people assume.
Who Owns National Funding?
National Funding was founded by Dave Gilbert. Gilbert has been with the company for over 22 years and acts as the present-day CEO.
According to LinkedIn, Gilbert launched the company just two years after graduating from USC Marshall School of Business where he received his BS in Entrepreneurship. He is a financial supporter of several sports-related charities, essentially sponsoring local teams.
Does National Funding Report to Credit Bureaus?
Other than on their blog, National Funding doesn’t mention any credit bureaus on their website. Nor could we find any lendees to tell us whether or not they report. So, as of today, no, National Funding does not report on-time payments (or poor payment history, for that matter) to credit bureaus.
Low-interest, legitimate business credit is typically based on a credit score. Sometimes lenders use a founder’s FICO score while others use a business credit score from a reputable business credit bureau like D&B to determine a business’ creditworthiness. It doesn’t seem like that’s the case with National Funding’s business loans for bad credit.
How to Qualify for a National Funding Loan
If National Fundings’ creditworthiness is not necessarily based on a credit score, it has to be based on something else. You can get business funding in as little as 24 hours after approval with full documentation of three-months’ business bank statements, which will determine your loan amount.
When you apply on the website, you’ll be asked to provide some contact information as well as your annual gross income. If you received an offer in the mail, you’ll be asked to share your invitation number (probably to track marketing efforts).
Once you submit your info, you will be redirected to the application process where you will first be asked for your personal FICO score.
If your income is above $12.5K per month, you can continue with the application process.
And, if your income is less than required, but your FICO score is above 650, you will be redirected to “apply for a credit card” with Eve Financial. Eve Financial is a newer company that essentially processes your information and matches you with a lender. National Funding likely gets a commission from every loan approved through the platform.
Now, back to the National Funding application process. If your income qualifies you, you’ll be asked to share more information. You’ll also be opted in to receive text messages if you don’t uncheck the box to revoke permission, so read carefully as you proceed.
The National Funding website will generate some forms for you to sign electronically. This only takes a few moments before you will be asked to prove your business income by uploading electronic business bank statements. If you have enough revenue, you’ll qualify.
Small Business Funding Offer Overview
If your business generates $12.5K or more per month and you’re still reading, it’s important to look at what kind of funding you might qualify for. Here’s a closer look at the three funding offers from National Funding.
1. Small Business Loans
Essentially, a “small business loan” through National Funding is a working capital loan or cash advance, intended for short-term needs. Your debt will be repaid through a percentage of each ACH transaction through your credit card processor, which is how they can use business income alone as a qualifying factor.
In the case of National Funding, you can expect a pretty hefty “flat fee,” also paid as a percentage of each transaction and in addition to any processing fees.
2. Business Loans for Bad Credit
National Funding’s “business loans for bad credit” are essentially the same a the small business loans but with higher fees. Instead of looking at your credit, the company examines your income. Your fees will be higher than with more traditional business financing.
If you feel like you won’t qualify for a more traditional funding option like a term loan, line of credit, or credit card, and you’re in a pinch, companies like National Funding do have money to offer.
Recommended: Credit Secrets Book Review: Can You Erase Bad Credit History?
3. Equipment Financing & Leasing
Finally, National Funding offers equipment leasing and financing. Essentially, if a piece of equipment breaks and you need it to operate, you can use a lender like this to help you replace it. In this case, funding could be necessary fast and it wouldn’t be a bad idea to pay a higher flat fee to keep your doors open.
Disclosure: In addition to these three funding options, National Funding advertises “merchant cash advances,” “working capital loans,” “unsecured business loans.” They also target specific industries like construction, commercial trucking, agriculture, medical practice, landscaping, and senior care. Their offers are almost the same across the spectrum, unchanging by title.
Recommended: How a Trucking Company in Snellville, GA Got Over $200K in Businesss Credit
Conclusion
If you have poor credit, an immediate business need, and your revenue is at least $12.5K per month, National Funding might be right for you. The company has been in business long enough to prove that they’re legit. However, I almost never recommend a business owner apply for this type of funding. Instead, learn how to qualify for better funding options through business credit coaching.
National Funding themselves talk about trade credit, business credit scores, and building your business credit score. I commend them for it, but recommend you steer clear unless you are facing an emergency. There’s a better way. If you want to learn how to qualify for $100K in business credit in 30 days, join Bussiness Credit Workshop today.