Fundation Loan Review

This review of Fundation is designed to not only look at the customer experiences of using Fundation, but to examine the products in detail as well as the company itself.

fundation review

Fundation Review in Numbers: 2020 Updated

💰 Loan Amount
$20,000  to $500,000
💸 Loan Term
Up to 4 years
Unsecured?
Secured
Requirements
  • Business have traded for at least 2 years
  • Businesses with 3+ employees
  • Annual revenue of at least $100,000
  • Credit score of 600+
Client Reviews
76%
🌐 Website:
Fundation.com
🌝 Easy to Apply:
Yes
📃 Required:
  • Bank statements
  • Basic information about the business and the owner
💳 Minimal Interest Rates
8% to 30%
💌 Online Feedback:
3.8 / 5 Trust Score on TrustPilot
🏆 Awards and Recognition:
  • Named Best Working Capital Loan by Business News Daily
  • Won the Best of FinXTech award in 2018
Fundation Review Summary
Overall
82%
82%
  • Credibility - 90%
    90%
  • Client Reviews - 76%
    76%
  • Website - 80%
    80%

Editor's Conclusions

Fundation delivers loans from leading banks and partners. Requirements for the loan seem slightly arbitrary. Furthermore, customer reviews are few and far between. What we can look at is the website, which is subpar, and the loan itself, which is versatile enough and has reasonable interest rates.

Credibility & Company Story

How Fundation Started

Fundation started, as you would expect, as a credit solutions provider – realising that small businesses are in need of cash flow support, and banks are failing them. Fundation was founded by Sam Graziano and Doug Gordon in 2011. Sam was already vice president of a few different investment and capital growth companies prior to launching Fundation, whilst Douglas, an economics graduate and researcher, was relatively inexperienced when starting Fundation – though he now is also Executive Vice President of LeafLink.

How did Fundation Grow its Presence in the Market?

Fundation has grown from a startup in 2011, to one of the leading small business lending platforms. Fundation privately labels their platform for institutions that deliver credit and financing to small businesses.  Primarily, this is by working with banks, but they also have a list of partners to help deliver their own financial products.

This partnering with well-known banks and such is what gave Fundation a certain amount of credibility in the market from early on. This credibility, from being extremely pragmatic and a culture of risk management, convinced many banks and B2B companies to be their exclusive partner in serving their small business clients. This meant that Fundation essentially received free leads because companies much larger than them were pointing their own customers to the Fundation platform to help deliver loans.

Fundation also gained a tonne of credibility in 2013 when they got Goldman Sachs on board as an investor, who pitched in $100 million. This was a great way to get a big name on board, as well as raise a lot of money to fund growth.

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Leading Private Investors in Fundation

Fundation has undergone four rounds of funding in its lifespan, twice in 2013, once in 2016, and the last one in 2018. They raised $222.7m in total, with $120m coming from the last one alone. Overall, there are 8 investors in total, which are:

  • SunTrust Bank (lead investor)
  • Goldman Sachs (lead investor)
  • Waterfall Asset Management
  • Leo Group
  • Kayon Partners
  • Garrison Investment Group
  • Angel Street Capital
  • Solel Investment Group

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In Detail: What Fundation Does

fundation reviewAs explained above, Fundation is partnership focused. So, if you’re dealing with Fundation, you’re also dealing with a third party (or rather, Fundation soon becomes that third, middle, party). This is important to be aware of as a customer.

This also means that there’s more variety than a company that lends its own money without partners. Pinpointing interest rates to be expected is difficult – but luckily the quote process is very quick.

We can say though, that when using Fundation, loans are capped at $500,000 and are a maximum of 4 years. This is reasonably short and small, so it won’t help large growth projects much.

Fundation states that these loans are mostly for expansion, equipment, and capital improvements. Repayments are made twice per month, which isn’t the most ideal scenario for some cash flow situations (though some competitors are even worse, with weekly payments).

There are no prepayment penalties – you pay the outstanding balance as well as accrued interest when prepaying the loan. Personal guarantee is needed on the loans, as well as UCC-1 business assets for most customers.

Upon applying, Fundation will get to know your business model, understand the business and its needs, and develop contractual offers that suit the company. This, in many customers’ experiences, has all taken place within 48 hours.

Credit Line

Fundation also offers lines of credit. These are specifically designed for working capital and short-term cash flow solutions. The maximum is smaller than the term loan, being capped at $150,000. Payment frequency is set at once per month, and the new balance after each draw is amortized (equal installments over 18 months). The other requirements are the same as the term loan – such as personal guarantee being needed.

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Fundation Business Loans Client Reviews

TrustPilot: 2 reviews, 100% ‘Excellent’  — 3.8 / 5.

The Feedback:

The only two reviews that Fundation has on Trustpilot are positive:

“pretty good and easy to work with, but the interests is pretty high”

“Loved how fast the process was with Fundation. Applying was easy and almost entirely paperless. I liked that the process was online, but appreciated that someone at Fundation reached out through the progress of my loan.”

Analysis of Client Reviews:

With only two Fundation reviews on Trustpilot it is nearly impossible to form a realistic opinion on the company’s services and customer support. Although both reviews are positive, the fact that the last one was left in 2018 is highly concerning – most likely Fundation will not be a well-established and experienced finance provider.

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Fundation Website Review

 

Fundation website review

The Fundation website has an impressively neat design, making good use of space and not overcrowding text. Perhaps a little too much, though, as information is sparse and you can’t understand too much about the products/service on offer from the home page. Fortunately, there is sufficient detail once you click through the links, but the menu doesn’t hold all of these pages.

There isn’t an FAQ to find either, or a blog, or any additional resources. Whilst the website is satisfactory for a hot lead who already knows about the company, it’s not great in getting across the products/message of the company to users who don’t already know them.

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OnDeck Loan Compatibility

  • Startup: No, OnDeck only approves companies who have been operating for 3 years
  • Bad Credit: OnDeck requires a 600+ credit score. This rules out those with very poor credit ratings
  • Sole Trader: Yes, as long as you have a business bank account
  • Established Business: Yes, this is perhaps the target audience of OnDeck
  • Turnover: $250,000/year

Fundation Loan Compatibility

StartUp: Not suitable, as the requirement is to have traded for at least 2 years and have annual revenue of at least $100,000

Bad Credit: Required credit score is 600+ which is lower than the industry average

Sole Trader: Accepted

Established Business: The maximum amount of loan is $500,000, which is somewhat limiting.

Fundation Short Review

Fundation, being wholly partner-focused, is a little different to most of its competitors. The loans on offer though are roughly industry standard. The company rules out very young businesses and those with poor credit. Further, interest rates are as you would expect (8% to 30%). The issue is that the company has very little online credibility, with hardly any customer reviews. This makes it difficult to prioritize over a competitor, who likely offers the same or slightly more versatile loans but with more credibility.

Submit an Expedited Application to Fundation the link below.

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