Our 2017 research and analysis of alternative lenders leads us to again recommend Fundation as the best alternative lender for working capital loans. We chose Fundation from dozens of alternative lenders. To understand how we selected our best picks, you can find our methodology and a comprehensive list of alternative lenders on our best picks page.

Why Fundation?

Fundation offers an easy application and approval process, simple loan terms and impressive customer service. Here is a breakdown of why it’s our best pick.

Application and Approval Process

Applying for a loan with Fundation is quick and simple. The application can be completed online in less than 10 minutes. In addition to asking the basics about you and your business — name, address, email address, social security number, phone number, etc. — Fundation requests a few other details up front to help determine if you have a reasonable chance of being approved for a loan, including:

    • What your business does.
    • How long the business has been open.
    • Annual sales.
    • Annual business profit before taxes.

Based on that information, Fundation provides an instant profile analysis that includes how much of a borrowing risk businesses in your industry are, whether the amount of time you have been in business meets the company’s guidelines and how your business profit before tax compares with other, similar businesses.

Moving forward, Fundation’s online application asks you a number of other questions, including:

  • The type of legal entity your business is.
  • The percentage of the business you own.
  • How you plan to use the money.
  • If your business has any outstanding debt.
  • How many employees you have.
  • Whether you own or rent your primary office space.
  • If you have property or liability insurance.
  • The type of benefits you offer your employees (health, retirement, etc.).
  • The value of your personal bank and retirement accounts.
  • Household income.
  • Annual charitable giving.
  • If you have personal life insurance.

Fundation’s proprietary application software then automatically captures additional information from credit, public-record and government-database sources in order to see if you might be a good fit for a loan. The software provides real-time, interactive feedback so you know where you stand. Based on this data, Fundation can give you a preliminary decision within minutes.

Businesses that get preliminary approval then work with a loan specialist, who gathers more specific financial data. Among the items Fundation will ask to see are three months of bank statements, a debt schedule for any outstanding debt, two years of tax returns and year-to-date financials. You have the option of sending this information to Fundation, or letting the company’s system electronically retrieve these documents directly from the IRS and your bank.

The loan specialist also talks with you to get a better understanding of your business and how it operates. The specialist wants to get the “story” of your business, so he or she can advocate on your behalf if an underwriter has questions. We like that these specialists take the time to put some context to your financial info. We didn’t see this type of personal attention with many of the other lenders we examined.

An underwriter then reviews the application and financial data and makes a final approval decision. The underwriting process typically takes about 24 hours, which is faster than some of the other lenders we investigated. If you’re approved, the company emails you loan documents to sign. Once signed, the money is typically deposited into your account the same day.

Who Qualifies

There are a wide variety of variables that determine which businesses qualify for loans. The business’s profitability, how much debt it has, how much money you need and what it will be used for are all taken into consideration.
While there are no hard-and-fast rules about who gets approved, there are several minimum requirements that must be met before you can even be considered. You must:

  • Have been in business at least two years.
  • Have at least three employees.
  • Have annual revenue of at least $100,000.
  • Have personal credit above 600.

We found it especially useful that Fundation clearly defines its minimum requirements; some of the other lenders were a little vague about theirs.

Loan Terms

Fundation offers conventional fixed-rate loans. This means that the interest rate remains the same for the entire length of the loan, regardless of whether market conditions change. We found it appealing that you know exactly how much the loan will end up costing you from the beginning. Some of the other lenders we looked into had variable-rate loans, which could end up costing you a lot more than you were envisioning at the start.

Fundation offers loans between $20,000 and $500,000. The money can be used for a variety of purposes, including working capital, business expansion and inventory purchases.

Since each business receives different loan rates, it is impossible for us to say how much a loan will cost you. However, Fundation’s annual percentage rates (APR) range from 7.99 to 29.99 percent. Fundation was one of the few lenders we examined that even provided an APR range. The total APR rates include origination and closing fees.

Repayment terms are between one and four years. Shorter terms are for working-capital and cash-flow-management loans, while longer terms are for loans for business growth and expansion purposes.

To repay the loan, borrowers make fixed-amount payments twice a month. The payment is automatically deducted from your bank account, which helps ensure you pay on time each month. Depending on the terms of your loan, you’re eligible to refinance after nine months of good payment history.

Fundation gives businesses the option of paying off the loan early for no additional costs. Many of the other online lenders we analyzed charged businesses a fee for repaying their loan amount early.

Customer Service

We were very impressed with Fundation’s customer service. To test the type of support you can expect, we called the lender on several occasions and posed as a business owner interested in a loan.

A loan specialist, who was happy and able to answer all of our questions, immediately answered our initial call. Many of the other lenders we talked with wanted us to answer their questions — how much money we needed, how soon we wanted the money, if we were ready to apply over the phone, etc. — before addressing any of ours.

During our first call, we talked about the application process, the types of documents we would need to provide, what went into the underwriting process, how quickly we could get our money, how the repayment process worked and the types of loans offered. Our questions were answered clearly and in enough detail to make us feel confident about Fundation’s processes. Some of the other lenders we spoke with gave us only one- or two-word answers that left us puzzled about their loans and how they operated.

When we made subsequent customer service calls, a friendly loan specialist answered, and spoke with us in great length about the Fundation loans, the process to get approved and repayment terms.

These loan specialists were also the only ones we spoke with who encouraged us to investigate other, alternative lenders to make sure we would be comfortable with Fundation. They explained what made their loans different and listed some specific questions we should ask other lenders. We liked that they were so confident that they had the best offering that they were willing to so far as to invite us to investigate other options.

Fundation also offers live-chat support, and is one of only a handful of lenders we looked into that made this option available. When we tested this service, our questions were quickly answered and they gave as much detail as when we spoke to the company representative over the phone.

In addition to being available via phone and live chat, Fundation loan specialists can also discuss loan options via email and an online form.


The biggest limitation with Fundation is that some businesses might not meet the lender’s minimum requirements. If your business hasn’t been open for at least two years, doesn’t have at least three employees and doesn’t bring in at least $100,000 a year, Fundation won’t even consider you for a loan. We would encourage businesses that don’t meet these criteria to check out our second-place winner in this category, OnDeck, which only requires at least one year of operation and $100,000 in revenue over the past two years. If your business has been open for less than a year, you should consider our best pick for startups, Accion.