National Funding Review

Last Updated: April 14, 2019 Affiliate disclosure
  • No collateral required
  • No hidden fees
  • Can reapply every 30 days (if rejected)

Overview

Founded in 1999, National Funding, is one of the largest private fintech lenders of small and medium-sized business loans, providing working capital loans and equipment financing. National Funding has experienced a 160 percent revenue growth surge over the past three years, to become one of the top 10 alternative SMB lenders in the nation. Since 1999, National Funding has provided more than $2 billion in capital to over 35,000 businesses nationwide with loan volume to exceed $500 million in 2018.

Customers come to National Funding for their working capital and equipment financing needs. During the course of this National Funding review we found out that National Funding is very flexible and that you won’t have to worry about collateral or having good credit. Customers can simply submit a one-page application and 3 months’ business bank statements to get funding within as little as 24 hours.

National Funding offers short-term working capital loans, and equipment leasing programs. They provide loan amounts ranging from $5,000 to $500,000. Though their short-term loans come with significant factor rates (ranging from 1.15 to 1.35) and a 2%-5% origination fee, they stand out by offering a prepayment discount, which is pretty rare for short-term loans.

A bad credit score can make obtaining a proper financing much more difficult. National Funding understands how frustrating this can be and has dedicated itself to making financing options available even to those business owners with less than perfect credit.

After looking carefully at National Funding’s offerings and requirements, we’re confident that this lender offers some of the most competitive rates on the market. National Funding claims on their website that they approve up to 60% of all small business loans.

PROS:

  • No collateral required
  • Early repayment incentives
  • Relaxed credit score requirements
  • Funding within 24 hours

Cons:

  • Complicated terms and fees
  • Potentially high origination fees

 

Services Offered & Types of Funding


 

Kabbage only offers one type of funding for small business owners and that is a line of credit which comes with a guaranteed 6-month repayment option, with the potential of also obtaining a 12-month and 18-month repayment option if the borrower meets the eligibility requirements.4

Types of
Loans
Minimum
Loan Amount
Maximum
Loan Amount
Borrowing Fee Effective APRs LoanTerms Collateral Required
Line of Credit 6 months $1,000 $250,000 1.5% to 10% of the amount borrowed 24% to 99% 6 equal payments of principal plus monthly fee. Personal Guaranty required: Lender may file UCC-1 lien
Line of Credit 12 months $10,000 $250,000 1.5% to 10% of the amount borrowed 24% to 99% 12 equal payments of principal plus monthly fee. Personal Guaranty required: Lender may file UCC-1 lien
Line of Credit 18 months $15,000 $250,000 1.25% to 3.25% of the amount borrowed 24% to 99% 18 equal payments of principal plus monthly fee. Personal Guaranty required: Lender may file UCC-1 lien

A Kabbage loan is a line of credit in the sense that a customer is permitted to draw as much or as little as needed, up to the maximum amount available. Draws under the maximum amount are repaid with a straight-line repayment of principal (i.e. either six, twelve, or eighteen fixed principal payments) plus the monthly fee. The monthly fee is larger in the first two (or six) months of repayment (depending on whether the repayment period is six or twelve months); thereafter, the fee is reduced for the remainder of the loan period.

Kabbage does allow the borrower to have more than one loan at any given time, up to the maximum approved line amount. For the convenience of the borrower who has multiple loans, the minimum amount due on each loan is combined into a single payment and withdrawn automatically monthly from the designated checking account. Amounts that are repaid on the loan become available to the borrower, in some cases immediately, but generally about seven to ten business days after payment.

If withdrawing funds via PayPal or a business checking account, there is a minimum draw requirement of $500. If the draw is through the Kabbage Card, then there is no minimum draw.

Let's first take a look at what is “simple” about fees and rates on a loan from Kabbage. There are no extra fees; there is no origination fee, draw fee, document fee, subscription or activity fee, or even a prepayment penalty on the 6 and 12-month loan terms. Where there “might” be an additional fee, according to the Kabbage website, is if one of its third-party referral partners charges a fee (which can be up to 1.5% per month).

Of course, Kabbage wants its borrowers to repay on a timely basis, but they claim they are somewhat flexible. If the borrower knows they won't be able to make a payment, the borrower can contact Kabbage to discuss their options. Kabbage will charge a late fee if a payment is not made within four days of the payment due date; that fee will vary depending upon the amount due and could be up to $100.

One of the things we appreciated most during our Kabbage review was the lender’s useful loan calculator that lets you really see what your fees will be, so there shouldn’t be any surprises.

The Kabbage loan calculator lets you play with the numbers a bit, giving you an idea what your savings might be if you can repay earlier. However, because the higher monthly fees are assessed in the first few months of the loan (first two months of the 6-month loan and first six months of a 12-month loan), your savings may not be that significant. The bottom line is that your savings are only decent if you can repay the loan within the first few months.

Is a loan from Kabbage worth it? We sure think so! Know all your fees up front, borrow only what you need, and have cash available the moment you need it – what could be better?

Kabbage‘s minimum requirements for its borrowers are relatively straightforward. For a loan which is less than $200,000, the customer should have annual revenues of at least $50,000. The business should also have been in operation for at least one year.2

For loans in excess of $200,000 and up to $250,000, the annual revenue threshold rises to $1,500,000, with a business in operation for three years. Additionally, the customer’s ability to link its bookkeeping and bank accounts also play in the borrower's favor. Kabbage will look at your history with PayPal, Amazon, eBay, QuickBooks, Xero, and others in an effort to generate its best offer. Kabbage puts less credence into the business owner's credit score than it does the company's financial stability which is why they focus on the full financial picture of the business. This itself makes us love Kabbage even more.

The online process for applying for a loan through Kabbage begins with your answers to some basic questions about your business and yourself (as the company representative). At a minimum, that information will include your name and address, email address, phone numbers, social security number and federal tax ID number. From there, Kabbage will request access (read-only) to your bank account and/or your accounting software, as well as other key data and vendor providers, which can help the Kabbage automated underwriting model make the best decision for you. Kabbage does one hard credit inquiry while reviewing your application, and although they do have a hard FICO score minimum, they will review the data with an eye to determining their risk as well as verifying your identity. So long as Kabbage does not have to jump through hoops to verify your data, you should have a response within a short time. If they need additional information, that may delay the processing time.

Upon approval, Kabbage will work with you to determine the best way to get the funds to you (i.e. ACH to your bank account, PayPal or through use of the Kabbage Card). Though a rejection of the loan application might be disappointing, Kabbage says they will intermittently review your information with a view to getting you an approval at a later date.

Kabbage customer support is available via phone during regular business hours, as well as via email and all standard social media channels – Facebook, Instagram, Twitter, and LinkedIn. The company makes every effort to respond to all inquiries within 24 hours. The website also has an FAQ page that explains about how the company was founded as well as its policies, and will give borrowers a better understanding of who they are doing business with. The website also provides access to it’s Privacy Policy and Celtic Bank’s Privacy Policy.

Kabbage has earned an A+ rating from the Better Business Bureau; with 29 reviews, it gets slightly better than a 3-star rating. There are only 53 complaints against the company since 2015, which is less than one a month – not bad considering that Kabbage provides loans to literally thousands of businesses every month.

On the website Trustpilot, Kabbage has nearly 5,000 reviews, with 94% of respondents giving them a ranking of great or higher; overall, Kabbage has a 5-star reputation on Trustpilot. Overall, borrowers seem extremely satisfied with Kabbage’s service.

To give credit where credit is due, there are quite a number of “verified orders” where Kabbage has invited the respondent to provide a review on Trustpilot. In the cases of the 1-star reviews, about half the time there was a response from someone at Kabbage online. However, Kabbage customer support representatives also tend to reply to these comments personally, rather than sharing online, where they can’t address specifics in a public forum. The simple fact that Kabbage is able to acquire so many reviews indicates that it has a strong relationship with its borrowers, which we believe is quite a good thing.

For a small business owner looking to cover unexpected expenses or for true short-term working capital, the Kabbage line of credit is a great option, albeit a potentially costly one. The higher fees at the beginning of the 6 and 12-month loan terms and the short duration of the repayments mean that there isn't a lot of incentive for an early repayment of the loan.

In the alternative lending space, Kabbage gets high marks for getting the approval and funding process down to a science with very quick turnaround for most of its applicants. The relatively easy approval process can be ideal for a borrower with an “iffy” credit history. Perhaps most importantly, Kabbage’s easy access to funding and extremely user-friendly interface makes it easy to understand your loan and to use it to your business’s best advantage. If you’re looking for a small loan or line of credit, Kabbage is a lender that we’d recommend checking out.

1Kabbage can approve you in minutes for up to $200,000 when they are able to automatically obtain your business data and verify your bank account. Lines of credit over $200,000 require a manual review. In some situations, errors may occur during the sign up process, or we may need to send micro-deposits to confirm your bank account for security purposes. If this is the case, it may take up to several days to provide you with access to funding.

2This is not a guarantee of qualification, but rather the minimum qualification criteria.

3The Kabbage Card is issued by Republic Bank & Trust Company, member FDIC, pursuant to license by Visa U.S.A., Inc. See the Cardholder Agreement for Terms & Conditions including fee schedule details.

4After you apply, Kabbage will inform you if the loan you are requesting qualifies for a 6-month term, or a 6-month term and a 12 or 18-month term. Eligibility for 12 and 18-month loan terms is subject to availability and can change based on underwriting criteria. 

4 All loan fees are disclosed in the loan agreement.

Credit lines and pricing are subject to periodic review and change, including line and pricing reductions, line or pricing increases, or line eliminations. Individual requests for capital are separate installment loans. All loans are subject to credit approval.

The Kabbage Card is issued by Republic Bank & Trust Company, member FDIC, pursuant to license by Visa U.S.A., Inc. See the Cardholder Agreement for Terms & Conditions including fee schedule details.

All rights reserved. Kabbage is a registered trademark of Kabbage, Inc. Terms, conditions, features, availability, pricing, fees, service and support options subject to change without notice. All Kabbage® business loans are issued by Celtic Bank, a Utah-Chartered Industrial Bank, Member FDIC.

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