National Funding Review 2026: Equipment Financing for Fair Credit Businesses

Company Overview

National Funding has been providing business equipment financing since 1999. Headquartered in San Diego, California, they have funded over $4.5 billion in equipment loans across all 50 states.

What sets them apart in the equipment financing industry is their focus on accessibility. While many lenders require excellent credit, National Funding works with businesses that have faced credit challenges.

Their A+ Better Business Bureau rating validates their ethical approach. This combination of accessibility and credibility is rare in the alternative lending space.

Why National Funding Stands Out

• Over 25 years of experience in commercial equipment financing
• $4.5 billion+ funded to American businesses
• A+ BBB rating for ethical practices
• Weathered multiple economic downturns including 2008 and the pandemic

Fair Credit Equipment Loans: The 580+ Advantage

National Funding accepts credit scores as low as 580. This is significantly lower than most equipment financing companies, which typically require 650 or higher.

Understanding the Credit Score Spectrum

• Excellent (740+): Access to traditional bank equipment loans at best rates
• Good (680-739): Most business equipment financing options available
• Fair (620-679): Options become limited; rates increase
• Poor (580-619): Very few lenders approve; National Funding serves this market
• Very Poor (Below 580): Extremely limited options industry-wide

Who Benefits from This Accessibility?

National Funding's equipment loan programs help business owners who have experienced:

• Past business failures affecting personal credit
• Medical debt or personal financial setbacks
• Discharged bankruptcies (2+ years typically)
• Credit utilization issues from rapid business growth
• Limited credit history (immigrant entrepreneurs, first-time owners)
• Seasonal revenue patterns causing temporary payment issues
• Divorce or family circumstances impacting credit

Consider a profitable HVAC contractor with a 600 credit score due to a past divorce. They have the skills and customer base to succeed. They simply need equipment financing to continue operations. National Funding evaluates the full picture.

How National Funding Evaluates Applications

Credit score is just one factor in their underwriting process. National Funding takes a holistic approach to business equipment loan applications.

Key Evaluation Factors

Cash Flow Analysis
Bank statements showing consistent deposits can compensate for lower credit scores. A business with $50,000 monthly deposits and $20,000 average balances presents different risk than one with inconsistent $5,000 deposits.

Time in Business
Established businesses (2+ years) are viewed more favorably. A 5-year-old restaurant demonstrates viability despite credit challenges.

Industry and Equipment Type
Essential equipment in stable industries represents lower risk. Medical equipment financing, construction machinery, and restaurant equipment are viewed favorably.

Down Payment
Larger down payments (20-30%) reduce lender risk and often enable approval for borderline applications.

Personal Guarantees
Owner willingness to personally guarantee the commercial equipment loan demonstrates confidence in business success.

Equipment Financing Products

National Funding offers multiple business equipment financing structures to match different needs.

Traditional Equipment Loans

Secured loans where the financed equipment serves as collateral. Terms range from 12 to 60 months with fixed monthly payments.

This structure works well for:

• Manufacturing machinery
• Medical equipment financing needs
• Construction equipment
• Any equipment you plan to use long-term

Benefits include Section 179 deductions and bonus depreciation from day one of ownership.

Equipment Leases

Lease structures offer flexibility with end-of-term options including purchase, return, or extension.

$1 Buyout Leases: Similar to equipment loans. Pay $1 at term end to own the equipment.

Fair Market Value (FMV) Leases: Lower payments during the lease. Purchase price at term end based on equipment value.

FMV leases work well for technology, vehicles, or equipment that may need frequent upgrading.

Working Capital Loans

Flexible small business loans for equipment purchases, inventory, expansion, or operational expenses. Terms of 6-36 months with amounts from $10,000-$150,000.

Sale-Leaseback Programs

Own equipment outright? Sell it to National Funding and lease it back. This converts hard assets into working capital while you continue using the equipment.

Application Process: Step by Step

National Funding has streamlined their equipment financing application process for efficiency.

Step 1: Online Pre-Qualification (10-15 Minutes)

Submit basic information online:

• Business name and type
• Owner information
• Time in business
• Annual revenue
• Equipment details and cost
• Estimated credit score range

You receive immediate feedback on approval likelihood before investing significant time.

Step 2: Document Submission

Gather these documents for your business equipment loan application:

• Bank Statements (3-6 months): Shows cash flow patterns
• Tax Returns (1-2 years): Verifies income and trends
• Personal Financial Statement: For owners with 20%+ equity
• Equipment Quote: Detailed specifications and pricing
• Business Formation Documents: Licenses, articles of incorporation
• Credit Check Authorization: Required for underwriting

Organized applicants complete this in under an hour. Those gathering documents from accountants may need several days.

Step 3: Underwriting (24-72 Hours)

Human underwriters review your materials. Unlike automated systems, they consider context and nuance around credit issues.

Decisions typically come within 24-48 hours for straightforward applications. Complex situations may extend to 72 hours.

Step 4: Terms and Documentation (2-3 Days)

Approved applications receive detailed term sheets including:

• Loan or lease amount
• Interest rate
• Term length
• Monthly payment
• All fees and costs
• Down payment requirements
• Insurance and guarantee conditions

Digital signatures through DocuSign speed this phase considerably.

Step 5: Funding (3-5 Days)

After documents are signed and insurance is in place, funds go directly to equipment vendors via wire transfer.

Total Timeline: 7-14 days from application to funding for most equipment loans.

Interest Rates and Pricing

National Funding's rates reflect the higher risk of serving fair credit borrowers. Rates are customized by profile but typically fall into these ranges:

Rate Ranges by Credit Score

• Fair Credit (580-639): 18-28% APR
• Good Credit (640-679): 14-22% APR
• Strong Credit (680-720): 10-18% APR

Within each range, stronger cash flow and larger down payments access better pricing.

Why These Rates Make Sense

For businesses who cannot access traditional banks, the relevant comparison is National Funding versus other available alternatives:

• Merchant Cash Advances: 40-80% effective APR
• Business Credit Cards: 25-30% APR, variable
• Hard Money Lenders: 15-20% plus upfront points
• Predatory Lenders: 35-50%+ APR

National Funding's 18-28% range is reasonable for the risk profile and business practices involved.

Total Cost Example

A $50,000 equipment loan at 22% APR for 36 months:

• Monthly payment: $1,830
• Total paid: $65,880
• Total interest: $15,880

Compare to a merchant cash advance for the same $50,000:

• 1.4 factor rate = $70,000 repayment
• Total cost: $20,000
• Effective APR: approximately 67%

The equipment loan saves over $4,000 in financing costs.

Fees to Expect

Beyond interest, budget for these additional costs with your commercial equipment loan:

• Origination Fee: 2-5% of loan amount ($1,000-$2,500 on $50,000)
• Documentation Fee: $500-$1,500 (fixed regardless of loan size)
• UCC Filing Fees: $25-$200 (varies by state)
• Late Payment Fees: $50-$100 or 3-5% of payment
• Failed ACH Fees: $35-$50 per occurrence

Review prepayment terms carefully. Some structures include early termination fees.

Customer Service Quality

National Funding's A+ BBB rating reflects consistent attention to customer experience.

What Customers Appreciate

• Clear Communication: Plain-language explanations of credit decisions and rate factors
• Educational Approach: Guidance on improving future applications
• Responsive Support: Quick access to human representatives
• Honest Expectations: No overpromising on rates or approval
• Flexible Problem-Solving: Payment deferrals and restructuring when needed

Common Feedback

Praise: Approval when others declined, respectful treatment, helpful credit guidance.

Concerns: Higher rates (understood but frustrating) and occasional delays during high-volume periods.

Industries and Equipment Covered

National Funding provides equipment financing across virtually every business sector:

Popular Equipment Categories

• Construction: Excavators, bulldozers, lifts, compressors, trucks
• Medical/Dental: Diagnostic equipment, imaging systems, dental chairs (medical equipment financing)
• Restaurant/Food Service: Commercial kitchens, ovens, refrigeration, POS systems (restaurant equipment financing)
• Manufacturing: CNC machines, assembly equipment, 3D printers
• Transportation: Commercial vehicles, trucks, trailers, fleet equipment
• Agriculture: Tractors, combines, irrigation systems
• Technology: Computers, servers, telecommunications equipment
• Retail: POS systems, security equipment, inventory management
• Automotive: Lifts, diagnostic tools, alignment equipment

This versatility makes National Funding reliable regardless of industry.

Tips for Approval Success

Maximize your chances of getting approved for an equipment loan with National Funding.

Before You Apply

• Show Strong Cash Flow: 3-6 months of consistent deposits with average balances at 10-20% of requested amount
• Consider a Larger Down Payment: 25-30% down significantly improves approval odds
• Gather All Documents: Complete submissions prevent delays
• Prepare Credit Explanations: Brief written context for credit challenges helps human underwriters
• Finance Essential Equipment: Mission-critical equipment is viewed more favorably than luxury purchases

Use National Funding as a Stepping Stone

Think long-term about your equipment financing strategy:

• Make every payment on time to build positive history
• Ensure payments report to credit bureaus
• Pay down high-utilization credit cards below 30%
• Build 2-3 months of cash reserves
• Explore refinancing at better rates after 12-18 months

Mistakes to Avoid

• Applying for more than cash flow supports
• Missing early payments (first 3-6 months are critical)
• Ignoring total cost when evaluating approval
• Financing wants instead of needs
• Failing to compare 2-3 lender options

Is National Funding Right for Your Business?

National Funding earns its 4.6/5 rating through accessibility, ethical practices, and strong customer service.

Ideal For

• Businesses with 580-650 credit scores
• Companies declined by traditional lenders
• Owners rebuilding credit who need equipment now
• Businesses with strong cash flow despite credit challenges
• Startup business equipment financing with experienced owners

Consider Alternatives If

• Credit score above 650 (better rates available at Crest Capital)
• Credit score 630-650 in construction, agriculture, or medical (Credion Finance offers industry specialization)
• Credit score 700+ (traditional banks offer lower rates)

The Bottom Line

For businesses that need equipment to operate and generate revenue, the real question is not whether 20% APR is expensive. It is whether operating without essential equipment is acceptable.

A restaurant needing a $30,000 commercial oven for catering contracts, a contractor requiring a $50,000 excavator for jobs, or a medical practice needing diagnostic equipment all face the same calculation. If the equipment generates revenue exceeding financing costs, the investment makes sense.

National Funding provides a legitimate, ethical pathway for credit-challenged businesses. They may not offer the cheapest small business loans, but they are often the only viable option for the 580-650 credit range. Their willingness to approve borrowers others decline, combined with fair business practices, makes them invaluable for American small businesses working to rebuild credit while maintaining operations.

Ready to explore your options? Use our equipment financing calculator to estimate monthly payments, or compare National Funding with other lenders. Learn about Section 179 tax deductions and read our guide to equipment financing with bad credit for more strategies.