In The News


03 30 2015


03 30 2015

Small Business Lender Is on Big Growth Trajectory

When banks retreated from making small business loans during the depths of the Great Recession, Dave Gilbert saw a huge opportunity.

Gilbert, who ran an equipment leasing company in UTC as the founder and CEO, decided to move in and lend to entrepreneurs desperate to borrow to keep their businesses up and running.

It was a propitious decision.

Today, National Funding, Gilbert’s financial services company, has emerged as one of the leaders of the fast-growing area of nonbank, or alternative lending.

“After the market crash in 2008, we moved to fill the void left by the banks,” said Gilbert, “And we’ve had rapid growth since.”

Indeed, revenue grew fourfold, to $40 million in 2014 compared with $10.5 million in 2009 when he launched the lending side of his business.

Banking on Nonbank Loans

And that rapid growth is expected to accelerate as the market for nonbank loans continues to soar.

Gilbert said he plans to push revenues to $70 million in 2015 based on what he expects to be $350 million in lending activities.

He’s even leased his entire building on Towne Centre Drive and is adding 17 employees by the end of April to achieve that goal.

National Funding has company in the space, such high-profile nonbank lenders as Lending Club Corp. and OnDeck Capital. Both held successful public stock offerings on Wall Street last year.

National Funding has been able to gain traction making low-hassle loans to businesses with $1 million or less in sales for such purposes as working capital, equipment financing and merchant cash advances.

The average loan runs $35,000, and now he’s expanding into the midmarket category to make $250,000 to $1 million in loans to businesses averaging $5 million in sales.

Willie Beeson, owner of Mission Aire Corp., an Orange County heating ventilation and air conditioning contractor, turned to National Funding two years ago after his bank declined to lend to his business.

“It ain’t cheap,” he said. “My loan is a little more expensive than might otherwise be at a bank, but I figure that it’s just part of the cost of doing business.”

The initial application can be done online in less than 30 minutes — compared with as much as 175 hours to fill out an application for a bank loan, said Gilbert, referring to one Federal Reserve Bank study.

Often one of the company’s underwriters will jump in to work with the customer to facilitate the process.

“A lot of people like to talk to a sales person,” he said. “When it comes to a very personal thing like borrowing money, they want to make sure they understand the details.”

Financial Fitness Test

National Funding examines six months of bank statements, as well as personal credit scores and tax returns.

The company also scours social media accounts, such as Facebook, Linkedln and Twitter, for other relevant information that might be available.

“You can tell a lot about an applicant from social media, such factors as asset size and liabilities,” he said.

Gilbert also said he puts the entrepreneur’s business credit history ahead of personal credit reports.

“They treat their personal credit very differently from their business credit,” Gilbert explained. “They’ll never bounce a check on their business account.”

Loans, which run six to 12 months, are repaid daily, rather than monthly — automatically deducted from the borrower’s checking account.

“The daily payments help us to more closely monitor the loans, and help the customer better manage their cash flow,” Gilbert said.

The current customer profile is an entrepreneur in his or her 40s, and scrambling to find the capital needed to continue.

“The profile represents about 90 percent of America’s small business — the heart of our business,” he said.

The company has negotiated more than $80 million in lines of credit from big banks that serve as the source of capital for the loans.

In addition to National Funding, Gilbert is co-founder of another lending firm Quick Bridge Funding in Irvine, which offers short-term loans to small businesses. The Orange County Business Journal ranked the company No. 1 on its 2014 list of the Fastest Growing Privately Held Companies.

And he was named a finalist in the San Diego Business Journal’s 2013 Annual Most Admired CEO Awards.

Promising Market Outlook

Long term, Gilbert said he doesn’t expect banking to re-enter the market for those generating $1 million in sales, which offer more room for his growth.

“They’ve shifted to larger businesses because they can get better margins,” he said. “There is a tremendous awareness of the product now, which is something that did not exist five years ago.”

His customers come from all parts of the country as that awareness continues to grow.

Jim Moran, president of renewable energy contractor Advanced Energy Group in Ann Arbor, Mich., said he has turned to National Funding to help provide working capital for projects in Connecticut.

“We were mostly in sales in geothermal and solar projects, but we recently got into installations,” he said. “We’re six to eight times the size of just a few years ago.

“As a result, we’ve run into cash shortages here and there, but National Funding has enabled me to borrow $60,000 on very short notice,” Moran said. “It’s been costly interest wise, but interest isn’t the only criteria. They got me money fast, and pretty easily, which is more important.”


-Article by Tom York for San Diego Business Journal

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Terms & Conditions

General Acceptance

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.


US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan. What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number. We will also ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.


For Loan/Merchant Services:

The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.


For Equipment Services:

I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.


Text Messaging:

By providing my wireless phone number to National Funding, Inc., I agree and acknowledge that National Funding, Inc. may send text and multimedia messages to my wireless phone number for any purpose. I agree that these text or multimedia messages may be regarding the products and/or services that I have previously purchased and products and/or services that National Funding, Inc. may market to me. I acknowledge that this consent may be removed at my request but that until such consent is revoked, I may receive text or multimedia messages from National Funding, Inc to my wireless phone number.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into the binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. If for any reason your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain the statement, please write to National Funding Inc., 9820 Towne Centre Drive, San Diego, California 92121. Funding amount and credit approval is subject to a full credit profile review.