National Funding Secures Record $220M in Major Small Business Bet

SAN DIEGO, CA – March 03, 2026 – In a powerful display of investor confidence, National Funding, Inc. today announced the completion of a record-breaking $220 million asset-backed securitization (ABS). The deal, which was heavily oversubscribed, not only provides the small business lender with a massive infusion of capital but also signals a bullish outlook from Wall Street on the health and potential of America's small and medium-sized enterprises (SMEs).

The transaction was an upsize of the company's existing Series 2025-1 issuance, adding $75 million to reach the new record amount. Investor appetite was exceptionally strong, with demand outstripping the available bonds by a factor of three across all four classes of notes. This intense interest allowed National Funding to price the deal at a blended yield of 6.13%, a significant 92 basis point improvement from its original issuance in May 2025. This improvement translates directly into a lower cost of capital for the firm, a critical advantage in the competitive lending market.

A Roaring Vote of Confidence

Securitization is a financial process where a company bundles income-producing assets—in this case, small business loans and receivables—and sells them to investors as bonds. The success of such a deal hinges on investors' belief in the quality of the underlying assets and the originator's ability to manage them. National Funding's latest transaction leaves no doubt about the market's sentiment.

The 3x oversubscription is a clear indicator that institutional investors are increasingly comfortable with and eager for exposure to the SME credit market. This comes at a time when the broader ABS market is showing robust health. Market outlooks for 2026 projected post-financial crisis record issuance, fueled by a stabilizing interest rate environment and a diverse pipeline of assets. National Funding’s success is a prime example of this trend, particularly within the growing fintech and alternative lending sectors.

The Kroll Bond Rating Agency (KBRA) affirmed its investment-grade ratings on the notes, with the senior Class A notes holding a 'AA-' rating. This stamp of approval from a major credit rating agency provided further assurance to a wide range of investors, from pension funds to asset managers, looking for reliable yield and portfolio diversification.

The Strategy Behind the Success

This achievement is the culmination of a deliberate, multi-year capital markets strategy for National Funding. It marks the company's fourth and largest securitization to date, demonstrating a consistent ability to build investor trust and execute increasingly ambitious transactions. The company's prior securitizations, including the initial $145 million Series 2025-1 deal in May 2025, laid the groundwork by attracting a diverse group of 13 unique investors, many of whom were new to the company's ABS program.

That series was strategically structured as an "expandable" note, allowing for future upsizes without requiring consent from existing noteholders—a feature that provided the flexibility for this record-breaking transaction. This foresight highlights a sophisticated approach to managing its capital structure.

"This transaction represents a transformative moment for National Funding and a powerful validation of our strategic direction," said David Gilbert, CEO of National Funding, in a statement. "The 3x oversubscription across all bond classes and the 92 basis point yield improvement from our May issuance demonstrate extraordinary investor confidence in our business model, risk management capabilities, and growth trajectory. This premium pricing not only reduces our cost of capital but generates significant additional value that we will deploy to expand access to capital for small businesses across America."

With Guggenheim Securities serving as the sole structuring agent, the deal’s success underscores the strength of National Funding's underwriting and its portfolio's performance, which together have provided over $4.5 billion in financing to more than 80,000 businesses nationwide.

Fueling the Engine of the Economy

The most significant impact of this financial maneuver will be felt far from Wall Street, on the main streets and industrial parks where small businesses operate. The substantial reduction in National Funding’s cost of capital directly enhances its ability to provide financing to entrepreneurs. This influx of funds enables the company to expand its lending capacity, potentially offering more competitive terms and reaching a wider array of businesses in need of working capital or equipment financing.

This development is particularly timely. The lending landscape is in flux, with many businesses finding traditional bank loans difficult to secure. Non-bank institutions like National Funding have stepped in to fill this gap, leveraging technology to offer faster, more flexible financing solutions. In 2026, these alternative lenders account for a significant portion—nearly 37%—of the asset-based lending market, prized for their speed and adaptability.

Furthermore, recent policy shifts are expected to drive even more demand toward non-bank lenders. New Small Business Administration (SBA) eligibility rules that took effect in March 2026 have narrowed the pool of applicants for government-backed loans. National Funding's newly fortified balance sheet positions it perfectly to serve this growing segment of the market, ensuring that more entrepreneurs have access to the capital needed to hire, expand, and innovate.

A Shifting Lending Landscape

National Funding's success is emblematic of a broader technological shift in commercial finance. The industry is rapidly moving away from a rigid reliance on traditional credit scores and toward more dynamic, data-driven underwriting. By prioritizing real-time cash flow data and other business performance metrics, fintech-powered lenders can make faster and often more accurate credit decisions, sometimes approving funding in as little as 24 hours.

This capital raise solidifies National Funding's position as a formidable player in a consolidating market where scale and access to efficient capital are paramount. As larger private lenders expand their footprint, the ability to execute large-scale securitizations provides the necessary firepower to compete and grow market share. By successfully tapping the public markets, National Funding has not only secured its own growth trajectory but has also cast a bright spotlight on the vitality and investment-worthiness of the American small business sector.