Fundbox is a terrific alternative lender for startups and small businesses limited by traditional banks’ typical loan qualification hurdles. The lender has lower credit score requirements than most other providers and allows a wider range of companies to qualify. This review delves into where Fundbox succeeds, where it falls short, and what you can expect from the lender.
Fundbox Compared to the Best Small Business Loans
We researched dozens of small business loans to find the best lenders on the market. Below are our Golden Eggs, terrific alternatives to Fundbox if you’re looking for more options. We also have a list of the best small business loans if you want to weigh even more choices.
Bluevine is a top choice for businesses that need immediate access to a line of credit. Open a Bluevine checking account today and enjoy unlimited transactions with no monthly fees or minimum balance.
Fundbox: The Good and the Bad
Fundbox has plenty of good qualities that make it a great choice for businesses that need funding fast. But, of course, there are aspects of the service that may make it a less-than-ideal fit, depending on your situation. Let’s dive into where Fundbox shines and where it falls short.
What Fundbox Is Good At
Fundbox is an attractive lender for businesses that require an immediate cash injection. Truly, they make the process of getting a small business loan easier in a multitude of ways.
Easy to qualify: Fundbox has less stringent qualification requirements than most banks and alternative lenders. You can qualify for a line of credit, even if you’ve only been in business for six months or less. Most similar lenders require at least one year in business.
Fundbox considers businesses with shorter histories based on their financial data and health. Additionally, Fundbox has a minimum credit score requirement of 600, so you may qualify with a below-average or poor credit score. Most other lenders have a minimum credit score requirement of at least 670.
… And easy to apply: Fundbox has a straightforward application process requiring minimal documentation. You’ll only need to fill out an online form with basic information about your business, such as name, phone number, time in business, and average monthly revenue.
The lender uses data from your bank account or accounting software to judge your creditworthiness, eliminating the need for filing multiple documents. Plus, applying for a line of credit through Fundbox doesn’t affect your credit score.
Quick funding: Not only is the whole process easy, but you can receive a decision from Fundbox on the same day as your application. And you can expect to receive the funds as soon as the next business day after your loan is approved. This type of quick access to funds is a lifeline for many small businesses and startups with unpredictable cash flows.
Transparent pricing: Fundbox lets you use its online calculator to determine precisely how much you’ll pay on your line of credit and when. You also don’t have to worry about extra fees for origination, draw, account maintenance, or inactivity.
Nor will you run into prepayment penalties if you want to resolve your debt before the term is up. You can repay early to refill your line of credit so you have money available during lean months. Paying it off early also lets you save on interest fees.
Automated payments: Most of the Fundbox’s processes are automated. This includes your weekly payments. The lender automatically withdraws funds from your checking account, so you never have to worry about missing a payment.
Furthermore, Fundbox also lets you automate vendor payments. Depending on your repayment method, you’ll have three days to repay the money at no charge. Again, you can ensure your vendors are paid on time, even if you don’t have ready cash.
Excellent support: With your Fundbox line of credit, you get access to a live agent available Monday through Friday during business hours. Or, you can reach out to Fundbox via email or on your online dashboard, where you’ll find a help center with information about applying, credit limits, fees, and more.
What Fundbox Is Lacking
While Fundbox works great for a lot of small businesses because of its easy application and qualification process, they do have some drawbacks. Take a look at these aspects of the lender to make sure they’ll still work for your needs.
Limited options: Fundbox specializes in lines of credit. So, you’re out of luck if you need additional financing options like equipment loans, business credit cards, or merchant cash advances. Fundbox recently introduced term loans to their line of small business lending options, but that is only available to select customers at the time of this writing.
Low maximum limit: Fundbox extends lines of credit up to $100,000. It’s enough to meet most small business working capital requirements. However, many competitors offer higher maximum credit limits that can reach up to $500,000. While it would be nice if Fundbox could offer larger sums, this is a sort of trade-off with their lenient qualification standards. You can go elsewhere to get more than $100k, but be mindful of the stricter creditworthiness you’ll have to meet.
Short repayment periods: Fundbox’s lines of credit come in two repayment terms: 12 weeks and 24 weeks. That can be a tight turnaround for companies that are tight on cash and leaning hard on the extra funds they’ve gained from Fundbox. You are also limited to making weekly payments, which can put more strain on making timely repayments. A good deal of other lenders offer terms that stretch between one and three years.
No credit boosting: Fundbox does a commendable job funding businesses with below-average or poor credit. However, Fundbox doesn’t share your repayment history with credit bureaus. That means you won’t notice any improvements to your creditworthiness by repaying your Fundbox line of credit on time. That’s a shame, because it would be a big selling point if this was both a way to secure funding and either repair or build credit history in one package.
Fundbox Options and Pricing
Fundbox primarily focuses on lines of credit, though it has begun to offer term loans (a product offering only available to select customers while it’s in beta). Let’s run through the options you have with Fundbox.
Fundbox Line of Credit
This revolving line of credit means that you replenish your funds as you repay your loan. You can draw from your credit line at any time without incurring fees or charges other than the interest rate.
The qualification requirements for a Fundbox business line of credit include:
- 600+ personal FICO score
- At least six months in business
- $100,000+ in annual revenue
- Business checking account
- U.S.-based business
Fundbox offers two repayment terms: 12-week and 24-week. The borrowing fee depends on the term length and your financial standing. The interest rate for a 12-week term starts at $14.66%, while the interest rate for a 24-week term starts at 8.99%.
Fundbox repayments are made weekly. The lender has a handy calculator to help you discover the exact dollar figure you’ll pay each week, depending on the amount you borrow. You’ll also see how much interest you’ll pay for each draw.
Finally, there’s no prepayment penalty. Therefore, you can pay off your loan before its term to save on fees.
Fundbox Plus (Beta)
Fundbox provides some wiggle room if you want longer repayment terms and lower interest rates on your line of credit. You can access these perks, plus priority support by enrolling in the lenders’ program known as Fundbox Plus.
Borrowers under this program enjoy 20% lower fees, extended repayment terms of up to 52 weeks, and the option to repay your loan once every four weeks rather than weekly. In addition, your first payment is due after 28 days rather than the usual 14 days.
It costs $99 to join Fundbox Plus. You can also cancel your subscription anytime with no penalties or extra fees. However, this program is still in beta, so it’s only accessible to applicants that Fundbox selects, but it is expected to be available to all Fundbox clients soon.
Fundbox Stripe App
Stripe users don’t need to complete a separate application with Fundbox to access working capital. Instead, you can apply for the loan directly and then withdraw funds from your line of credit within the Stripe dashboard with the Fundbox Stripe app. It’s a good collaboration that makes it easier for Stripe customers to gain a line of credit.
If you’re an existing Stripe user, simply go to the Stripe Apps Marketplace, download the Fundbox app, then register and connect your business accounts, such as your accounting software or bank accounts.
The loan application process this way is just as fast and easy as going directly through Fundbox—and you’ll actually get a decision even faster (within just three minutes).
Fundbox Flex Pay
When you open a line of credit with Fundbox, you’ll also get something called their Flex Account which you can use to pay vendors directly, just like you would from a business bank account. You’ll have three business days to repay Fundbox, or the money will be automatically drawn from your line of credit, up to the available credit limit.
It’s a valuable service for automating your most essential bills. Simply copy and paste your Fundbox account details to the vendor’s payment platform and Fundbox automatically pays them when it receives the payment request. Using your Flex Account to pay vendors won’t affect your credit score.
The biggest advantage is you can pay vendors on time even if you don’t have ready cash. It’s also a convenient service if you don’t want to pay vendors directly from your credit card. It’s also a good way to consolidate outgoing payments.
Fundbox doesn’t charge fees for these transactions if you repay with a debit card or ACH transfer. However, there’s a small processing fee if you repay using a credit card. Alternatively, you can repay the funds from your line of credit. In this case, the normal interest charges still apply.
Fundbox in Summary
Fundbox is an excellent alternative lender for small businesses that don’t qualify for traditional term loans from banks. Small businesses and startups have an opportunity to qualify for much-needed working capital despite less-than-stellar credit scores or only being in business for six months or less.
The lender also doesn’t burden borrowers with extra fees like origination fees, inactivity fees, or prepayment penalties. Plus, with predictable monthly payments, it’s easy to project cash flow for your business.
Of course, there are other alternatives to Fundbox if it doesn’t match up with your needs. Lendio is an adaptable provider that can match you up on one of 11 loan types. And if you want other options for getting your funds deposited lightning fast, OnDeck and Bluevine are two great alternatives. Or, just check out our full post on the best small business loans to compare all the top providers in one place.