Fundbox VS Kabbage: Comparing Funding Options For Your Business
Both offer value to small businesses that may not qualify for traditional financing options. Which is best depends on annual income, credit score, and business type.
Kabbage and Fundbox are two leading alternative lenders offering small business lines of credit as well as other small business financing solutions. While the two have similar product offerings, there are some significant differences to pay attention to.
One thing to know is that Kabbage has recently resumed lending after putting its funding services on pause in 2020 following the end of the PPP program and Kabbage’s subsequent acquisition by American Express. Though Kabbage Funding applications are now open, many businesses — perhaps those that didn’t have a good experience with Kabbage’s PPP loans — may be interested in Kabbage alternatives, such as Fundbox.
In this post, we’ll compare Fundbox vs. Kabbage side-by-side, breaking down the features of each to help you decide which line of credit is best for your business.
Table of Contents
Fundbox VS Kabbage: Quick Comparison
|Borrower Qualifications||6 months in business, 600 FICO, $100K in annual revenue||12 months in business, 640 FICO, $3,000/month in revenue|
|Term Length||Up to 24 weeks||Up to 18 months|
|Best For||Startups, fair credit||Established businesses, good credit|
Fundbox VS Kabbage: In-Depth Comparison
Let’s take a closer look at Kabbage vs. Fundbox, comparing these two alternative lenders’ services, qualifications, terms, fees, and applications.
Services Offered By Fundbox & Kabbage
Through Kabbage Funding, you can receive a line of credit of up to $250,000 to cover business expenses. The performance of your business determines the size of your line.
Fundbox also offers revolving lines of credit up to $150,000. Like Kabbage, Fundbox’s lines of credit are based on your particular business credentials. One cool thing about a Fundbox line of credit is that it comes with a Flex Pay account that you can use to pay vendors directly.
With either lender, there are no restrictions on how you use your funds. You can use your line of credit to purchase inventory or supplies, cover payroll, pay operational expenses, expand your business, or take care of an emergency.
In terms of other services offered, Kabbage also provides business checking and online invoicing services. Fundbox additionally offers short-term loans to small businesses.
Qualifying for Kabbage is easy for most small business owners. To qualify, you must meet some minimum requirements:
- At least 12 months in business
- At least $50,000 in annual revenue
- 640+ FICO score
- Have a business checking account
Qualification for Fundbox is based on the product you select. For the Fundbox line of credit, you must meet the following requirements:
- At least six months in business
- At least $100,000 in annual revenue
- 600+ FICO score
- Have a business checking account
It’s easy to see that both Kabbage and Fundbox have more lenient requirements than other lenders. However, Fundbox is more friendly to startups. With Kabbage, you must be in business for at least a year. On the other hand, Fundbox requires a higher business income.
Fundbox & Kabbage: Terms & Fees
Both Kabbage and Fundbox have transparent fee structures and relatively short repayment terms. Fees for either lender will usually be higher than those of traditional lenders, though they’re typical for short-term online business lending products. The fees charged by Kabbage vs. Fundbox are pretty comparable overall; Kabbage fees appear lower at the outset, but you’ll be paying them over a more extended period.
With Kabbage, each draw on your line of credit is structured as an individual short-term loan. Kabbage monthly fees range from 0.25-3.50% for six-month loans, 0.25-2.75% for 12-month loans, or 0.25%-2.50% for 18-month loans. If you pay your loan off early, there are no prepayment penalties, and you will eliminate any remaining fees, so this is a good way to save money.
Other than the monthly fee, there are no hidden fees or additional costs to make a draw from your Kabbage line of credit. If you do not use your funds, you will not pay any fees.
Moving over to Fundbox, this lender has you repay your loan via fixed weekly payments over 12 or 24 weeks. So you’ll repay your loan quicker than you would with Kabbage. Fees start at 4.66% for 12-week terms and 8.99% for 24-week terms and are added to each weekly repayment. You also have the option to pay your balance off early without penalty and save on those weekly fees.
There are no additional fees to use Fundbox’s Flex Pay vendor payment service; you will just need to repay Fundbox for those withdrawals within three days via your bank account or credit card. Otherwise, an automatic draw from your line of credit will be created.
Kabbage and Fundbox have similar application processes. Both are automated and easy and can provide you with instant approvals.
It’s possible to apply for a Kabbage line of credit in just minutes with the lender’s easy online application. (Although a decision can come in a few minutes, there’s no guaranteed time length for how long it will take.) Once you’ve determined that you meet all minimum requirements, you can start the application. This requires basic information about your business, including your business’s name, address, and phone number. There is also a section where you can link your business accounts so that Kabbage can evaluate your business financials. Note that the application goes even quicker if you have an American Express account since you can use your Amex login and not have to create a separate Kabbage login.
After Kabbage’s preapproval, you will be required to provide Kabbage with more sensitive personal information, including your Social Security Number. At this point in the process, Kabbage performs a hard pull on your credit.
Once you’ve submitted all your information, you’ll receive a notification of your approval status at some point. If approved, you’ll be taken to your Kabbage Dashboard, where you can view your available credit facility and initiate draws. You can make a draw up to and including your credit limit immediately, but there is no obligation to withdraw funds at this time.
Fundbox has a very similar application process. Start by signing up on the website with your name, business email, phone number, and password. You will also be required to select the annual revenue of your business and link relevant accounts so that Fundbox can analyze your business performance. During the application process, a soft pull on your credit is performed. This will not affect your credit score. However, if you are approved for a line of credit and take funds, a hard pull may be performed.
Most borrowers will know within minutes if they are approved and the amount of the credit line. Once approved, you’ll be able to request funds immediately. Those funds will hit your bank account within one to three business days. Your linked bank account will be used for automatic drafts of your weekly payments.
Which Lender Is Best For Your Business: Fundbox Or Kabbage?
While Kabbage and Fundbox appear similar on the surface, there are a few clear differences that can help you make your choice between the two. The biggest differences to note include:
- Kabbage payments are made monthly, while Fundbox has a weekly repayment schedule
- Kabbage requires 12 months in business, while Fundbox only requires six months
- Kabbage requires a monthly income of $3,000, while Fundbox requires an income of $100K
- Kabbage requires a 640 FICO; Fundbox requires a 600 FICO
- Kabbage repayment terms are longer than Fundbox’s
- Fundbox lets line of credit holders pay vendors directly, while Kabbage does not
Choose Kabbage If…
- You feel more comfortable making monthly payments
- You’ve been in business for at least one year
- You want repayment terms up to 18 months
- You have good credit
Choose Fundbox If…
- You’d prefer to make weekly payments instead of one larger monthly payment
- You’ve been in business for less than one year
- You want to pay your vendors directly with your line of credit
- You have fair credit
Kabbage and Fundbox offer value to small business owners who may not qualify for traditional business financing options. Although the cost of borrowing may be higher than other financial products, the speed of approvals and transfers, the ease of application, and the low borrowing requirements may be worth the extra expense for the business owner seeking fast funding.
Want to look at some other options? Here’s some information on Kabbage and Fundbox alternatives:
- Compare The Top 9 Alternatives To Kabbage
- The 6 Best Alternatives To Fundbox Small Business Loans & Lines Of Credit