Need help finding a lender?
- Date Established
- San Francisco, CA
- Borrower qualifications lower than with banks
- The application process is fast and easy
- Low credit score requirements
- Multiple avenues of customer support
- Rates can be expensive
- Repayments are required frequently
Fundbox is a business lender that specializes in offering financial products to small businesses. Founded in 2013, the company initially provided an invoice financing product for small businesses called Fundbox Credit. In 2017, Fundbox introduced a line of credit product.
While Fundbox is not the only service to offer invoice financing and lines of credit, this company stands out because it is super easy to qualify for its products. Fundbox does not require a specific time in business. Fundbox’s low borrower requirements make its services useful for many B2B and B2C businesses, including small businesses and even freelancers. Merchants with poor credit might also find Fundbox’s products useful.
On the other hand, businesses that are well established might want to look at some alternatives. Fundbox’s rates can be a little high in comparison to lenders that service established businesses. Additionally, with a maximum credit line of $100,000, larger businesses will find that Fundbox might not offer as much money as they need.
However, if you’re looking for invoice financing or a line of credit and you don’t yet qualify for financing from another source, Fundbox is certainly worth investigating. Its application process is easy, requesting funds is fast and hassle-free, and borrowers report that the company has great customer service.
Interested in learning more? Read on for the details!
Table of Contents
Fundbox offers these services:
- Fundbox Credit: Lines of credit are similar to a credit card in that you have a set amount of credit that you can use, and when you draw from the line of credit to receive cash, only then will you start to pay interest on the amount borrowed. Fundbox provides revolving credit with a 12- or 24-week repayment.
- Fundbox Net Terms: With Fundbox’s Net Terms service, B2B (business to business) transactions can receive a trade credit. Fundbox pays the business directly and collects the customer’s payment later, and this agreement enables companies to purchase materials needed without having the cash on hand.
Fundbox does not have any specific requirements regarding your time in business. Borrowers must have a personal credit score of 500 or above to qualify for funding. You must also be based in the US or one of these US territories: Guam, American Samoa, Northern Mariana Islands, Puerto Rico, or the US Virgin Islands.
Fundbox also requires that you must have been using a compatible accounting or invoicing software for at least two months before applying. Here is a list of the software compatible with Fundbox:
- FreshBooks Classic
- FreshBooks New
- QuickBooks Desktop
- QuickBooks Online
For Fundbox Net Terms, you must have been using a compatible bank account for at least three months before applying. Fundbox works with over 12,000 banking institutions across the country. If you have both a business bank account and accounting software, Fundbox says:
We assess the health of your business based on your accounting or bank account data. You can choose either, but you should select the one where we can see the best, most complete picture of your business.
Terms & Fees
Fundbox offers two financing products: Fundbox Credit (line of credit) and Fundbox Net Terms (a B2B trade credit). While both services have similar terms and fees, they operate in a slightly different way. Here’s what to expect from each Fundbox service:
Fundbox’s line of credit will work well for B2C businesses that are looking for a line of credit, even those with a low credit score. Any business that has been using a compatible business bank account for at least three months is eligible to apply.
Here are the rates:
|Term Length:||12-24 weeks|
|Borrowing Fee:||Starts at 4.66%|
The amount you are eligible for will depend on the strength of your business’s financials, and Fundbox may increase your credit line in time.
Borrowers can request funds from their line at any time. The funds will be deposited in their business bank account within one to two business days (depending on the time of day the funds were requested). Fundbox does not charge any draw fees or money transfer fees when you request funds. This is a revolving line of credit, which means that your credit line replenishes as you repay borrowed money.
Repayments are made in equal installments over 12 weeks or 24 weeks. The borrowing fee begins at 4.66%, and there is no prepayment penalty — meaning if you pay your loan off before the 12 or 24 weeks are up, you can save on fees.
Use this short-term loan calculator to get an idea of what to expect with Fundbox Credit.
Fundbox’s Net Terms financing is a trade credit/vendor credit system offered for B2B businesses. It’s a type of invoice financing provided to businesses. Businesses get paid right away, and Fundbox assumes the role of collecting payment from the customer.
This service is similar to invoice factoring but is not technically a sale of unpaid invoices. In practice, the most significant difference between invoice factoring and net terms financing is that this loan product must be repaid weekly, not when your customer pays their invoice.
Fundbox offers credit lines up to $100,000. Some businesses may not have access to that much when they first start. However, Fundbox regularly evaluates your account and may increase your credit limit. These are Fundbox’s invoice financing terms and fees:
|Credit Facility Size:||Up to $100,000|
|Advance Fee:||Starts at 4.66%|
|Term Length:||12-24 weeks|
|Factor All Invoices:||No|
|Recourse Or Non-Recourse:||Recourse|
|Notification Or Non-Notification:||Non-notification|
Borrowers have the option of 12- or 24-week term lengths. Each Wednesday (after you’ve had the funds for a week), Fundbox will withdraw the weekly payment plus a fee.
Fundbox advertises that its rates start at 4.66% of the value of the invoice. There is no prepayment fee, so if you pay your outstanding balance back early, you can save some money on fees. Aside from the weekly fees, the only other fees you might run into are late fees. However, Fundbox does not charge origination fees, maintenance fees, or termination fees.
Fundbox has a speedy application process.
Potential borrowers simply need to create an account (which includes entering basic information, such as your name, email, and phone number) and hook up their accounting or invoicing software or their business bank account.
The account you hook up will determine which product you’re applying for. If you hook up your accounting or invoicing software, Fundbox will evaluate your candidacy.
To determine if it can extend credit to your business, Fundbox evaluates the activity on the software or account that you hooked up. Fundbox might also check your credit score during the application process, but it will be a soft pull, which will not affect your credit. If you are approved and request funds from your line, Fundbox might perform a hard pull, which will have a small effect on your score.
Fundbox’s application is fully automated. Most borrowers will receive a funding decision within a few minutes. If you are approved, and you like the rates you’ve received, you can begin requesting funds immediately. Funds generally hit your bank account the next business day, depending on the time of day you make the request (although a couple of users report that it sometimes takes up to three days for Fundbox to process invoice financing draws).
Sales & Advertising Transparency
While the way Fundbox markets its products can be confusing initially, Fundbox provides a large amount of information on its website. The website fully explains the information that potential borrowers will need to know before signing up for its service and is transparent about its terms and fees.
Customer Service & Support
Fundbox has several support options, including phone support, email, and a support center. The support center is basically a well-developed FAQ that explains everything you need to know about Fundbox, including troubleshooting. There is also a more general FAQ section on the Fundbox website that covers basic information, such as borrower requirements and fees. Most customers cite positive experiences with Fundbox’s customer support. In my experience, phone wait times were short, and representatives were helpful.
Negative Reviews & Complaints
Overall, Fundbox has an excellent online reputation. While there are a few negative reviews, the majority of customers are pleased with the company’s service. However, there are still a few recurring complaints from customers:
- Credit Limit Too Small: The most common complaint about Fundbox is that the borrowing amount is too low. Fundbox does periodically review your account and increases credit limits for customers who have a good financial history. However, some customers have complained that the credit increases don’t come fast enough, and they don’t know when their account is going to get reviewed again.
- Too Expensive: Other customers have voiced concerns about the expensive capital. While Fundbox’s fees can be a little high, they are competitive with similar lenders. Before settling on Fundbox, you might want to see if you qualify for other lines of credit that are less expensive (but might be more difficult to qualify for).
Positive Reviews & Testimonials
Despite the few complaints above, customer reviews of Fundbox are overwhelmingly positive. The company receives 4.7/5 stars on GetApp (based on 60+ ratings) and 5/5 stars on Trustpilot (based on over 1,600 ratings). Here is what customers like about Fundbox’s service:
- Fast & Easy Application Process: Users appreciate how easy and quick the Fundbox application is and how fast it is to receive funds.
- Low Borrower Requirements: Fundbox users appreciate the low borrower requirements, including no time in business requirements and a minimum credit score of 500.
- Great Cash Flow Solution: Many businesses praise Fundbox for being a great cash flow solution. Instead of waiting for customers to pay their invoices, businesses can have immediate cash to continue functioning and avoid the waiting game.
- Good Customer Support: A large handful of users also praise Fundbox’s level of customer support.
Additionally, Fundbox Credit is a little bit different from other invoice financing products because the company funds 100% of the invoice. (Most will only advance 80%-90% and hold the rest on reserve until the invoice is paid.) Some customers like this because you get access to that much more money.
Customers have predominantly positive things to say about Fundbox, and it’s easy to see why. Fundbox provides two useful financial products that are suitable for many small B2B and B2C businesses, whether they’re suffering from cash flow problems, want a credit line for emergencies, or some other reason.
As stated above, larger businesses will find that other companies offer invoice financing or lines of credit with lower fees and higher borrowing amounts. But if you don’t qualify for those options, Fundbox is a good bet.