Fundbox stands out as an excellent choice for startups and small businesses that find themselves constrained by the conventional loan approval hurdles of traditional banks.
Unlike many other lenders, Fundbox maintains more lenient credit score prerequisites, allowing for easier application and approval. While it’s important to note its higher cost structure, Fundbox remains a rapid and user-friendly financing solution for enterprises of modest proportions. Below is our comprehensive Fundbox review that details its advantages and potential drawbacks.
Fundbox is a digital lending platform that extends small-scale business loans to entrepreneurs aiming to swiftly bridge cash-flow shortages. The platform facilitates quick access to a credit line, potentially within the next business day. The company is known for its not-so-strict requirements, enabling even those with poor credit or a limited business history to secure funding.
Similar to credit cards, lines of credit allow the borrower to make multiple withdrawals up to the credit limit sanctioned by the lender. Interest starts upon withdrawing funds from the credit line, as opposed to the entire borrowed amount.
Who is Fundbox for?
If you fit the following criteria, Fundbox might be right for your small business.
Individuals with a low credit score. Fundbox’s prerequisite for eligibility is accessible to a lot of applicants with a low credit score. In addition to that, they offer a streamlined experience without needing massive amounts of documentation. So if you fit those criteria, then Fundbox is a good option for you.
Another is entrepreneurs who only need a small amount. For business owners that need urgent cashflow of up to $150,000, Fundbox is a good option.
Lastly, Fundbox will be right up your alley if you can repay quickly. Businesses that possess a comfortable revenue cushion to manage the payment terms set by Fundbox are suitable candidates for this lending option.
With that said, if you are well-qualified with an excellent credit score, you might want to look at other loan options with better payment terms and lower interest rates. Also, since Fundbox has a $150,000 cap on their line of credit, it’s not a good option for your business if you need quick funds to cover large purchases or expenses,
Fundbox Loan Details
Fundbox exclusively provides business lines of credit up to $150,000, contingent upon data derived from their business checking accounts, accounting software, and credit reports. Repayments are scheduled on a weekly basis, and borrowers have the flexibility to opt for either 12- or 24-week repayment terms.
- Loan Amount: Up to $150,000
- Estimated Annual Percentage Rate (APR) Range: 10% to 80%
- Fees: No application fee, account maintenance fee, inactivity fee, or origination fee. There are no prepayment penalties. Late payment and non-sufficient funds fees may apply in specific instances, as outlined in your loan agreement
- Terms: Choose from 12 or 24 weeks
- Repayment Schedule: Weekly
- Funding Speed: Gain approval as swiftly as the same day, with funds arriving the following business day. Please note that processing times may extend slightly on weekends or holidays and can also be contingent on your bank’s policies.
How to qualify for a loan
The following are required to qualify for a Fundbox loan.
- Credit Score Requirement: 600 or above
- Business Tenure: A minimum of six months, although Fundbox may assess applications from newer businesses
- Annual Revenue: $100,000 or greater
- Business checking account
- Your business must be located within the United States
How to apply for a loan
Applicants can initiate their line of credit application via the Fundbox website.
- Account Creation: To kickstart your application, navigate to the “Apply” section on the Fundbox website. Here, establish your account by furnishing key details such as your business’s inception date and its average monthly revenue over the preceding three months.
- Account Connection: Proceed to connect your business accounts by following the application guide. This includes linking your checking accounts, accounting software, or other pertinent tools that offer insights into your business’s financial status.
- Approval: Typically, the approval process is swift and can be completed in as little as three minutes. Fundbox conducts a soft credit inquiry as part of its evaluation, ensuring that your credit score remains unaffected when applying for a line of credit.
- Access Funds: Following approval for your line of credit, log in to your account and request a draw through the user dashboard. At this juncture, Fundbox carries out a hard credit inquiry, which will be noted on your credit report. Usually, funds are deposited within two business days after the draw request.
The Good and the Bad
Below, we look at some of the things that Fundbox does excellently, as well as their shortcomings.
Fundbox is an excellent solution for businesses in need of rapid access to working capital. The online application process is straightforward; you provide essential business details and link your Fundbox account to your business checking account or accounting software. Upon approval, you can promptly request funds. Fundbox transfers the funds to your bank account, with disbursements often arriving as soon as the next business day.
Fundbox boasts more lenient qualification criteria when compared to many other small-business lenders, whether traditional or online. While numerous lenders mandate a minimum of one year in business to secure financing, Fundbox requires only a few months of business operation. This feature renders its line of credit an attractive choice for startup enterprises.
Furthermore, even if you have a less-than-ideal credit score, you may still meet the criteria for a Fundbox line of credit-they only require a credit score of 600. Fundbox evaluates your application using data from your credit report and connected financial services, such as your business checking account and accounting software.
Now, not everything is great is with Fundbox. Here are some of the things where they fall short.
Fundbox’s line of credit comes with an APR ranging from 10.1% to 79.8%, which surpasses the rates of traditional banks and some online lenders. This line of credit necessitates weekly repayments with fees that are distributed across these installments. Unlike certain online lenders that offer monthly payment options, Fundbox exclusively provides weekly payments. Additionally, the maximum repayment period of 24 weeks is relatively brief compared to some of its competitors.
While Fundbox does offer flexible lines of credit, it doesn’t provide other financial products like equipment financing or SBA loans. Although Fundbox is in the process of introducing a term loan, this option is not yet accessible to all customers. Furthermore, Fundbox caps its financing at $150,000, which may pose challenges for businesses requiring larger investments. If you seek different types of business loans or need access to a more substantial credit line, you may need to explore alternative lenders.
Fundbox does not report your payment history to commercial credit bureaus, which means your timely payments won’t contribute to building your business credit profile. To establish a strong business credit history and potentially qualify for loans with lower interest rates in the future, you’ll need to seek out alternative financial products.
Fundbox offers a quick and accessible solution for businesses in need of expedited working capital. While it can be more expensive than traditional lenders due to its APR range of 10% to 80%, Fundbox’s flexible eligibility criteria make it a viable choice, especially for startups and those with lower credit scores. The mandatory weekly repayment schedule and relatively short maximum repayment term of 24 weeks may not suit every business’s cash flow needs. Additionally, Fundbox’s offerings are primarily centered around lines of credit, with limited alternatives and a maximum funding cap of $150,000.
It’s worth noting that Fundbox does not report to commercial credit bureaus, which can be a drawback for businesses looking to build credit. While Fundbox has its limitations, we recommend it for its swiftness and accessibility, making it particularly suitable for businesses in need of rapid financial assistance, who may not qualify for loans from more traditional sources.