|Financially Approved by Thomas J. Brock & Written by Gordon Scott|
When applying for a loan with Fundbox, you can expect to go through five different stages: filling out the application form, analyzing the terms, funding the loan, paying back the loan, and the aftermath of the loan. Gordon Scot, our CMT expert applied for a $2,000 loan and described each of these stages in detail. Find the full Fundbox review video and all the details down below.
Fundbox Review Video
The Fundbox Loan Application Process (Rated - 4.5/5)
When applying with Fundbox, keep in mind that the platform does perform a soft credit pull, unlike many other lenders who do a hard credit check that negatively affects your credit score.
The loan application process is fast and simple, you will be able to fill out the application within 5 minutes and receive the response as quickly as 6 minutes later. Let's walk through the process step-by-step as described by Gordon Scott.
1. Filling out your application form
When filling out your application form, you need to specify whether you need a revolving line of credit or a one-time term loan. You can also choose whether you want to repay each type of funding over 12 to 24 weeks or 24 to 52 weeks.
In addition, you will need to provide some basic information about yourself, such as your identification, business name, business address, and more.
Finally, you are required to share some information about the business owners, including the percentage of ownership you have in the small business, as well as whether or not you are the key decision-maker. The good news is that, unlike other lenders, Fundbox doesn’t ask you to provide a complete business plan, which makes the application process so much easier.
When applying for a small business loan with Fundbox, don’t be surprised if the application asks you to provide the banking information of your business. When issuing the loan, Fundbox will electronically transfer the money directly to your bank account, but it is a two-way street.
Make sure to read the fine print carefully and focus on what the platform is asking. In a nutshell, when you complete the application process, you are giving Fundbox and its bank partners continuing access to your bank account activity. In addition, you are authorizing Fundbox and its partners to deposit in your account and, more importantly, debit from the same account.
This means that Fundbox is going to deposit the money electronically into your account and withdraw pre-determined payments according to their regular schedule. In fact, this is what Fundbox is built on, if they are able to take out the payments to repay the loan in accordance with their schedule, they can provide you with a quick loan, even if your credit score is far from perfect. In fact, Fundbox can issue the loan automatically in a matter of minutes, just remember that it comes as a package deal.
2. Analyzing Repayment Options
With Fundbox, you can choose between two different options for payback - each with its own interest rate. As such, you can repay the loan either on a 52-week schedule or a 24-week schedule.
24-Week Repayment Schedule
Firstly, let us take a closer look at the terms associated with a 24-week repayment schedule. As such, during weeks 1 through 12, Fundbox will charge a certain amount of principal along with a certain amount of interest, which comes up to a fixed weekly repayment amount. During weeks 13 through 24, the principal and interest portions change, yet the total weekly repayment remains fixed
In the case of a $2,000 business equipment loan, the total payment per week equals $96. This means that you would need to pay approximately $312 in interest over the 24-week lifetime of the loan, which translates to around 31%.
While this may seem like a quite high interest rate, keep in mind that this rate is annual. The actual amount of interest you are going to pay is only 15-16% of the total loan amount.
52-Week Repayment Schedule
With the 52-week repayment schedule, the principal fees and the total per week are different. For a $2,000 loan, you can expect to pay the weekly interest fee of $13.50 for the first 26 weeks.
Keep in mind that since the interest rate is charged weekly, you could reduce the total interest fee by paying off the loan early. For example, with the 52-week repayment option, you end up paying less interest per week, as compared to the 24-week option. So, if you choose the 52-week repayment schedule and repay the loan early, you would end up paying less money in interest fees than if you chose the 24-week schedule right away.
3. Funding the Loan
With Fundbox, receiving the funds is quite simple. Once your application is approved, the money will be deposited directly into your bank account. However, there are a few things to keep in mind during the process.
Once you complete the loan application and approval process, you won’t automatically receive the loan. Before the loan funding process can begin, you need to agree to Fundbox’s Terms and Conditions. If you are taking some time to think about moving forward with the loan, you can expect to receive a personal email from a Fundbox customer service representative to see whether they can be of any help. The representative will provide you with a phone number to reach out to in case you need further clarification on what you can expect during the process.
For example, one thing some people might not realize is that the first payment will be taken out of their bank account five days after the loan is funded. After that, Fundbox will automatically take their payments every week. So, as long as you have the money in your bank account, you don’t need to worry about repaying the loan on a weekly basis, - Fundbox will take care of it.
4. Paying Back the Loan
When paying back the loan from Fundbox, you can simply let the automatic schedule take over, when the interest fee is charged weekly. However, you might want to select a 52-week option and pay it off early to minimize the number of interest charges. This way, you will end up paying a minimal amount of interest and receive a greater return on investment.
5. The Aftermath of Taking the Loan
Many people applying for a loan are concerned about two things: whenever or not the credit score would be negatively affected and whether or not they would be able to make profits with the loaned money. In our example of taking a loan for equipment purchase, the story had a happy ending:
- No credit hit. Fundbox performed only a soft credit pull, with no impact on the credit score.
- Profits: The applicant was able to double the amount that he has taken the loan for. Even after paying a small amount of interest, he ended up with considerable profits.
|For Application Process, Fundbox scores a default rating of 4.5, which is indicative of its lack of any cumbersome informational requirements or cutting-edge offerings.|
After breaking down the application process, let's explore Fundbox's key parameters in more detail.
What is Fundbox?
Fundbox is an online lender that offers financial products to small businesses. Since its launch in 2013, Fundbox has worked with nearly 300,000 small businesses. The company also ranked in the Forbes Top 500 Best Startup Employers for 2021.
Fundbox creates a simple, automated process through its platform with minimal documentation. While its streamlined lending process is a key point of differentiation from its competition, they actively communicate with customers.
Fundbox Advantages and Disadvantages
Discover the various advantages and disadvantages of availing a loan from this company to ensure that the financing method is a good fit for your business needs.
- Short Application Process: Fundbox’s application process is simple and straightforward. As noted above, you fill out some basic information and then connect your accounting software and/or business checking account. Approval decisions are often made within minutes.
- Funds Disbursed Rapidly: Once the application is approved by Fundbox and the borrower accepts the terms, funds can be made available as soon as the next business day.
- Low Minimum Credit Score Requirement: Fundbox requires a minimum FICO credit score of 600 which is relatively low compared to similar lenders.
- No Additional Fees: Apart from the interest that is charged on loans, there are no additional fees that you need to pay such as registration and origination fees. Similarly, there are no prepayment penalties.
- No Monthly Minimums: There are no monthly minimums that you need to worry about. The repayment is completed on a weekly basis and funds are automatically debited from your account.
- Automatic Debiting: Fundbox allows for automatic debiting to make payments. You will receive a notice each week with the amount of funds to be debited. As long as funds are available in your account, you will avoid any missed payments.
- High-Interest Rates: Fundbox’s interest rates are higher than similar lenders. For instance, the initial interest rate for 12-week term lines of credit starts at 4.66%. Your actual rate could be much higher based on your credit score and other factors. These rates are quite high and could eat into your profits.
- Relatively Small Credit Limit: The amount that you can borrow from Fundbox financing is lower when benchmarked to the market average. The maximum amount that you can typically borrow from the company is $150,000. On the other hand, several lenders in the market offer loan amounts of up to $500,000.
Fundbox Loan Options (Rated - 1.3/5)
As of the publication of this article, Fundbox is no longer accepting Paycheck Protection Program (PPP) applications.
Line Of Credit
Lines of credit act as short-term funding sources for small businesses. They provide on-demand access to funding that scales up or down with your needs. You can borrow as much or as little as you need, paying interest only on the open balance. As you repay your loan, your available credit replenishes.
|Term Length||12-24 Weeks|
|Min-Max Amount||$1,000 to $150,000|
Term loans are one time loans that you can pay back over longer periods of time than lines of credit. You receive one lump sum that you repay over time. Small businesses choose term loans for one-time upgrades or investments such as new equipment.
|Term Length||24 or 52 Weeks|
|Min-Max Amount||$1,000 to $150,000|
|Fundbox has a 1.3 for Loan Options. This unusually low score reflects relatively short loan terms (< 6 months) and low loan limits (< $250K), which are at the low end of the rating spectrum. It also reflects Fundbox’s fairly inflexible repayment options (weekly or daily, but nothing longer).|
Fundbox Interest Rates and Fees (Rated - 4.3/5)
Although Fundbox makes its loan process fairly easy, its rates do tend to run higher than competitors and traditional banks.
Line of Credit Rates and Fees
|Late Payment Fees||Yes|
|Interest Rates||4.66% for 12 Week Terms and 8.99% for 24 Week Terms|
Term Loans Rates and Fees
|Late Payment Fees||Yes. Late payment fees are added to the end of the payment plan.|
|Interest Rates||8.33% for 24 Week Terms and 18% for 52 Week Terms.|
|Fundbox scores a 4.3 on Interest Rates & Fees. This very high score reflects the average of the following measures: 5.0 for no borrowing fees, 4.0 for no prepayment fees, 3.0 for modest late payment fees, 5.0 for no maintenance fees, 4.0 for a relatively low minimum interest rate, and 5.0 for the lowest possible maximum interest rate.|
How to Qualify for a Fundbox Loan? (Rated - 4.3/5)
Fundbox lines of credit and term loans may require you to sign a personal guarantee upon approval of your application or at a later date. Personal guarantees state that if the business is unable to repay the loan, you will be responsible to resolve any outstanding balance.
Additionally, Fundbox may require a lien on your business as a condition for the loan. These arrangements don’t ask for a specific item to be used as collateral. However, if your business defaults on payments, Fundbox can pursue your business’s assets as compensation for the remaining sum.
Currently, Fundbox requires a business checking account to qualify for a line of credit. Additionally, you will need to provide two months of activity in a supported accounting software or three months of transactions in a business bank account.
|Criteria||Less Than $100,000 Loan||More Than $100,000 Loan|
|Minimum Credit Score||600||600|
|Minimum Annual Revenue||$100,000||$100,000|
|Minimum Time in Business||6 Months||6 Months|
|On Qualification Leniency, Fundbox boasts a 4.3. This stellar score reflects the average of the following measures: 4.0 for a very lenient credit score requirement of 550-600, 4.0 for a minimum annual revenue requirement of only $75K-$100K, and 5.0 for a best-in-class business history requirement of < 6 months.|
Fundbox Customer Support (Rated - 5/5)
Fundbox prides itself on delivering excellent customer support. Although they operate as an online lender, customers can reach live representatives fairly easily.
Telephone support is available Monday through Friday from 8AM - 8PM EST. You can also contact them through email or through its online dashboard.
They also support social media communication including Twitter direct messaging.
To supplement its personal support, Fundbox provides a robust help center to answer common questions. Here you will find information categorized by topic such as choosing between a term loan or credit line. This area also includes helpful information about connecting your accounting software to Fundbox. You can also use the search bar on the screen to find specific topics.
Additionally, their resource center, available through the main website, includes a wide array of blog posts and guides. Here you’ll find curated content on everything from the people behind Fundbox to accounting and tax tips.
|Fundbox has a perfect 5.0 on Customer Support. It earned 1.0 point for each of the following service offerings: access to live CSR Rep, standard call center support from 9:00-6:00 EST, expanded call center support, multi-channel support, and supplemental information and tools.|
Fundbox Loan User Reviews (Rated - 4.6/5)
Fundbox receives high marks across various review sites.
Merchant Maverick gives Fundbox 4.5 out of 5 stars, highlighting Fundbox’s sales transparency and service as key points of differentiation. The review also notes the speedy application process and funding compared to similar online lenders.
Trustpilot rates Fundbox 4.7 out of 5 stars across 2,689 customer reviews. Across multiple reviews, users comment on the friendly customer service, ability to easily reach someone when needed, as well as the overall simplicity of the company’s application process and account management through the online dashboard.
What’s interesting to note is that most of the complaints found on Trustpilot center on applications that were not approved or were delayed during the height of the pandemic. Several of them relate to Paycheck Protection Program (PPP) loans, which the company no longer offers.Otherwise, there are few current customer complaints. The lower reviews that are posted generally see a response from Fundbox in less than 24 hours.
On the Better Business Bureau (BBB) website, Fundbox receives 4.58 out of 5 stars across 121 reviews and an A+ rating.. Notably, Fundbox closed 12 complaints in the last 3 years and 5 in the last 12 months. This highlights some of the challenges noted in the Trustpilot reviews related to the PPP loans and delays during the pandemic.
|Fundbox has a stellar User Reviews rating of 4.6. It reflects the average rating from 3 independent user review sites, including a TrustPilot score of 4.7.|
Interesting Facts About Fundbox
In browsing Fundbox’s website, you come across some interesting facts and tidbits.
For example, 70% of customers that choose a line of credit draw on that credit line three times or more.
It’s also worth mentioning that eligible customers can renew their loan without reapplying. Once 50% of the loan has been repaid, Fundbox automatically checks your eligibility for additional financing at no cost nor does it affect your credit score.
Fundbox makes a point of protecting and securing customer privacy. They clearly state they do not retain information from the loan application process nor do they sell any information to third parties.
Lastly, customers should be aware that Fundbox may review your account periodically from credit limit adjustments. Although these reviews are automated, they will contact you if and when you are eligible for a credit limit increase.
Fundbox offers discount on weekly fees. For some holidays and other occasions, Fundbox sends out coupons that are automatically applied to your next draw fees. Plus, if you pay your outstanding draw in full before the payment term ends, Fundbox will waive all remaining fees for the unused weeks.
All in all, if you are looking for a quick and easy loan application process, Fundbox is the ideal lender for you. You have a chance of being approved even if your credit score is poor. Once you prove to Fundbox that you, indeed, are able to repay the loan quickly, you will be offered more money at a lower interest rate the next time you apply. Shortly after you pay back your first loan, you can expect to receive an email offering you a larger loan at more favorable terms. So, the more you work with Fundbox, the better your terms become.