|Financially Reviewed by Thomas J. Brock|
Fundbox provides insights that help clients optimize cash flow and lending selections by leveraging big data analytics and predictive modeling.
Currently, Fundbox requires a minimum FICO credit score of 600. Although higher than its previous minimum of 500, it’s still one of the lowest available.
Like many newer online lenders, Fundbox keeps its application process simple and streamlined with quick decisions available in a matter of minutes whether you choose a line of credit or term loan. Funds can be made available as soon as the following day.
Fundbox Video Review
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
Fundbox provides two main products: lines of credit and term loans.
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 Interest Rates and Fees
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.|
How to Qualify for a Fundbox Loan?
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|
The Fundbox Loan Application Process
Applying for a loan is surprisingly simple, convenient, and quick. The loan application takes less than 10 minutes. Let's walk through the process step-by-step as described by Gordon Scott.
1. First, Fundbox asks you whether or not you want a Revolving Line of Credit or a One-time Term Loan. You can also choose whether or not you want to repay each draw over 12 to 24 weeks or 24 to 52 weeks
2. Most of the small business lenders usually have you fill out an entire business plan, but that isn't the case with Fundbox. You just have to fill out regular and basic information about yourself.
3. Fundbox also asks for the percentage of ownership you have in the small business you’re getting the loan for, and whether or not you’re a key decision-maker in that business.
4. The next part of the application is filling out your bank information, for obvious reasons. However, when you read the fine print, you realize that it's a two-way street. It's important to focus on what they’re asking.
5. If you’re giving Fundbox access to your bank account activity, and you’re also authorizing Fundbox and its partners to deposit, and more importantly, debit from this account. This means that they are going to put money into your account, and take it out. This method allows them to service the loan without a hitch, and you don’t have to worry about whether or not you have a bad credit score.
6. Fundbox offers 2 different repayment options, either 24 to 52 weeks or 12 to 24 weeks. For a loan of $2000 with a 12 to 24 weeks payment, you’ll be charged $76.83 principal, and $19.50 of interest per week, that's a total of $96 per week. This repayment schedule requires about $312 in interest over the life of the loan. This works out to only 15.6% interest if carried to full term.
If you’re taking the 24 -52 weeks option you’re paying less interest per week compared to the other option. That’s why if you’re taking the 24 - 52 week option, you’ll pay less money if you repay the loan early.
How Does Fundbox Determine Loan Amount?
Once you’ve been approved by Fundbox, your credit limit is determined based on the information you provided in your application. This includes your business checking account, bank statements, credit reports, and/or account software.
Additionally, Fundbox considers several business measures including average monthly revenue, time in business, and transaction volume.
Fundbox Customer Support
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 Loan Reviews
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.
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.
Sometimes small businesses can plan for expenditures. But there are also events and circumstances beyond our control. Short-term funding solutions such as term loans and lines of credit work well for dealing with immediate cash flow needs. Fundbox sets itself apart from the competition by being there when you need them. That means you don’t need to apply for a loan or line of credit until you’re ready.