Fundbox has flexible borrower requirements, making its lines of credit accessible to more business owners.
Fundbox Review 2020: Lines of Credit―Even for Poor Credit
As an approved lender for the SBA’s Paycheck Protection Program (PPP), Fundbox will submit your application directly to the SBA instead of to a third party partner. Join the 100,000+ businesses that have put their trust in Fundbox and get up to 2.5 times your average monthly payroll cost.
The recently funded Paycheck Protection Program offers small businesses a way to meet payroll needs with financial aid from the government. This aid is only being provided through the SBA and its authorized lenders. And businesses can receive a loan of up to $10 million to help cover payroll.
To access this loan, you’ll have to complete an application with an authorized lender that consists of a two-page form in addition to required documentation. If you qualify, you’ll be loaned 250% of your average monthly payroll in 2019.
You may also qualify to have the loan forgiven if no employees are compensated above $100,000 and at least 75% of the money goes to paying workers. If you can’t obtain forgiveness, the loan must be repaid in two years at a 0.5% interest rate after six initial months of interest deferment.
If you think your business would benefit, apply at a Paycheck Protection Program authorized lender.
Business lines of credit (LOCs) provide a great way to smooth over cash flow issues and give you some flexible working capital―but many lenders only offer LOCs to older businesses with great credit, making them inaccessible to many small-business owners.
Fundbox does things a little differently. It has relatively low borrower requirements, meaning you don’t need perfect credit or a years-old business to qualify for its lines of credit.
Want to know more? In this Fundbox review, we’ll explain what Fundbox is, how it works, and why it might work well (or not) for your cash flow needs. Let’s get started.
Fundbox is best for businesses with low credit
The thing we love about Fundbox? It has one of the lowest personal credit score requirements out there. While banks ask for a credit score in the high 600s and even other online lenders look for a credit score in at least the high 500s, Fundbox accepts credit scores as low as 500.
Its other borrower requirements are nice and low too. Fundbox only asks for $50,000 in annual revenue (and it’s willing to flex on that too), and even very young businesses can qualify. Those lower-than-average borrower requirements make Fundbox one of our picks for the best small-business loans.
Qualifying for Fundbox funding
Min. credit score
Min. time in business
Data effective 11/5/20. At publishing time, requirements are current but subject to change. Offers may not be available in all areas.
Now, we do want to point out that if you only meet the minimum requirements, you may get turned down (or at least have a very low credit limit). You’re more likely to get approved with, say, a low credit score but fair revenue and a year or two in business.
You also need to understand that Fundbox does come with some tradeoffs. As you’ll see in the next section, Fundbox has relatively high rates on its lines of credit, and you won’t be able to get a high credit limit.
But considering that Fundbox might offer you financing when other lenders won’t, those downsides may well be worth it.
So how does Fundbox work?
Fundbox funding options
While Fundbox used to offer invoice financing (called Fundbox Credit), it now offers just a business line of credit (formerly known as Fundbox Direct Draw).
Fundbox’s line of credit acts as a revolving form of credit. You have a credit limit, and you can draw funds against that limit. As you repay what you borrow, that amount becomes available to borrow again―over and over (hence calling it a revolving line). You use only what you need as you need it, so you won’t pay fees on money you never actually used.
Min./max. loan amount
Lowest listed rate
|Line of credit||$1,000/$$100,000||4.66% draw fee||12 or 24 wks.||Apply Now|
Data effective 11/4/20. At publishing time, pricing is current but subject to change. Offers may not be available in all areas.
You’ll repay whatever you borrow over a term of 12 weeks or 24 weeks, making weekly payments. Terms of 12 weeks will have higher payments but lower fees; 24-week terms will have lower payments with higher fees. Fundbox will automatically withdraw payments from your business bank account every week.
As we mentioned above, Fundbox’s line of credit has a lower maximum credit limit than you’d get from most other lenders. Its credit lines max out at $100,000. (Other online lenders offer limits of $250,000, while traditional lenders often offer limits going up into the millions.) And your personal credit limit will depend on your qualifications, so your limit could end up being much lower.
But how much will a Fundbox line of credit actually cost you? It’s time to talk about the fees.
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Fundbox doesn’t charge a traditional interest rate. Instead, it charges weekly fees. Your fee rate will depend on both your borrower qualifications and the length of your term. (Longer terms, as we said, have higher fees.)
Here’s how this works out: Let’s say you withdraw $10,000. On a 12-week plan, which will have lower fees but higher payments, you might have a fee of 4.66%. Multiply that fee by the total (10,000 × 0.0466), and you’ll see you have $466 in fees, for a total repayment of $10,466.
If you opt for a 24-week repayment period instead, you’ll have higher fees (but lower weekly payments). So with that same $10,000, you might have an 8.99% fee. That means you owe $899 in fees and $10,899 total.
Withdraw amount × draw fee = total fees
Ex., $10,000 × 0.0466 = $466
Fundbox does front-load your fees, so you’ll pay more in interest during the first month of your repayment term. Your weekly payment will stay the same―but after that first month, more of your payment will go to the business loan principal (your draw amount) than to fees.
That means that, while you can repay your loan early to save on fees (Fundbox will waive any remaining fees), you won’t save nearly as much if you pay after that first month.
Keep in mind that Fundbox will tell you exactly how much you’ll pay in fees before you make a draw, so you don’t have to worry about nasty surprises down the line.
So how do these fees affect APR? Before we answer, let’s brush up on APR.
APR, or annual percentage rate, expresses the total cost of a loan over a year. It includes interest and other fees, like maintenance fees or origination fees. In theory, APR helps you understand how much your loan actually costs you.
Because Fundbox uses drawing fees rather than interest, it doesn’t technically have an APR. Instead, it has what’s known as an effective APR, which serves pretty much the same function as a normal APR.
Here’s the thing about APR: it largely tells you that fees spread over many years cost less each year than the same fees spread over one or two years. If you have a total of $1,000 fees on a loan, but you pay those fees over five years, that’s only $200 in fees each year. That same total over two years comes out to $500 in fees each year.
Sounds obvious when you put it that way, right? Well, keep that in mind as we talk about APR and Fundbox. You’ll see people complaining about Fundbox’s APR, which falls between 10% and 80%.
And sure, that sounds high—and it is when compared to SBA loans that can have APRs between 6.3% and 10%. But mostly Fundbox’s high APR tells you that you’re paying fees over a short period of time (12 or 24 weeks, in this case). It does not necessarily mean you’re getting a bad deal. You have to decide that part for yourself.
Aside from drawing fees, which you’ll know from the beginning, Fundbox doesn’t charge common fees. You won’t pay application fees, origination fees, or early repayment fees on your Fundbox line of credit.
All you have to worry about are late payment fees and NSF fees (non-sufficient funds fees) if your bank account doesn’t have enough money to cover your payment.
Fundbox application process
Think you might want to apply for a Fundbox credit line?
Fundbox doesn’t use traditional applications. Instead, its proprietary process determines your creditworthiness. You simply allow Fundbox to connect to either your accounting software or your business checking account, and it uses the information within to make a decision.
You’ll start by filling out a form with the most basic of details—your name, phone number, and estimated yearly revenue. Once you submit that information, Fundbox invites you to connect either your accounting software or your business checking account.
Once you give Fundbox the log-in details for whatever method you choose, it will look at your transactions and evaluate you as a borrower. This automated process doesn’t require human underwriters, so you can get an answer within minutes.
If Fundbox rejects your funding application, that’s not necessarily the end. If you keep your bank account or software connected to Fundbox, it will periodically check to see if you can get approved.
Note that Fundbox stays connected to your software or bank account until you revoke permission. In fact, Fundbox requires a continual connection to extend you funds. While that might sound scary, Fundbox uses up-to-date security protocols to protect your information, and we haven’t found any consumer complaints of privacy violations or data breaches.
If you get approved, Fundbox gives you a credit limit, and you can start drawing funds. And if you draw before noon Monday through Thursday, you can get your money within just one business day.
Fundbox vs. the competition
Fundbox stands out from the crowd of lenders who offer traditional loans, but it’s not the only company to offer invoice-based financing or lines of credit. Here’s how it compares to some of its biggest competitors.
Fundbox vs. Kabbage
Both Fundbox and Kabbage offer business lines of credit, and they both use automated approval processes to decide whether or not you get financing.
Kabbage does offer higher credit limits than Fundbox—a max of $250,000 vs. $100,000—and longer repayment terms of 6 or 12 months. But you’ll have to have been in business at least 12 months to use Kabbage, while Fundbox finances younger businesses. Plus, Kabbage has higher credit score requirements (a 550 FICO score versus a 500).
If you have an older, more established business, Kabbage’s higher credit limits could be worthwhile. But for younger businesses or business owners with a lower credit score, Fundbox offers the better option.
Fundbox vs. BlueVine
BlueVine, like Fundbox, provides a business line of credit―but it also offers invoice factoring.
BlueVine offers much larger loan amounts (up to $5 million for invoice factoring and up to $250,000 for lines of credit), and it offers low interest rates and longer repayment terms than Fundbox does.
But BlueVine also has higher borrower requirements than Fundbox. To get invoice factoring, you’ll need a 530 credit score and $10,000 in monthly revenue. And to get a line of credit? You’re looking at a 650 credit score and $40,000 in monthly revenue.
Overall, BlueVine probably offers the better value―but given its stricter borrower requirements, many business owners will prefer Fundbox anyway.
Fundbox customer reviews
All this information is well and good, but do people actually like Fundbox after using it? Well, yes. Fundbox has an A+ BBB rating and a 4.7 out of 5 on TrustPilot.1,2
Reviews praise Fundbox’s reasonable cost, easy applications, and fast fund transmission. Interestingly, the few negative reviews complain about some of the same things positive reviewers praise. But they also say Fundbox’s fees cost too much and funds were slow to arrive.
Some reviewers also complain that Fundbox gave them a credit limit that was too low, and a few reviewers said they wish they could repay monthly instead of weekly. If weekly repayment poses a problem for you, Fundbox might not be your cup of tea.
We’ve covered a lot, but not everything. Let’s answer some lingering questions about Fundbox.
Which banks does Fundbox support?
Fundbox claims to connect with over 10,000 banks. We don’t have the full list, but we think you can safely assume Fundbox supports your bank. You’ll find out for sure about two minutes into the application process.
What accounting software does Fundbox support?
Fundbox supports some of the most popular accounting software:
- PayPal Invoices
Will Fundbox ever raise my credit limit?
Yes, Fundbox can raise your credit limit over time—but it’s not a guarantee. Fundbox reviews active accounts from time to time to make sure they have appropriate credit limits. Your chances of getting a limit raise increase if you make payments on time and have lots of transactions in your software or account.
If you have Fundbox Credit, Fundbox also advises updating your bookkeeping regularly to increase your chances at a higher limit. If you use Fundbox Direct Draw, it suggests uploading supplemental documents such as tax returns to further prove your creditworthiness.
Will applying for Fundbox affect my credit score?
Fundbox could have a small effect on your credit score if you get approved for funding. It may conduct a soft inquiry into your credit when you first apply, which won’t affect your score. If you get approved and make a draw, Fundbox might make a hard inquiry, which could affect your score.
Does Fundbox report to credit bureaus?
No, Fundbox doesn’t report payment activity to any credit bureaus. That means that getting and repaying a Fundbox line of credit can’t boost your credit―but it can’t hurt it either.
Fundbox offers very accessible business lines of credit. Its automated application process means you can get approved and funded quickly, even if you haven’t been in business for several years or if you don’t have a perfect credit history.
However, Fundbox does come with high APRs and relatively low credit limits, so some more established businesses may want to look elsewhere.
Want to compare Fundbox to other business LOCs? Check out the lenders on our rankings of the best business lines of credit.
At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.