Fundbox Review: Fast, Easy but Costly Line of Credit

What makes Fundbox shine

Fundbox helps small businesses get loans quickly through a streamlined online application and fast approval process that takes minutes. Businesses can get cash as soon as the next day, which is especially useful for those in need of cash flow to cover immediate needs like business equipment, inventory or payroll. Here are a few more ways Fundbox shines.

Flexible payment options

Each time you draw funds, you can choose your repayment plan without a prepayment fee. If you upgrade to a Fundbox Flex Pay membership ($99 per month), you can pay off Fundbox credit draws with an extra three days to repay, interest-free. And, Fundbox Plus gives you a 20% discount on fees.

Customer support

While Fundbox is an online lender without brick-and-mortar locations, it’s easy to contact for help via dashboard, email, X (formerlyTwitter) or phone. It offers telephone support on weekdays from 8 a.m. to 8 p.m. ET. Plus, it offers a comprehensive help center organized into various categories, like how to choose between a term loan and a credit line.

Educational resources

Fundbox features guides on its site detailing how business loans and grants work, financial planning guides and advice for business growth. It also has a podcast called The Small Business DNA, featuring business owners and industry experts sharing insights on managing and growing a small business.

Where Fundbox falls short

Fundbox uses a flat fee instead of interest on its lines of credit, which makes it difficult to tell exactly how the cost compares to a bank loan or credit card, which often advertises costs with an APR. When we did the math, we found that most borrowers can expect to pay the equivalent of around 35% APR or higher. For comparison, Bluevine’s business lines of credit start at around 6.2% APR.

It also front-loads the fees during the first half of the repayment term. Even without prepayment penalties, you can’t save much by paying it off early.

Before the pandemic, Fundbox offered a term loan in addition to its line of credit. It has since discontinued that product, leaving businesses without any other funding options. Plus, its line of credit is capped at $150,000. If you frequently need more cash flow than that, you’ll need to explore other business loan options.

Fundbox features

Fundbox offers a few features to help businesses along. Here’s a snapshot:

Fundbox line of credit

Fundbox doesn’t charge interest on its lines of credit. Instead, it charges a fixed weekly fee, which you pay on each withdrawal. Here’s how it works:

• Each withdrawal turns into a short-term loan with a 12- or 24-week term.
• Fees start at 4.66% per week for the 12-week term and 8.99% per week for a 24-week term.
• Borrowers pay the majority of the cost during the first third of the loan term.

There are no origination fees, draw fees or prepayment penalties. But the front-loaded fees mean you likely won’t save much by repaying your loan early. That is, unless you make extra payments within the first four weeks of a 12-week term or eight weeks of a 24-week term.

Fundbox Flex Pay

Flex Pay helps businesses that need more flexibility and peace of mind to cover large, time-sensitive costs debited directly from their bank account. With Fundbox Flex Pay, Fundbox provides funds from a dedicated Flex Account so you can pay your vendors immediately.

FundBox gives businesses a three-day grace period to determine how to repay. You can choose to repay directly from your bank account or debit card without fees, with a credit card with processing fees or wait for the outstanding expense to automatically continue as a draw on your credit line, up to your available credit limit. As long as you repay by ACH within three business days, there is no fee for using Flex Pay.

Fundbox Plus

A Fundbox Plus membership is $99 per month and gives you additional perks and benefits to borrow up to $150,000. You get a 20% discount on fees and more flexibility to repay your loan. If you make several draws, the 20% discount on fees could make the membership worth it.

While Fundbox’s basic line of credit offers a 12- or 24-week term, those with Fundbox Plus can opt to extend their repayment plan to a 52-week term. They can also choose to make weekly or monthly repayments and will get 28 days to start making those payments after a draw.

To find out if you’re eligible for Fundbox Plus, you’ll need to contact them directly, as the membership has been in its beta stage for a while.

Fundbox product details

To see how much your business might pay every month, use our business loan calculator.

How to qualify for a Fundbox business loan

You and your business must meet the following criteria to qualify for a Fundbox line of credit — at a minimum.

• Personal credit score of 600 or higher
• At least $100,000 in annual revenue
• At least three months of transaction history in a business checking account, but preferably at least six months in business

Just meeting these requirements might not be enough to get approved. Fundbox COO Cetin Duransoy told Finder in an interview, “Our solutions are purpose-built to meet the unique needs and pain points of business-to-business (B2B) businesses, like waiting to get paid, covering payroll and investing in growth. Our customers are typically B2B small businesses with 20 employees or fewer, with annual revenues of up to $1 million.”

Generally, Fundbox prefers to work with borrowers with at least a 650 credit score and $250,000 in annual revenue. The lowest rates typically go to business owners with a credit score of 700 and companies with at least $500,000 in annual revenue. However, if your credit score is an issue, you may look into business loans that don’t require a credit check for approval.

How to apply for a Fundbox loan

Follow these steps to apply for a loan from Fundbox:

1. Visit the Fundbox website and register for an account.
2. Provide basic information about your business.
3. Connect your bank account and accounting software.
4. Submit your application.

After you submit the application, Fundbox processes the information and gives you an offer, if approved. Fundbox only runs a soft credit check when you first apply for a line of credit. But it runs a hard credit check when you make your first withdrawal.

While you’ll need your login credentials to connect accounts, Fundbox doesn’t store that information. It also uses Norton to make sure the site isn’t compromised and your information is protected. If you’re in the mood for less paperwork, you may look into a no-doc business line of credit instead.

How Fundbox compares to other lenders

Fundbox lines of credit work a lot like those available through OnDeck and Bluevine, but there are a few small differences.

OnDeck offers higher credit limits and instant funding on its credit lines, meaning you could receive your withdrawal within minutes. But it may be more difficult to qualify, and it’s not completely paperwork-free.

Bluevine offers higher credit limits and has a lower APR than Fundbox. But it has a higher credit score, time in business and revenue requirements.

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Fundbox reviews and complaints

Fundbox earns good reviews overall. Most customers compliment the helpful service and speedy funding. A few even mention their customer service rep by name and claim that Fundbox approved them after other lenders had denied funding. But some complaints report receiving spam and unsolicited contact from Fundbox after turning down a loan offer.

Is Fundbox legit?

Yes, Fundbox is a legitimate business loan lender. It has served over 500,000 small businesses and funded more than $3 billion in working capital since it opened in 2013. It uses encryption technology and strict security protocols to keep your information safe. It has multiple FAQ pages outlining how its privacy and security policies work.
However, the privacy policy on its website doesn’t state a way you can limit how your information is shared. Read the full privacy policy and other documents carefully to ensure you agree with how Fundbox may use information about you and your business.

Frequently asked questions

What credit score is needed for Fundbox?

You’ll need a credit score of at least 600 to qualify for a Fundbox loan.

What are the income requirements for Fundbox?

Fundbox wants to see at least three months of transaction history in a business checking account and $100,000 or more in annual revenue.

Does Fundbox require collateral?

No, Fundbox does not require collateral or other forms of insurance from the borrower to ensure they can repay the loan.

What accounts can I link to Fundbox?

Fundbox works with the following types of accounting software:

• Clio
• eBillity
• FreshBooks Classic
• FreshBooks New
• Harvest
• invoiceASAP
• Jobber
• Kashoo
• QuickBooks Desktop
• QuickBooks Online
• Zoho

You don’t necessarily need to use eligible software to qualify. Fundbox can connect with bank accounts from over 12,000 financial institutions, including national, regional and local banks and credit unions instead.