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Compare BlueVine vs. Fundbox business financing
Forget traditional lending — invoice financing can help with quick cash needs.
The road to a successful business is long, and you’ll likely need extra cash at some point to bridge a financial gap. Before online lenders came along, your only option was to drag a load of paperwork to your local bank to apply for a loan, often waiting weeks for a decision.
Now, even if you’re the new kid on Main Street, you can find a range of online providers working hard to earn your business with fast decisions that look beyond your credit score when deciding how much they can provide.
Here, we take a look at how two nontraditional short-term business lenders, BlueVine and Fundbox, compare.
Overview of BlueVine and Fundbox
It wasn’t long ago that BlueVine and Fundbox themselves were the new kids. In fact, both lenders were founded in 2013 with small business in mind. Each offers small businesses access to lines of credit and cash advances on unpaid invoices — called invoice financing.
BlueVine can approve you for a business line of credit (LOC) for ongoing funding without tapping into your cash flow. It also offers invoice factoring, whereby you sell your invoices to BlueVine for a percentage of what you’re owed. After your customers pay their invoices, you’ll get a rebate for the remaining percentage, less BlueVine’s fee based on the term and value of the invoice. You can also take out a business term loan with BlueVine, which comes with the same rates and borrowing amounts as its LOC option.
Fundbox differs from BlueVine in that it rolls together a line of credit and invoice factoring into its business financing offer. When it comes to determining your rates and terms, it emphasizes the financial health of your business over your credit score. As with BlueVine, approval and funding is easy and quick.
First, am I eligible?
You’re eligible for a business line of credit if you meet the following criteria:
- In business for at least six months
- Annual revenue of at least $100,000
- Minimum personal credit score of 600
- Not based in North Dakota or South Dakota
You’re eligible for business invoice factoring if you meet the following criteria:
- In business for at least three months
- Minimum personal credit score of 530
- Invoices from business-to-business (B2B) or business-to-government (B2G) transactions
- Not an insurance company, car dealership or financial institution
You can apply for a business loan with Fundbox if you meet the following criteria:
- Business is registered in the United States
- At least three months of active invoice history
- Use accounting software partnered with Fundbox or have a valid business checking account
Which lender can get me money faster?
Your application takes no more than a few minutes to complete, requiring your contact information, the amount you’re interested in and a link to your business accounts. You’ll get a funding decision in as little as 10 minutes, with funding on the same day if you pay for a $15 wire transfer. Otherwise, it can take one to three business days to get your money.
To apply with Fundbox, create an online account with your personal and financial details. You’ll then connect your bookkeeping software or business bank account and submit your information. You should hear a decision within a few hours. Once approved, your funds are transferred to your account as early as the next business day.
While both lenders can get you funds in as little as one business day at no cost to you, BlueVine comes out on top thanks to its wire transfer option that can get you funding in just a few hours.
Which has a better reputation?
Based on over 1,150 Trustpilot reviews, BlueVine scores a decent 9.4 out of 10 — with 85% of its customers rating it as excellent. Many users are happy with BlueVine’s convenience and speed.
As of June 2019, Fundbox has even more reviews on Trustpilot and averages 9.7 out of 10. Add to that more than 90% of its customers who rated it excellent. Customers also sound pleased with Fundbox’s customer service.
The numbers say Fundbox has a higher rating, and more people say its services are excellent.
How much can I borrow with each lender?
You can borrow between $5,000 and $250,000 with a BlueVine line of credit or term loan, while its invoice factoring starts at $5,000 and goes up to an incredible $5,000,000 based on the amount of your invoices advanced. You can get between 85% and 90% of the invoice amounts you’re owed.
With Fundbox, you could be approved for anywhere from $1,000 and $100,000 as a line of credit.
It comes down to how much you need. While Fundbox offers lower starting amounts, you have the potential to borrow millions with BlueVine’s invoice factoring product.
Which lender offers more affordable financing?
Both lenders charge fees that they’re not so keen on disclosing without you submitting specific information about your business. Borrowers who are serious about picking between these two lenders may want to get a quote from each to compare pricing.
Interest rates for BlueVine’s line of credit and term loan start at a low with 12 or 6 months to pay it off. But for invoice factoring, you’ll pay a factor fee between 0.2% and 1.3% for each week your client takes to pay their invoice.
BlueVine doesn’t charge prepayment penalties, origination, termination or monthly service fees. But if you need funds faster than its standard delivery, you’ll pay a $15 wire transfer fee for the convenience.
Fundbox technically doesn’t charge interest on its loans. Instead, it charges a percentage of your balance as a fee each time you make a payment. Payments are due a week after you make a withdrawal, with fees starting at 4.66% for a 12-week credit line and 8.99% for a 24-week credit line. You can save by paying back your line of credit early.
If you’re unable to make your payments on time, you could be stuck with triple the amount you owe, also reimbursing Fundbox any fee that comes with its failed attempt to withdraw money from your accounts.
With its advances on your unpaid invoices, Fundbox deposits the entire amount that you’re owed into your account right away, and you then have 12 weeks to pay it off — plus a fee. Fundbox also allows you to stay in touch with your customers, even when you aren’t collecting payments from them.
If you qualify for the lowest starting fee with BlueVine’s invoice factoring product, you could pay almost 50% less than you would if you went with Fundbox’s 12-week credit line, but only if all of your clients pay back their invoices within three months.
Case study: Stacy sips on a coffee shop renovation
Stacy’s been running her family’s coffee shop for a year and now wants to celebrate the anniversary with a weekend renovation. She has about $25,000 in a few outstanding invoices and thinks $20,000 is enough to cover her plans. And she’s fairly certain that her customers are on the cusp of paying off their bills.
Wanting to get started as soon as possible, she narrows down her options to the nontraditional lenders, BlueVine and Fundbox.
|Fees||Factor fee starting at 0.2% for each week her clients takes to pay their invoices; optional wire transfer fee of $15 to receive funds faster||Weekly fees starting at 4.66% for a $20,000 line of credit with a 12-week term|
|Ease of application||Online application takes minutes to complete, and you could hear from them in just 10 minutes.||Online application takes minutes to complete, and you’ll hear from them in a few hours.|
If Stacy qualified for the lowest starting fee with Fundbox, she’d end up paying $932 in fees for her $20,000 line of credit. Meanwhile, if she qualified for the lowest starting factor fee with BlueVine’s invoice factoring, she’d end up paying only $480 in fees — granted all of her clients paid back their invoices within three months.
In the end, Stacy decides to go with BlueVine, since she could potentially save $452 depending on the factor fee she qualifies for.
Read the Fundbox review
When it comes to BlueVine and Fundbox, deciding which is best depends on how much you need, how quickly you need it and how long you’re looking to pay it off. If you’re worried about your personal credit history getting in the way of a business loan and have only small invoices for an advance, Fundbox could be a better choice. If you have stronger personal credit and bigger invoices, BlueVine could be worth a look.
But you don’t have to limit yourself to these two options — it’s always a good idea to compare some of the best business loan providers before deciding on a lender.
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