Fundbox review: Business lines of credit

What makes Fundbox shine

A Fundbox line of credit could be a good option for small businesses that can’t qualify for a bank loan — or just don’t have the time to apply. It has a simple online application that makes it easy to consistently access funds.

You can receive a decision in as little as three minutes and funding as soon as the next business day. And once you’re approved, you can borrow continuously against the same line of credit without needing to complete an application every time.

It’s also one of the few online providers that truly asks for no paperwork by connecting to your accounting software. Plus, it accepts businesses that have been around for as little as six months.

Many other lenders require companies to have a minimum credit score of 670 or higher, but Fundbox accepts scores as low as 600 – making it more accessible to those with fair credit.

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. This means that 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, but that product has since been discontinued. This leaves 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 your options elsewhere.

Fundbox business loans

Fundbox currently offers just one product: a business line of credit to help with expenses like buying inventory, purchasing materials, equipment maintenance and more.

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.

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 $30,000 in annual revenue
• At least three months of transaction history in a business checking account, but preferably at least 6 months in business

Just meeting these requirements might not be enough to get approved. “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,” Fundbox COO Cetin Duransoy told Finder in an interview.

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.

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.

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 higher credit score, time in business and revenue requirements.

Fundbox lines of credit	OnDeck short-term loans	Bluevine business lines of credit
★★★★★ Finder rating 4.2 / 5	★★★★★ Finder rating 4.6 / 5	★★★★★ Finder rating 4.3 / 5
Loan amount $1,000 – $150,000	Loan amount $5,000 – $250,000	Loan amount $5,000 – $250,000
APR 4.66% for 12-week terms and 8.99% for 24-week terms	APR Average is 60.9%	APR Starting at 6.2%
Loan term 12 or 24 weeks	Loan term 3 to 24 months	Loan term 6 or 12 months
Requirements $30,000+ in annual revenue, 3+ months in business, 600+ FICO credit score, business checking account	Requirements Companies in business at least 1 year, $100,000+ in gross annual revenue, majority owner with a 625+ personal credit score, active business checking account	Requirements 24+ months in business, $40,000+ in monthly revenue, 625+ credit score

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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 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.