Fundbox review: Business lines of credit

Fundbox rates, fees and terms

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.

You can get an estimate of the minimum weekly payments and minimum total cost of a withdrawal by using a calculator on Fundbox’s website. But keep in mind this is the minimum Fundbox charges for these terms.

How Fundbox compares with other lenders

Fundbox lines of credit work a lot like those available through OnDeck and Kabbage. But there are a few slight differences.

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

Kabbage offers lower monthly fees and slightly longer terms. But it also may be more difficult to qualify than Fundbox and also runs a hard credit check when you apply.

Fundbox lines of credit	OnDeck short-term loans	Kabbage small business loans
★★★★★ Finder rating 4.2 / 5	★★★★★ Finder rating 4.6 / 5	★★★★★ Finder rating 4.4 / 5
Go to site	Go to site	Read Review
Loan amount $1,000 – $150,000	Loan amount $5,000 – $250,000	Loan amount $2,000 – $150,000
APR Not stated	APR 29.9% to 99.9%	APR N/A
Loan term 12 or 24 weeks	Loan term 3 to 24 months	Loan term 6-month term: 0.25% to 3.50% 12-month term: 0.25% to 2.75% 18-month term: 0.25% to 2.50%
Requirements 6 + months in business, $100,000+ in annual revenue, 600+ credit score	Requirements 625+ personal credit score, 1 year in business, $100,000+ annual revenue, active business checking account	Requirements 1+ years in business, 640 minimum credit score, a valid checking account and $3,000 minimum monthly revenue

Compare more business loans lenders

See my options

Fundbox reviews and complaints

Fundbox earns good reviews overall, but some customers report problems with its service. There are also multiple complaints about the high fees and weekly repayment schedule. However, most say that Fundbox provided a quick, simple solution for their temporary cashflow problems.

How to qualify

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

• At least six months in business
• Personal credit score of 600 or higher
• At least $100,000 in annual revenue

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 me 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 the application works

Fundbox’s application works by asking for basic information about your business before connecting with your bank account and accounting software. "By connecting with customer bank accounts and accounting software, our artificial intelligence enables us to deeply understand our customers, the entities they transact with, and the overall small business ecosystem," Duransoy says. "The data drives our credit decisions and enables us to build products that uniquely understand customer needs, and becomes more accurate overtime with more data."

After you submit the application, it 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. This means applying for a Fundbox line of credit of won’t affect your credit score, but using one for the first time will.

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. 

What sets it apart

The lack of paperwork and relatively relaxed eligibility requirements set Fundbox apart — even from other online lenders. It’s one of the few providers that accepts businesses that have been around for as little as six months. 

But it also has relatively low credit limits and fees are high compared to a traditional credit line. You may also want to consider business credit cards if you’re considering a Fundbox line of credit — in addition to other, more traditional lenders.

Is Fundbox legit?

Yes, Fundbox is a legitimate lender. It's served close to 300,000 small businesses since it opened its doors 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 the way 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.

Fundbox is a short-term solution for businesses that have unpaid invoices. For other funding options, learn more about business loans and compare lenders like Fundbox.