Fundbox review: Business lines of credit
Get a quote for a line of credit within minutes — but watch out for the high cost.
finder.com’s rating: 4.2 / 5.0
Bottom line: Fundbox offers lines of credit with faster funding, more flexible requirements and a simpler application than you’ll find at most banks. The total cost can be higher than a credit card — though it’s comparable to other similar products. Read our full review or get our 30-second take.
- No paperwork
- Takes minutes to get approved
- Accepts new businesses and fair credit
- Low starting credit limit of $1,000
- No credit limits over $150,000
- Front-loaded fees
- High total cost, compared to bank line of credit
- Not transparent about how pricing works
Our take on Fundbox
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. While most types of small business can use it, these lines of credit are designed for business-facing businesses that regularly experience cashflow gaps from unpaid invoices.
It has a simple online application that makes it easy to consistently access funds. And it’s one of the few online providers that truly asks for no paperwork by connecting to your accounting software.
Fundbox is very similar to other online lenders such as OnDeck and Kabbage — in both good and bad ways. Like Kabbage, its use of a flat fee instead of interest makes it difficult to tell exactly how the cost compares to a bank loan or credit card, which often advertise costs with an APR. And when I did the math, I found that most borrowers can expect to pay the equivalent of around 35% APR or higher — approximately what OnDeck charges.
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. While it’s expensive compared to bank loans, the convenience and low credit requirements could be worth the cost for some small business owners.
Fundbox now offers term loans and cash flow insights
In addition to lines of credit, Fundbox launched a term loan and cash flow prediction tool called Fundbox Insights in 2021. Both products are only available to a limited number of users and doesn’t have much information available — yet. You can sign up to learn more about the new short-term loan or cash flow tool on Fundbox’s website.
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 the same credit limits with 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.
Compare more business loans lenders
Fundbox reviews and complaints
|BBB customer reviews||4.62 out of 5 stars, based on 133 customer reviews|
|BBB customer complaints||12 customer complaints|
|Trustpilot Score||4.7 out of 5 stars, based on 2,782 customer reviews|
|Customer reviews verified as of||24 June 2021|
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.
What accounts can I link to Fundbox?
Fundbox works with the following types of accounting software:
- QuickBooks Desktop
- QuickBooks Online
Fundbox can connect with bank accounts from over 12,000 financial institutions including national, regional and local banks and credit unions.
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.
Business loan ratings
We rate business loan providers on a scale of 1 to 5 stars based on factors like transparency, costs and customer experience. We don’t take into account elements like eligibility criteria, state availability or payment frequency — we save that for our reviews.
Read the full methodology of how we rate business loan providers to get a better picture of what goes into each star rating.