Fundbox Review 2023: Lines of Credit―Even for Fair Credit

Fundbox offers business lines of credit (LOCs). These can help small-business owners smooth over cash flow issues and get flexible working capital―but is Fundbox a good place to get a line of credit?

Well, it depends. Fundbox has pretty moderate borrower requirements compared to other LOC lenders. Plus, it offers minutes-fast approval and funds available as soon as the next business day. But those perks come with a cost―literally. Fundbox costs more than many other lenders, and it doesn’t have the big credit limits or other credit options of those lenders.

Want to know more? In this Fundbox review, we’ll explain what Fundbox is, how it works, and why it might work well (or not) for your cash flow needs. Let’s get started.

While Fundbox used to offer invoice financing (called Fundbox Credit), it now offers just a business line of credit (formerly known as Fundbox Direct Draw).

Fundbox’s line of credit acts as a revolving form of credit. You have a credit limit, and you can draw funds against that limit. As you repay what you borrow, that amount becomes available to borrow again―over and over (hence calling it a revolving line). You use only what you need as you need it, so you won’t pay fees on money you never actually used.

Fundbox doesn’t charge a traditional interest rate. Instead, it charges weekly fees. Your fee rate will depend on both your borrower qualifications and the length of your term. (Longer terms, as we said, have higher fees.)

Here’s how this works out: Let’s say you withdraw $10,000. On a 12-week plan, which will have lower fees but higher payments, you might have a fee of 4.66%. Multiply that fee by the total (10,000 × 0.0466), and you’ll see you have $466 in fees, for a total repayment of $10,466.

If you opt for a 24-week repayment period instead, you’ll have higher fees (but lower weekly payments). So with that same $10,000, you might have an 8.99% fee. That means you owe $899 in fees and $10,899 total.

Fundbox does front-load your fees, so you’ll pay more in interest during the first month of your repayment term. Your weekly payment will stay the same―but after that first month, more of your payment will go to the business loan principal (your draw amount) than to fees.

That means that, while you can repay your loan early to save on fees (Fundbox will waive any remaining fees), you won’t save nearly as much if you pay after that first month.

Keep in mind that Fundbox will tell you exactly how much you’ll pay in fees before you make a draw, so you don’t have to worry about nasty surprises down the line.

So how do these fees affect APR? Before we answer, let’s brush up on APR.

APR, or annual percentage rate, expresses the total cost of a loan over a year. It includes interest and other fees, like maintenance fees or origination fees. In theory, APR helps you understand how much your loan, or term loan, actually costs you.

Because Fundbox uses drawing fees rather than interest, it doesn’t technically have an APR. Instead, it has what’s known as an effective APR, which serves pretty much the same function as a normal APR.

Here’s the thing about APR: it largely tells you that fees spread over many years cost less each year than the same fees spread over one or two years. If you have a total of $1,000 fees on a loan, but you pay those fees over five years, that’s only $200 in fees each year. That same total over two years comes out to $500 in fees each year.

Sounds obvious when you put it that way, right? Well, keep that in mind as we talk about APR and Fundbox. You’ll see people complaining about Fundbox’s APR, which falls between 10% and 80%.

And sure, that sounds high—and it is when compared to SBA loans that can have APRs between 6.3% and 10%. But mostly Fundbox’s high APR tells you that you’re paying fees over a short period of time (12 or 24 weeks, in this case). It does not necessarily mean you’re getting a bad deal. You have to decide that part for yourself.

Aside from drawing fees, which you’ll know from the beginning, Fundbox doesn’t charge common fees. You won’t pay application fees, origination fees, or early repayment fees on your Fundbox line of credit.

All you have to worry about are late payment fees and NSF fees (non-sufficient funds fees) if your bank account doesn’t have enough money to cover your payment.

Now that we’ve talked pricing, let’s look at what it takes to get a Fundbox line of credit.

Good news: Fundbox is a little more willing to work with you on borrower requirements than other lenders.

That’s partially because Fundbox has competitive borrower requirements to begin with. Though Fundbox has raised its borrower requirements quite a bit in the last year, it still has very moderate requirements compared to many lenders. Young businesses under a year old can qualify, for example. And small-business owners with less-than-perfect credit have a good shot too―as Fundbox accepts a personal credit score as low as 600 (a fair FICO score).

In other words, Fundbox is way more likely to approve most borrowers than traditional banks or even other online lenders are. Only a few lenders (mostly offering merchant cash advances) have significantly lower borrower requirements.

But just as important as Fundbox’s moderate baseline requirements? The fact that Fundbox is willing to compromise on those requirements, even a little bit. Fundbox’s website says that “ideally” your business should meet the minimum revenue and time in business requirements listed below―but you can still apply if you’re a bit under. Put simply, Fundbox offers flexibility we simply don’t see from other lenders.

That’s not to say you can automatically get approved for Fundbox with a bad credit score and a few months in business. (As you can see from Fundbox’s median borrower requirements, that would be very unusual.) More likely, you can probably get flexibility in one category if your other qualifications are strong.

If, for example, you have an excellent credit score and plenty of revenue, a slightly too-young business may not matter so much. Or if you’ve got an older business and a great credit score, but you’re still working on building revenue, Fundbox might be willing to flex for you.

Do keep in mind, too, that Fundbox’s flexibility does come with some tradeoffs. As you’ll see in the next section, Fundbox has relatively high rates on its lines of credit, and you won’t be able to get a high credit limit.

But considering that Fundbox might offer you financing when other lenders won’t for your bad credit, those downsides may well be worth it.

Fundbox stands out from the crowd of lenders who offer traditional loans, but it’s not the only company to offer invoice-based financing or lines of credit. Here’s how it compares to some of its biggest competitors.

As you can see, some other lenders offer higher credit limits than Fundbox. They also have lower costs (and they mostly use interest instead of draw fees).

But Fundbox definitely requires less time in business than other line of credit lenders. As we pointed out earlier, Fundbox prefers you to have been around for six months, but will accept younger businesses. For most lenders, though, six months is the bare minimum.

With that said, let’s talk more about how Fundbox compares to some of its most popular competitors.

Both Fundbox and Kabbage offer business lines of credit, and they both use automated approval processes to decide whether or not you get financing.

While Kabbage used to offer higher credit limits, Kabbage recently raised its maximum loan amount while Fundbox raised its own. They’re the same now.

Kabbage's rates depend on the term of the loan, with the rates getting higher as the term length increases. Kabbage increases its rate to 4.5% for 12-month loans—and its 2% rate applies to 6-month loans. In terms of borrower requirements, we do know that Kabbage is stricter than Fundbox, requiring at least one year in business.

Bluevine and Fundbox provide business lines of credit―but Bluevine also offers invoice factoring through their partner, FundThrough.

Bluevine offers much larger loan amounts (up to $5 million for invoice factoring and up to $250,000 for lines of credit), and it offers low interest rates and longer repayment terms than Fundbox does.

But Bluevine also has higher borrower requirements than Fundbox, at least for its line of credit. To get a Bluevine line of credit, you need at least a 625 credit score and $10,000 in monthly revenue. And while Bluevine’s invoice factoring is easier to qualify for (a 530 credit score can work), it still requires at least $10,000 in monthly revenue―more than Fundbox asks for.

Overall, Bluevine probably offers the better value―but given its stricter borrower requirements, many business owners will prefer Fundbox anyway.

We’ll tell you how to get a Fundbox line of credit in just a moment. But first, let’s make sure you fully understand the drawbacks to Fundbox.

We’ve already told you that Fundbox isn’t cheap. But it’s worth repeating again: Fundbox costs more than many other kinds of business financing. So make sure a Fundbox credit line fits in your budget before you formally accept a credit offer or draw from your line.

You’ve also probably noticed that Fundbox offers only lines of credit (at least for now). Credit lines give you lots of flexibility, so you can use them for lots of different things. But for some specialized needs, like real estate purchases or big equipment purchases, you’ll be better off finding a specialized loan from a different lender.

And one other thing we want to point out: Fundbox won’t help your credit score. It doesn’t report to credit bureaus, so paying off your credit line on time won’t make any difference to your credit report. That means that Fundbox isn’t the best stepping stone to other (better loans). It may be able to help you get more revenue and allow your business time to age, sure, but you’ll have to improve your credit score in other ways.

Think you might want to apply for a Fundbox credit line?

Fundbox doesn’t use traditional applications. Instead, its proprietary process determines your creditworthiness. You simply allow Fundbox to connect to either your accounting software or your business checking account, and it uses the information within to make a decision.

You’ll start by filling out a form with the most basic of details—your name, phone number, and estimated yearly revenue. Once you submit that information, Fundbox invites you to connect either your accounting software or your business checking account.

Once you give Fundbox the log-in details for whatever method you choose, it will look at your transactions and evaluate you as a borrower. This automated process doesn’t require human underwriters, so you can get an answer within minutes.

Note that Fundbox stays connected to your software or bank account until you revoke permission. In fact, Fundbox requires a continual connection to extend you funds. While that might sound scary, Fundbox uses up-to-date security protocols to protect your information, and we haven’t found any consumer complaints of privacy violations or data breaches.

If you get approved, Fundbox gives you a credit limit, and you can start drawing funds. And if you draw before noon Monday through Thursday, you can get your money within just one business day.

All this information is well and good, but do people actually like Fundbox after using it? Well, yes. Fundbox has a 4.75 out of 5 on its Better Business Bureau profile and a 4.7 out of 5 on TrustPilot.^1,2

Reviews praise Fundbox’s reasonable cost, easy applications, and fast fund transmission. Interestingly, the few negative reviews complain about some of the same things positive reviewers praise. But they also say Fundbox’s fees cost too much and funds were slow to arrive.

Some reviewers also complain that Fundbox gave them a credit limit that was too low, and a few reviewers said they wish they could repay monthly instead of weekly. If weekly repayment poses a problem for you, Fundbox might not be your cup of tea.

Fundbox offers very accessible business lines of credit. Its automated application process means you can get approved and funded quickly, even if you haven’t been in business for several years or if you don’t have a perfect credit history.

However, Fundbox does come with high APRs and relatively low credit limits, so some more established businesses may want to look elsewhere.

Want to compare Fundbox to other business LOCs? Check out the lenders on our rankings of the best business lines of credit.

We’ve covered a lot, but not everything. Let’s answer some lingering questions about Fundbox.

We researched everything we could about Fundbox, from rates and fees to customer reviews to its funding process. We used our research to score Fundbox and see how it compares to other lenders. Its scores formed the basis of this review.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.