Launched in 2013, San Francisco-based fintech lender Fundbox has rapidly become an industry leader, raising more than $100 million from such prominent investors as Amazon founder Jeff Bezos and former Citigroup CEO Vikram Pandit. The award-winning lender provides invoice financing and lines of credit to healthy small businesses.
Using its proprietary technology, Fundbox connects to a business’s bank account or accounting software to analyze the financial health of a business and determine eligibility for its products. Funds are provided directly by Fundbox or its partner, First Electronic Bank, an FDIC-insured, state-chartered bank headquartered in Utah.
Invoice financing. Fundbox allows you to borrow against unpaid invoices. The lender charges a flat fee for the borrowing, and you must repay in 12 or 24 weeks. Payments are automatically debited from your bank account every Wednesday. There is no prepayment penalty, and if you repay early, Fundbox waives all remaining fees. Unlike invoice factoring, your customers still pay you directly after you borrow, and you receive the full value of the unpaid invoice.
Lines of credit. Fundbox offers business lines of credit up to $100,000. No collateral or personal guarantee are required. There are no application fees or origination fees. The lender charges a weekly fee when you draw on the line. You can still qualify for a line of credit even if your small business doesn’t use one of Fundbox’s approved account platforms. Instead, you can connect Fundbox to the checking account your business uses.
|Fundbox: At a glance|
|Loan product||Loan amount||Loan term||APR range/ factor rate||Fees||Time to funding|
|Invoice Financing loan||Up to $100,000||12 weeks or 24 weeks||Not applicable because such a short-term loan||Starts at 4.66% flat of total draw amount for 12 weeks or 8.99% flat per draw amount for 24 weeks||24 hours if approved in most cases.|
|Line of credit||Up to $100,000||12 weeks or 24 weeks||Not applicable because such a short-term loan||Starts at 4.66% flat of total draw amount for 12 weeks or 8.99% flat per draw amount for 24 weeks.||24 hours if approved in most cases.|
Rates current as of 6/21/2018
|Loan product||Annual revenue||Min. business credit score or personal credit score||Time in business|
|Invoice Financing||$50,000 minimum||None initially. Creditworthiness based on business performance.||6 months of invoicing|
|Business Line of Credit||None||None initially. Creditworthiness based on business performance only.||6 months in operation|
For lines of credit, you need a compatible accounting software or an open bank account. For invoice financing, you need accounting software that works with Fundbox’s plugin. These include:
If your business is denied, you can apply again using your personal credit as part of the application. If your business is approved based on your FICO score, you can get credit with as long as you provide a personal guarantee.
It’s important to note that Fundbox periodically reviews approved accounts to review the ongoing creditworthiness of your business. That means loan terms and levels can change if your business performance changes.
Startup businesses are not eligible because Fundbux requires businesses to be in operation for at least six months for its lines or credits and have at least three to six months of invoicing records to qualify for its invoice financing.
You can apply for Fundbox financing online only. The lender will ask for your name, business email, phone number and annual revenue. It will then ask you to connect your accounting software or bank account to its proprietary algorithm – Small Business Graph- to evaluate your small business for invoice financing or line of credit. No documents are needed to apply.
|100% automated.||No human underwriting means no people to consider your unique circumstances.|
|Low loans available.||Maximum loan or line of credit is only $100,000.|
|No personal credit check.||Business health must be good and stay that way.|
|Short-term financing available.||No long-term loans.|
Financing is available for small businesses with a demonstrated track record of healthy performance, regardless of the owner’s own personal credit. The short-term financing options offered by Fundbox can help a small business that has regular, stable clients, but needs to cover shortfalls in cash flow.
There are no subscription, maintenance or inactivity fees, though Fundbox can deactivate your account for inactivity. Fundbox will increase your line of credit if you provide a personal guarantee.
You can find more in-depth details about Fundbox’s loans and process on its support pages than its consumer-facing pages.
Fundbox is good option for small business that need access to short-term cash while waiting for invoice payments, but have an established business track record. Fundbox’s approval process doesn’t disadvantage business owners with poorer personal credit as it may at more traditional lenders. Further, its invoice financing model helps you maintain control over client relationships by allowing you to collect directly from them. You also receive 100% of invoice values.
As always, compare Fundbox option with what other lenders provide to find the best lending solution for your small business.