Article by Chris Costi, Last update at June 27, 2022
Fundbox was founded in 2013 and they specialize in offering financial products to small businesses. In 2017 they introduced a line of credit called Direct Draw and recently they have expanded to B2B payment services called Fundbox Pay. Fundbox offers an easy line of credit to qualifying businesses regardless of credit score or time in business. To qualify, your business must be based in the U.S. or in US territories including, Guam, American Samoa, Northern Mariana Islands, Puerto Rico, or the US Virgin Islands. Fundbox has a great track record and the firm has raised $176 million to offer a credit network for B2B small businesses. The application process is fast and easy, and once approved, funds can be accessed within a couple of days. Fundbox offer invoice financing, lines of credit and a new payment solution for B2B called Fundbox Pay which allows sellers to receive money for their services immediately minus a small transaction fee. This service offers a Net 60 days term with no interest of fees payable, if the transaction is paid in full. Over 100,000 businesses trust Fundbox as they use industry-standard security protocols and best practices.
The cost of borrowing money from Fundbox will depend on the initial amount of credit. Approved customers are offered a line of credit with a term period of 52 weeks. Funds are available in a couple of days minus a 1%-3.3% merchant fee. Advertised rates start at 4.66% of the value of the loan. Fundbox do not charge origination, maintenance or termination fees but you will be charged a weekly fee and late payment fee. Repayments are made weekly and borrowers have the option of 12 or 24 weeks terms. The borrowing amount starts at $1,000 and the maximum is $100,000. The amount you are eligible for will depend on your business financials and how long you have a business bank account. Funds approved will be deposited into your bank account within a couple of days and Fundbox does not charge money transfer fees or any draw fees. You can also request a revolving line of credit which will be replenished as you pay of the loan. Repayments are made in equal instalments over the pre-arranged time period. There is also the option to pay the amount in full over 60 days to limit the amount of interest and fees that you are charged.
In order to qualify for Fundbox Credit, you must have a compatible accounting and invoicing software program for at least two months prior to application. Compatible software include eBillity, FreshBooks, Harvest, InvoiceASAP, Jobber, QuickBooks, Kashoo, Xero and Zoho. It is also essential to have a bank account for at least three months before applying. Fundbox works with thousands of banking institutions in the U.S. and they use your bank account data to assess the health of your business. There are two financing products to choose from, Fundbox Credit which is invoice financing, and Direct Draw which is a line of credit you can use whenever needed. Both these product cost the same in interest but they do operate differently. With the Fundbox Credit, you will need to have compatible accounting software that shows accounts receivable. This credit covers your business and protects your from late payments from your customers. The Direct Draw offers revolving credit and can be used for unexpected expenses. Fundbox offers credit lines of up to $100,000 and your account will be evaluated regularly.
Fundbox is a well-known, and popular finance provider, for small businesses that might have cash flow problems or need a credit line for emergencies. There are three financial products suitable for small B2B and B2C businesses. Fundbox is not suitable for large businesses as there is a cap on the amount they can finance. For those looking for invoice financing or for a line of credit Fundbox offers an easy application process with fast approval. To qualify for finance you will need to create an account by submitting basic information about your business and allow access to your accounting software or business bank account. With the link to your accounts you will be evaluated for Fundbox Credit, with a link to your bank account you will be applying for Direct Draw, or a line of credit.
Fundbox is fully automated and your application is assessed and approved within a few minutes. On approval you can requests funds immediately and the amount will be in your bank account the next day, if you make the request early. Fundbox offers great support via phone, email and their support centre which offers a comprehensive FAQ, troubleshooting and general information on all aspects of their financial services.
Borrowers can request funds from their line of credit at any time and not get charged any fees. Direct Draw is not associated with the businesses unpaid invoices and this type of money advance works well for B2B businesses looking for a line of credit. Any business that has a business bank account for at least three months, is eligible to apply. This is a revolving credit and it is replenished every time you make a payment. Fundbox offers great cash flow solutions for small businesses. Unpaid invoices can affect the way a business is run and having the funds behind you until the invoices are paid is a huge benefit. Fundbox will finance 100% of your receivable invoices in comparison to other companies who offer only 80%-90%. With this advance in fund you can eliminate credit risk and account receivable debt.
On the other hand the Direct Draw credit line is convenient for unforeseen expenses and you can draw directly from the dashboard. You will also have easy access to your payment total before you commit to this type of credit with no confusing language and straightforward repayment plans. There is always an option to pay early to save on interest and Fundbox offers 60 days repayment terms without fees. If you need to have the funds available over an extended period you can repay in one year. Small businesses can experience slow sales, late payments or urgent unexpected expenses. Having the extra capital available can save your business from premature closing. A business line of credit is essential as protection from unforeseen complications.
The Direct Draw financial package is a line of credit that has a predetermined amount. It is different to a traditional term loan as you can use the funds whenever you need them for inventory, supplies and operating expenses. Term loans have a fixed monthly repayment plan, whereas a credit line gives you the flexibility to pay back your credit at any time. The other advantage of a line of credit is that it is revolving and you can make use of the funds again. Term loans are usually a lump sum that you receive and repay with interest over a predetermined time period.
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