Fundbox
by Mel
Jan 12, 2021 |
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San Francisco-based Fundbox is a fintech company and small business lender that specializes in financial products such as lines of credit and is particularly targeted towards entrepreneurs who need to quickly fill a cash-flow gap and those with low borrowing qualifications.
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Summary
San Francisco-based Fundbox is a fintech company and small business lender that specializes in financial products such as lines of credit and is particularly targeted towards entrepreneurs who need to quickly fill a cash-flow gap and those with low borrowing qualifications.
What You Get
When the Covid-19 pandemic lockdowns and restrictions came into effect in the spring of 2020, many small businesses, particularly those in the restaurant, bar, hospitality, fitness, leisure, beauty, and tourism sectors were being hit hard the most. By September 2020 of the shutdown, according to Yelp Economic Average, over 160,000 total US businesses had closed, with 98,000 permanently closing.
Those businesses that have managed to hold on have likely done so primarily with the help of financial assistance programs such as the Small Business Administration’s Paycheck Protection Program (PPP) and through lending institutions such as Fundbox.
Specializing in financing options for small businesses, Fundbox was founded in 2013 originally as an invoice financier for small businesses called Fundbox Credit. In 2017, Fundbox introduced their Line of Credit service which, today, makes up the core of its business.
Fundbox's primary line of credit product offers qualified borrowers a predetermined amount of funds that you can borrow from when you need to and pay back later. Unlike a traditional term loan, you can use the funds as and when you need them for business purchases like inventory, supplies, or operating expenses, and then repay what you’ve used to make the funds available again (in what is called “revolving line of credit”).
And unlike a term loan which has fixed monthly repayment terms with interest, you can typically pay back your Fundbox credit line anytime, with the added benefit of NO early repayment fees if you are able to pay off your loan amount in its entirety before its due date.
In addition, during this coronavirus pandemic period, aside from its line of credit services, as an approved lender for the SBA’s Paycheck Protection Program (PPP), Fundbox will submit your PPP application directly to the SBA instead of to a third-party partner. Join the 100,000+ businesses that have put their trust in Fundbox and get up to 2.5 times your average monthly payroll cost.
Through the new round of SBA-PPP for 2021 in partnership with Fundbox, businesses can apply for loans up to $2 million, with max amount based on average monthly payroll (or net revenue if a sole proprietor) for 2.5 months (3.5 months for food/hotel industry). Loans will also be 100% forgiven if used for eligible payroll, utilities, rent, mortgage interest, and some operation expenses (any amount not forgiven will have a 1% interest rate). The PPP Flexibility Act, in addition, defers borrower payments on all PPP loans up to 10 months after the end of the borrower’s loan forgiveness covered period.
In general, Fundbox may be a good option for your business if you: 1) Need very fast cash with approved funding in as fast as the next business day; 2) have been in business for just 3 months (many lenders require your business to have been registered for a minimum of 6 months to a year); 3) don’t meet the requirements from other financing institutions or lenders (Fundbox requires a relatively reasonable minimum annual revenue of $50,000 and at least three months of invoicing history with a supported accounting software or business checking account); and 4) have a novel business as Fundbox can work with any business entity type (except those in drugs, dispensaries, and drug paraphernalia; adult entertainment and services; firearms and weapons; online gaming and gambling; money services businesses; and non-profit organizations).
For example, Fundbox only requires a minimum credit score of 500, which is lower than other online lenders. You then link your accounting software and bank account—over 14,000 banks and financial services companies and the following accounting software platforms: QuickBooks, FreshBooks, Sage One, InvoiceASAP, Xero, Harvest, Clio, Kashoo, and Jobber.
To create a Fundbox account, users are required to link their accounting platforms with Fundbox. The registration, connection, and approval process are free of charge. They also do not store your login credentials and applying will not affect your credit score.
Fundbox then uses data analytics tools such as data science engines and machine learning algorithms to determine a credit line and to calculate the risk of each loan. A typical credit line can vary between $1,000 and $25,000 with a maximum of $150,000. Fundbox clients can also see the fee for each invoice, which is based on the risk and probability of repayment. Once an invoice is cleared, funds are deposited directly into the customer's bank account between 24 and 48 hours.
Borrowers then pay in equal installments over the course of a 12 or 24 week plan. Your available credit replenishes as you pay and there's no penalty to repay early.
You’ll be able to track your repayment schedule—as well as your credit line, transactions, and draw history, from your Fundbox Dashboard on Fundbox.com or through the Fundbox App (available for iOS and Android). Moreover, you can keep your Fundbox account connected to your bank account or accounting software, so you’ll always know how much available credit you have at your disposal.
Terms
Repayment of your loan on Fundbox is between your choice of 12 and 24 weeks. Repayment is completed through equal weekly installment that are automatically debited from your linked bank account and includes a weekly processing fee, determined by Fundbox’s assessment of your business.
Each weekly payment includes one-twelfth of the principal and one-twelfth of the fee. If a user pays back the advance before the payment term period has elapsed, Fundbox will waive the remaining fees. For a more thorough computation of your potential loan, simply visit the “Pricing” section of the Fundbox.com website which features a calculator to estimate the cost of each advance.
On average, an estimated APR on your line of credit will range between 10.10% - 79.80% and require a minimum Credit Score of 500 to 550.
And just like other lenders, Fundbox requires a personal guarantee for all business lines of credit, which means the client is personally responsible for repayment if the business fails to repay a loan. Borrowers must also agree to a general lien on their business assets to secure the line of credit.
Trustworthiness
Fundbox is a Better Business Bureau (BBB)-accredited business with an A+ rating with an average of 4.59 out of 5 stars based on customer reviews as well as a rating of 4.7 out of 5 stars on Trustpilot.
On the flipside, some common complaints about Fundbox include arbitrariness in either the approval or denial of applications, relatively high fees, and somewhat low maximum credit line amount (which did recently increase from $100,000 to $150,000)—all of which hardly dampen Fundbox’s generally positive reviews across most major consumer review websites.
Conclusion
If you find yourself in need of a quick source of cash (especially during the challenging circumstances presented by the Covid-19 pandemic) or are looking for a line of credit but can’t qualify for a loan from most lending institutions due to their stringent requirements; then Fundbox is certainly worth considering. With a quick and easy application process, little documentation or collateral required, no prepayment penalties, and a minimum of just 3 months in operation (or bank account activity), Fundbox is a convenient source of financing for new and small businesses at a time when you need it the most.
Fundbox Blog
New Site Added: Fundbox
by Mel
Jan 12, 2021
San Francisco-based Fundbox is a fintech company and small business lender that specializes in financial products such as lines of credit and is particularly targeted towards entrepreneurs who need to quickly fill a cash-flow gap and those with low borrowing qualifications.
Read More
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