Need Business Funding? Then Check out Our Fundbox Review
Fundbox is one of several lending companies online. They offer Invoice Financing (which is not the same as Invoice Factoring). Our Fundbox review can help you make the best decision for your business.
Fundbox has raised more than $100 million in capital from Silicon Valley investors such as General Catalyst Partners, Khosla Ventures, Blumberg Capital, Entrée Capital, and Spark Capital. They count Jeff Bezos of Amazon as one of their investors.
We look at the specifics and drill down into the details.
Fundbox Review: Background
Fundbox is located online here: fundbox.com. Their physical addresses are in San Francisco, California and Plano, Texas, with an international office in Tel Aviv.
Net Terms on Business Purchases
Rather than purchasing your accounts receivables for a percentage of the money owed to you, they will instead finance the full amount in the form of what is essentially a loan and then you will pay it back as your customers pay their invoices. Fundbox does not communicate directly with your customers; you will continue to do so.
Payment plans are either 12 or 24 weeks. There is no penalty for repaying early. If you repay early, Fundbox will waive all remaining fees. If you finance your invoices with Fundbox, the fees are flat.
To qualify, you must have at least 3 months invoicing history in your accounting software. Or you can have 2 months or more of activity in a supported accounting software. And you must have at least $50,000 in annual revenue. Plus, your personal credit score needs to be at least a 500.
Fundbox’s fees can vary, depending on customer and over time. You will pay the same amount each week. And you will save money if you pay early. Note: the company is rolling out a new rewards program. See: fundbox.com/pricing.
Revolving Business Lines of Credit
They also offer revolving business lines of credit. You can get line of credit determined according to the information you provided in your application—your business checking account, bank statements, credit report, and/or accounting software.
You will need to allow Fundbox to connect with your accounting software, such as QuickBooks. Fundbox would like to see at least two months of activity in any supported accounting software or three months of transactions in a business bank account.
Your business should be based in one of the 50 United States or one of their supported US territories. Their approved territories are Guam, American Samoa, Northern Mariana Islands, Puerto Rico, and the US Virgin Islands.
Fundbox has a B2B payment system (in a way, like Square or PayPal). This enables merchants to get paid faster on Net 60 accounts. It also allows buyers to qualify for net terms wherever Fundbox is accepted. Applying will not affect your personal credit.
Accounting Software they Support
Fundbox Pay supports several types of accounting software, including:
They also support:
- QuickBooks Desktop and Online
Fundbox Review: Advantages
Advantages include their exceptional flexibility in connecting to your business bank account, and fast approval. Another advantage is that Fundbox stays out of your relationship with your clients. Your clients need never know that you are working with Fundbox.
Fundbox Review: Disadvantages
The main disadvantage is less than fully transparent fee information. However, if you sign up for Fundbox, they will let you know what your fees are.
Fundbox Review: The Bottom Line
The businesses which do best with Fundbox will be those which can pay back their debts on time or even early. But this is the case with virtually all online lenders, of course.
In addition, entrepreneurs with poor credit will be able to turn to Fundbox. This is vital as most other online lenders will not do the same.
Companies without a long time in business might also do well. While neither a minimal time in business nor a minimal annual or monthly revenue requirement is spelled out on the site, there has got to be some sort of minimum in both areas.
As might be expected, companies which miss payments will not do so well with Fundbox – but that is the case with all online lenders.
Fundbox Review: Alternative Funding
Of course we recommend business credit building as an alternative to Fundbox. And it can also be an effective supplement to working with them.
Small Business Fundability™
Growing business credit is a process, and it does not happen without effort.
A business has to be fundable to lending institutions and vendors. For this reason, a small business will need a professional-looking web site and e-mail address, with website hosting from a company like GoDaddy. Plus business phone numbers ought to have a listing on ListYourself.net.
Additionally the business telephone number should be toll-free (800 exchange or the equivalent).
A company will also need a bank account devoted strictly to it, and it has to have all of the licenses essential for operation. These licenses all have to be in the accurate, appropriate name of the small business, with the same business address and phone numbers. Note that this means not just state licenses, but potentially also city licenses.
Starting the Business Credit Reporting Process
Start at the D&B web site and get a free DUNS number. A DUNS number is how D&B gets a corporation into their system, to produce a PAYDEX score. If there is no DUNS number, then there is no record and no PAYDEX score.
Once in D&B’s system, search Equifax and Experian’s web sites for the company. You can do this at https://www.creditsuite.com/reports. If there is a record with them, check it for correctness and completeness. If there are no records with them, go to the next step in the process. In this manner, Experian and Equifax will have activity to report on.
First you must establish trade lines that report. This is vendor credit. Then you’ll have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can start getting more credit.
These varieties of accounts often tend to be for the things bought all the time, like shipping boxes, ink and toner, and office furniture.
But first off, what is trade credit? These trade lines are credit issuers who will give you preliminary credit when you have none now. Terms are generally Net 30, instead of revolving.
Hence if you get approval for $1,000 in vendor credit and use all of it, you will need to pay that money back in a set term, like within 30 days on a Net 30 account.
Net 30 accounts need to be paid in full within 30 days. 60 accounts must be paid in full within 60 days. Unlike with revolving accounts, you have a set time when you must pay back what you borrowed or the credit you made use of.
Not every vendor can help in the same way true starter credit can. These are merchants that will grant an approval with minimal effort. You also want them to be reporting to one or more of the big three CRAs: Dun & Bradstreet, Equifax, and Experian.
Monitor Your Business Credit
Know what is happening with your credit. Make certain it is being reported and deal with any errors ASAP. Get in the habit of checking credit reports. Dig into the specifics, not just the scores.
Update the info if there are inaccuracies or the info is incomplete.
Fundbox Review: Some Final Thoughts
And finally, as with every other lending program, whether online or offline, always remember to read the fine print and do the math. Go over the details with care. And decide if this option will be good for you and your company.
In addition, consider alternative financing options that go beyond lending, including building business credit, in order to best decide how to get the money you need to help your business grow. Today, we want to hear from our audience! Share your voice with us about your experiences with online lenders. And let us know your opinion of our Fundbox review.