After applying for a loan through Fundbox, I can say that this online lending platform offers one of the fastest and most convenient loan solutions for small businesses. Below, I am going to share more insights into what the application process involved for a business equipment loan of $2,000.
Applying for a business loan through Fundbox is a five-step process. The first stage is the online application, which is then analyzed. If the application is approved, the third step is the funding stage, followed by the repayment period, and the aftermath.
1. The Online Application
This was the easiest and fastest part of the whole process. I managed to complete the whole application in roughly 5 minutes. After approximately 5-10 more minutes, I already received an answer. However, keep in mind that this is not necessarily a norm. It can take up to 24 hours to get a response.
Soft Credit Pull
One of the advantages of applying through Fundbox is that the company only performs a soft credit pull. This won’t affect your credit score, but there are other platforms that carry out a hard credit check, which can have a negative impact on your score.
One of the essential aspects I had to mention during the application was whether I wanted a revolving line of credit or a one-time term loan. Then, Fundbox allowed me to choose the repayment terms. The two available options were 12 to 24 weeks or 24 to 52 weeks.
As you might expect, Fundbox also requires a basic set of personal information. I had to provide my identification information, my company’s business name, my company’s address, and a few other details.
The next stage was providing information about myself as the owner of the company. Some of the aspects Fundbox wanted to know were the percentage of ownership I had in my business, and if I was the key decision-maker.
A pleasant surprise was to find out that, unlike other lenders, this platform doesn’t ask for a complete business plan. Not having to provide one expedited the application, which was exactly what I wanted.
The Business Checking Stage
The next thing I had to provide was the banking information of my business. This was necessary because after the platform approved my loan, it electronically transferred the funds to this bank account.
One aspect you should pay attention to before you complete your application is the fine print message in the Business Checking section. It says that after you finish the application, Fundbox and its bank partners get access to your bank account activity.
The platform and its partners will be allowed to deposit money in your account, but they will also be allowed to debit from that account.
What basically happens is that Fundbox deposits the loan directly into your account. Then, as part of your agreement, it also withdraws pre-determined payments according to the established schedule. This repayment schedule is what enables the platform to provide quick loans even to borrowers with a less than perfect credit score.
Funbox is a fast solution for small businesses. It sometimes issues loans within minutes after the application is approved. However, remember that there is also a strict repayment schedule.
2. Repayment Options
As I previously mentioned, Fundbox provides two different payback options. I was able to choose between repaying my loan on a 52-week schedule or a 24-week schedule and each option had a different interest rate.
The 24-Week Repayment Option
Here is what I found out about the 24-week repayment schedule. From the 1st through the 12th week, you will be charged a certain amount of principal, as well as a specific interest that will amount to a fixed weekly repayment.
From the 13th through the 24th week, you will still have to pay a weekly fixed amount, but the percentages of principal and interest change.
Since I had a loan of $2,000, my weekly payment amounted to $96. In other words, to repay the loan, I had to pay $312 in interest over 24 weeks, which meant an interest rate of around 31%.
However, keep in mind that this is calculated as an annual interest rate. The interest I actually paid was only 15-16% of the loan amount.
The 52-Week Repayment Option
I also made a simulation for the 52-week repayment schedule to show you how the principal fees and the total weekly amount change for the same loan – $2,000. With this repayment program, the weekly interest fee for the first 26 weeks reached $13.50.
An important factor I noticed while comparing the two programs was that the total interest fee can be reduced with the 52-week option if the loan is paid off earlier. This is possible since the interest is charged weekly for a lower amount compared to the 24-week option.
So, if you can repay the whole loan according to the 52-week program faster than anticipated, you will manage to lower the interest fee.
3. Funding the Loan with Fundbox
It’s very easy to get funds from Fundbox once your loan application is approved. After the platform informed me that my application passed the approval stage, I simply had to wait to receive the money in my bank account.
There are only a few more aspects you should consider before completing your application. Since there is an agreement that regulates Fundbox loans, you can’t get the money unless you accept it.
To do this, you simply have to agree to the platform’s Terms and Conditions. I didn’t immediately agree to these terms because I first wanted to take some time to read them. During this time, I also got an email from Fundbox in which a representative offered to help me if I needed more information to move on. The representative gave me his phone number to reach out for any questions.
Another aspect you should be aware of is that on the fifth day after you receive the funds, Fundbox will already withdraw the first payment from your account. Afterward, the payments will be taken on a weekly basis. Therefore, make sure you always have money in your account.
4. Paying Back the Fundbox Loan
I had two options to pay back my Fundbox loan. The first one was to let the automatic scheduled repayment system work on its own, which meant that the interest fee would be charged weekly. The second option was to choose the 52-week repayment plan and pay off the loan faster to minimize my interest charges and gain a better return on investment.
5. The Aftermath Stage
Even before I managed to pay off my debt, I had some questions that probably most small business owners ask themselves before applying for a loan:
Would my Fundbox loan negatively affect my credit?
Would I be able to make profits from my loan?
In my case, things went quite well.
- No credit impact – because Fundbox only did a soft credit pull, the loan had no impact on my credit score.
- Profits – I managed to double the amount I took the loan for. Even after I paid the interest, I made considerable profits by using the equipment loan.
Is Fundbox The Right Solution For You?
Before I decided to partner with Fundbox, I had two main requirements – getting funds as fast and as easily as possible. If these are also your priorities – you need money fast and you’re looking for a simple application process, then Fundbox can be the ideal lender for you. Another advantage is that even borrowers with poor credit scores can get approved.
Moreover, if you apply for a new loan after paying off the previous one in a timely manner, Fundbox offers additional advantages. For example, you will be able to borrow more money in the future and pay a lower interest rate.
After I paid back my first Fundbox loan, I received an email with an offer for a new one that had more favorable terms. So, if you think you might need more than a loan for your small business, Fundbox is worth working with.