Fundbox vs. Kabbage: Which Is the Better Lender for Your Business?

Meredith Wood

Meredith Wood

Editor-in-Chief at Fundera
Meredith Wood is the editor-in-chief at Fundera. She has specialized in financial advice for small business owners for almost a decade, and is sought out frequently for her expertise in small business lending. Meredith’s advice has appeared in the SBA, SCORE, Yahoo!, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, and more. Email:
Meredith Wood

As a borrower who doesn’t live and breathe the world of online small business finance, alternative lenders likely aren’t names that you’ve had the opportunity to get to know and trust. Not everyone has spent time analyzing Fundbox vs. Kabbage, or BlueVine vs. OnDeck. It’s true: These names weren’t plastered on the bank where you opened your first checking account as a teenager. Nor have they had a community branch in your neighborhood for years.

But working with online alternative lenders presents a great opportunity for business owners to obtain financing quickly, affordably, and under realistic qualification standards—something that for more than a decade now has been all but impossible through a traditional bank.

Without the opportunity to meet with these new lenders face to face, how do you know which online alternative lender to trust with your small business loan? If you’re comparing Fundbox vs. Kabbage, for example, how do you know which of these lenders will be the best choice for your business’s needs?

To start, you read to an article just like this one.


The nice thing about being an online small business loan marketplace is that we’ve matched thousands of small business owners with loans from dozens of lenders. (It’s quite literally our job here at Fundera.) All of those hours have allowed us to evaluate and review nearly every online lender that offers products for small businesses, and both Fundbox and Kabbage are lenders that we work with every single day.

Our borrowers can attest that both are fantastic companies to do business with. However, Fundbox and Kabbage offer very different loan products for different kinds of customers, so the best choice for you depends on your business’s unique needs and financial situation.

To help you evaluate Fundbox vs. Kabbage and identify the best choice for your small business loan, let’s break down how each of these lenders work, the loan products they offer, and what their own customers have to say.

All About Fundbox

Fundbox is one of Kabbage’s top competitors, though they have different products.

For service-based businesses with a B2B (business-to-business) model, financing through Fundbox can be a great solution for maintaining positive cash flow while you await payment on one or several major invoices. (It’s definitely worth noting that Fundbox does also work with plenty of customers outside of the B2B model, so if that’s you, you should still certainly read on.)

Before we go any further, here’s an at-a-glance look at the terms of invoice financing solutions from Fundbox:

  • Loan Amount: $100-$100,000
  • Loan Term: 12 weeks
  • Loan Rates: Approximately 0.5% of invoice amount per week
  • TrustPilot Score: 9.7/10

Sound like a potential fit? Here’s what you need to know about working with Fundbox for your small business loan.

Best for: B2B Companies Who Regularly Invoice Customers

Simply put, the Fundbox financing model is designed to finance B2B businesses on the basis of their outstanding invoices. So if you’re not a B2B, don’t use invoices to bill your customers, or if the amount of money you need to borrow doesn’t line up with your current accounts receivable, then Fundbox probably won’t be your best choice.

However, if you do invoice customers and are currently facing a cash flow challenge as you await payment on invoices, Fundbox could be your perfect fit. It offers one of the simplest, fastest underwriting processes of any lender—and unlike most invoice financing companies, Fundbox will advance 100% of your outstanding invoices.

From there, you’ll pay back the loan over 12 weeks with automatically withdrawn weekly payments and predictable fees. Fundbox doesn’t directly collect funds from your customers, so you maintain total control of your customer experience. And if your customers happen to pay their invoices ahead of schedule, you can pay off your loan early with no prepayment fee.

Best for: Companies Using Cloud-Based Accounting Systems

In order to obtain invoice financing from Fundbox, you’ll be asked to connect your accounting software directly to their system, granting Fundbox access to detailed analytics about your past invoices as well as your currently outstanding receivables.

Once your financing has been approved, this connection will also give Fundbox access to timely updates as your customers issue their payments.

Fundbox’s system is readily engineered to work with cloud-based accounting systems including, but not limited to:

  • QuickBooks Online
  • QuickBooks Desktop
  • Freshbooks
  • Harvest
  • Wave
  • Xero
  • SageOne
  • InvoiceASAP
  • Clio
  • Jobber
  • Zoho
  • Kashoo

And more!

5 Steps to Invoicing Financing Through Fundbox

  1. Create a free Fundbox account.
  2. Connect your accounting software.
  3. Choose eligible invoices to finance. (These are called “clear” invoices.)
  4. Once you’re approved, an advance is transferred to your bank for the full amount of that invoice.
  5. Each Wednesday for 12 weeks, your account will be debited for payment.

Once you’ve been approved for initial invoice financing, you’ll be able to keep your accounting software connected to Fundbox and request a cash advance at any time. Simply select the invoice you want funded, and you’ll see the cash appear in your account almost instantly.

Fundbox’s Eligibility Requirements

The best news for business owners is that because of this unique invoice-based lending model, the financial standards to qualify for a loan from Fundbox are relatively limited. Here’s a quick glance at the average requirements you’ll need to meet:

  • Minimum Time-in-Business: 3 months
  • Profitability: No
  • Collateralized: No 
  • Personal Guarantee?: No
  • Annual Revenue: Fundbox doesn’t check your annual revenue
  • Entity Type: Any

Fundbox Is Also Great for Keeping Personal and Business Finances Separate

In addition to Fundbox’s invoice financing, they’ve also added a new product called Direct Draw. This is a business line of credit, and it’s best for entrepreneurs who need access to capital, but don’t want to commingle finances.

Fundbox underwrites Direct Draw business loans—which go up to $100,000—using your business bank account transactions and other business data sources, and determines your eligibility and fee based on that data. Your personal credit score is just one small piece of the equation, and there’s no hard pull until you draw funds—so there’s no risk to your score until you’ve seen your credit limit.

In ways, Direct Draw works like an ATM—you can withdraw pre-selected percentages from the line of credit, or make your own—and you only pay a fee on what you use. The loan term is 12 weeks, although there’s no early repayment penalty, and since it’s a flat-fee loan, you save money if you do.

An overview of Fundbox’s Direct Draw requirements:

  • Minimum Time-in-Business: 3 months
  • Profitability: No
  • Personal Guarantee?: No
  • FICO Credit Score: Fundbox has no minimum credit score requirement
  • Annual Revenue: $50,000

A business bank account will be required for this one. But it’s a great pick for smaller professionals who do lots of project work, like web designers or consultants; tradespeople who are also project-based and may need access to materials, like landscapers or plumbers; and manufacturers who need direct access to capital quickly.

As you can see, Fundbox can be a great option for businesses in need of a cash advance while awaiting payment on invoices. But as you make a borrowing choice for your own business, we wouldn’t expect you to rely on our word alone.

Instead, you can take a look at the hundreds of independent TrustPilot reviews of Fundbox from its existing customers to come to your own conclusion about this business financing option:

Saved My Business During a Difficult Time
They came through when no one else would. No credit check, just going on the health of the business from an analysis of my bank account. The modest funds they made available to me literally saved me, as a failed HVAC hit me hard. I’m trying to grow a small business, and access to funds like this as needed helped me fill a cash flow gap that occurs during the holidays. Thanks, Fundbox! Your support means a lot to me personally. You’ve done a lot of good, and helped at a difficult time!
Mathnasium of North Manchester, New Hampshire, on 1/24/2018

When Fundbox Isn’t a Fit

Although Fundbox has few restrictions in terms of your credit history or your business’s financial qualifications, this lending solution certainly isn’t the right solution for every business.

Fundbox won’t be a good fit for your business if you:

  • Don’t invoice your customers, or do it so on a regular cycle
  • Won’t be able to repay the loan within 12 weeks
  • Have individual invoices that are worth more than $100,000

All About Kabbage

If you need quick access to working capital for your business but don’t have the option to leverage outstanding invoices, Kabbage might be your perfect solution.

The primary loan product that Kabbage offers is a short-term line of credit. This works very similarly to a traditional credit card in that you’ll be approved for a maximum funding limit from which you can draw upon the balance as needed. You’ll only need to pay interest only on the funds you actually use.

Funds obtained through a Kabbage line of credit can be used for almost any business purpose—and because they aren’t tied to your business’s invoices or any other specific asset, the amount of money you can borrow is based only on your needs and financial qualifications. That flexibility is definitely a bonus, because anyone who knows small business knows it’s anything but predictable.

Here’s a topline, by-the-numbers look at Kabbage lines of credit:

  • Loan Amount: $2,000 – $150,000
  • Loan Term: 6 – 12 months
  • Loan Rates: Flat monthly fee of 1.25% to 10%
  • TrustPilot Score: 9.3/10

Does this seem to potential match your business’s needs? Here’s a closer look at what it means to obtain small business financing from Kabbage.


Best for: Businesses That Need Quick Cash

As a lender, Kabbage is known for two things: speed and flexibility. This lender prides itself on making their application and underwriting process as quick, simple, and automated as possible.

The application process typically takes 1 to 5 days—and once your application has been reviewed and an offer made, you can have cash in your business bank account within minutes.

Along with the ability to obtain approval and funding quickly, Kabbage is also a useful choice for borrowers because their line of credit model offers the flexibility to use those funds only when you need them—you pay interest only on the amount of the loan that is actually outstanding at any given time.

You can pull from your pool of funds up to once per day, and Kabbage will then auto-draft payments from your business checking account according to a previously agreed upon schedule.

Of course, all of this speed and flexibility does come with a significant price tag. To minimize your interest rate, be sure to issue full repayment on your Kabbage line of credit as quickly as you can.

Best for: Borrowers with Poor Personal Credit

Kabbage is also a particularly great option for businesses that don’t have stellar credit. That’s because although Kabbage does check your personal credit score, it isn’t weighed as heavily as the rest of your business information.

Instead, Kabbage will request to connect electronically with one or more of your online banking, accounting, or merchant services accounts in order to evaluate your business’s recent financial history.

Here are a few examples of the accounts that Kabbage may consider:

  • business checking account
  • eBay account
  • Paypal account
  • Amazon lender account
  • Etsy account
  • Yahoo account
  • Square account
  • account
  • Sage account
  • Stripe account
  • Quickbooks account
  • Xero account

Because you’ll be asked to connect at least one of your business’s financial accounts to the Kabbage system (you’ll have better odds if you do more, though), they will review your financial history carefully before making a decision. This offers Kabbage a more holistic view of the internal workings of your business.

Kabbage’s Eligibility Requirements

Along with helping you get cash into your bank account quickly, Kabbage is seen as a great option for many borrowers because of their relatively flexible qualification standards. Here’s a high-level look at what Kabbage’s general requirements in order to consider extending a line of credit to your business:

  • Minimum Time-in-Business: 12 months
  • Profitability: No
  • Personal Guarantee: No
  • FICO Credit Score: Kabbage doesn’t require a minimum credit score
  • Minimum Annual Revenue: $50,000

In addition to these factors, Kabbage does have a few other eligibility requirements for its borrowers. You must be able to show a minimum average bank balance of $2,500, and you may not have filed for personal bankruptcy within the last calendar year.

That said, it is particularly attractive to borrowers that although Kabbage will review your personal credit history, there is no specific credit score that is required as a minimum in order to be eligible for financing.

And just like Fundbox, you can also read thousands of TrustPilot reviews of Kabbage from real customers to help take any fear out of going through the alternative lending process.

Customer Review of Kabbage
I found myself in a very difficult position unexpectedly, and I needed some funding quickly. I applied to Kabbage for a small unsecured loan. I had the needed money in my checking account within 2 days…and this was on a weekend. Great service. Nancy on 1/22/2018

Fundbox vs. Kabbage: Making Your Choice

At its most simple, what you need to know for the comparison of Fundbox vs. Kabbage is that they work with two different loan types. Fundbox offers invoice financing, while Kabbage offers lines of credit. But the best part of both of these lenders? They both work with less established businesses as well as borrowers with less-than-stellar credit scores.

If you’re struggling to choose between Fundbox and Kabbage for your own financing needs, here are some quick and easy questions to ask yourself:

Have a B2B business model?

Do you have outstanding customer invoices?

Don’t use an invoicing system for customers?

OR Need to borrow more than your current outstanding invoices?

Can you repay your financing within 12 weeks?

Need a longer repayment term?

Most businesses will find themselves in need of a loan at some point—and it can be difficult to decide where to turn for that funding. Fortunately, both Fundbox and Kabbage can be a great option for business owners. And now that you understand what Fundbox vs. Kabbage can offer for small business owners and how they differ from each other each, it should be pretty simple to determine which will be the best fit for your business.

Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone. They haven’t been reviewed, approved, or otherwise endorsed by any of the companies mentioned above. Learn more about our editorial process and how we make money here.
Meredith Wood

Meredith Wood

Editor-in-Chief at Fundera
Meredith Wood is the editor-in-chief at Fundera. She has specialized in financial advice for small business owners for almost a decade, and is sought out frequently for her expertise in small business lending. Meredith’s advice has appeared in the SBA, SCORE, Yahoo!, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, and more. Email:
Meredith Wood

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