Fundbox vs. American Express® Business Line of Credit: Which Is Better for Your Business?

Fundbox and American Express are both online lenders that offer short-term business lines of credit. These small-business loans are good options for business owners who want access to working capital — especially for those who can’t qualify for bank financing.

Although the two lenders share a number of similarities, Fundbox is well suited for startups and business owners with bad credit (a FICO score below 630). The American Express® Business Line of Credit*, on the other hand, is a better choice for business owners with higher credit scores, as well as those that are looking for a line of credit with more payment flexibility.

Here’s a breakdown of Fundbox versus the American Express® Business Line of Credit, including how they compare in terms of interest rates, eligibility requirements and application processes.

Fundbox vs. American Express® Business Line of Credit: Deciding factors

Fundbox vs. American Express® Business Line of Credit: Comparison

Small-business loan types

Both Fundbox and American Express offer business lines of credit that allow you to draw funds from your line when you need them, and only pay interest on the money you draw. You can use a line of credit from Fundbox or American Express for a variety of business purposes, such as managing cash flow gaps or covering short-term expenses. Fundbox offers credit lines up to $150,000 and American Express offers lines from $2,000 to $250,000.

Fundbox also includes a Flex Pay service that allows you to pay your vendors directly from your line of credit. This service gives you three business days to repay Fundbox with no fees; after that period, this functions like any other draw on your credit line.

Fundbox is in the process of launching a term loan, but as of this writing, the product isn't yet available for all borrowers.

American Express doesn't provide any additional lending products, but it does offer the American Express® Business Checking account, among other products.

» MORE: Bluevine vs. Fundbox: Compare business lines of credit

Interest rates and terms

Fundbox and American Express are both short-term lenders; however, Fundbox will require weekly repayments over a shorter period of time — 12 or 24 weeks — while American Express offers monthly payments over six, 12, 18 or 24 months.

American Express charges a fee for each month that you have an outstanding balance. You’ll pay this fee in addition to your monthly loan principal payments. The monthly fee that you receive will range based on your loan terms (as well as creditworthiness and other factors):

Total monthly fees incurred over the loan term range are:

Fundbox charges interest as weekly fees, and when you draw on your credit line, you repay your funds with amortized weekly payments. Weekly fees vary based on your business credentials and start at:

• 12-week terms: 4.66%.

• 24-week terms: 8.99%.

Let’s break down an example and compare what your costs might look like on a $30,000 line of credit draw with Fundbox versus the American Express Business Line of Credit:

Fundbox

• Draw amount: $30,000.

• Weekly rate: 8.99%

• Term: 24 weeks.

The estimated annual percentage rate on a line of credit with these terms would be roughly 19.53%.

American Express

• Draw amount: $30,000.

• Monthly rate: 3%

• Term: Six months.

Although an 8.99% weekly rate may seem much higher than a 3% monthly rate, you can see in the examples above that Fundbox and American Express ultimately have comparable costs for line of credit draws over the same term in this instance.

Before accepting a business line of credit from any lender, it’s important to calculate their fees into an APR. This number will give you the true cost of the loan and make it easier to accurately compare offers from different lenders.

» MORE: Business line of credit calculator: Estimate payments and interest costs

Additional fees

Neither American Express nor Fundbox charges application fees, origination fees, annual fees or monthly maintenance fees. Additionally, with either of these lenders, you can repay your line of credit balance early without facing prepayment penalties.

You may face fees from American Express or Fundbox for late payments or nonsufficient funds (also called return payment fees). The details of these fees will be outlined in your business loan agreement.

Borrower requirements

Fundbox and American Express will work with businesses that have been operating for less than two years and those with less-than-perfect credit histories, making them both good options for small-business owners who can’t qualify for bank loans.

Here’s what you need to qualify for a line of credit for American Express versus Fundbox:

*The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.

It's important to remember, however, that all businesses are unique and are subject to approval and review.

American Express will also require you to sign a personal guarantee as part of your loan agreement. Fundbox, on the other hand, will file a blanket lien — which gives them the right to seize a business’s assets in the event of default — on all borrowers and may require you to sign a personal guarantee.

» MORE: Compare the best business loans for bad credit

Application process

Both American Express and Fundbox offer streamlined application processes that allow you to apply with minimal paperwork.

To apply with either lender, you’ll create an account on their website and then provide basic information about you and your business. Next, you’ll connect your business bank account or other financial accounts to the American Express Business Blueprint™ or Fundbox platform.

Before you submit your application, American Express will ask for your consent to perform a hard pull on your credit. This will impact your credit score.

Fundbox will only perform a soft credit inquiry (which will not impact your credit score) if you use your credit report as a data source. The lender will only perform a hard credit pull when you draw on your line of credit for the first time.

Fundbox can provide a decision as fast as the same day as you apply, and you can receive funds as soon as the next business day.

» MORE: How to apply for a small-business loan