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

Fundbox is good for startups and business owners with bad credit, while Kabbage is better for more payment flexibility.
Jul 15, 2022

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Fundbox and Kabbage 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). Kabbage, 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 Kabbage, including how they compare in terms of interest rates, eligibility requirements and application processes.

How Much Do You Need?

with Fundera by NerdWallet

Fundbox vs. Kabbage: Deciding factors

Fundbox

Kabbage

Kabbage - Line of credit
Apply Now

on Kabbage's website

Loan amount

Up to $150,000.

$2,000 to $250,000.

Estimated APR range

Fundbox charges interest as weekly fees, starting at:

  • 12-week terms: 4.66%.

  • 24-week terms: 8.99%.

Fundbox says its fees equal an estimated APR of 10.1% to 79.8%.

Instead of traditional interest, Kabbage charges monthly fees depending on your loan's term:

  • Six-month term: 0.25% to 3.50%.

  • 12-month term: 0.25% to 2.75%.

  • 18-month term: 0.25% to 2.50%.

Additional fees

  • No application fee, account maintenance fee or origination fee.

  • No prepayment penalties.

  • Late payment and nonsufficient funds fees may apply based on information provided in your loan agreement.

  • No application fee, account maintenance fee or origination fee.

  • No prepayment penalties.

  • Late payment and unsuccessful payment fees may apply based on the information in your loan agreement.

Terms

12 or 24 weeks.

6, 12 or 18 months.

Repayment schedule

Weekly.

Monthly.

Funding speed

Get approved as fast as the same day and receive funds the next business day. Processing may take a little longer on weekends or holidays and may also vary depending on your bank.

As soon as the same day. May take up to three business days for funds to process, depending on your bank.

Fundbox vs. Kabbage: Comparison

Small-business loan types

Both Fundbox and Kabbage 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 Kabbage 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 Kabbage offers lines up 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.

Kabbage doesn't provide any additional lending products, but they do offer a payments platform, as well as the Kabbage business checking account.

Interest rates and terms

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

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%.

Kabbage 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):

  • Six-month term: 0.25% to 3.50%.

  • 12-month term: 0.25% to 2.75%.

  • 18-month term: 0.25% to 2.50%.

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 Kabbage:

Fundbox

  • Draw amount: $30,000.

  • Weekly rate: 8.99%

  • Term: 24 weeks.

Weeks

Repayment toward principal

Fees

Total weekly payment

One to eight.

$1,109.54.

$252.84.

$1,362.38.

Nine to 24.

$1,320.24.

$42.14.

$1,362.38.

Totals:

$30,000.

$2,697.12.

$32,697.12.

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

Kabbage

  • Draw amount: $30,000.

  • Monthly rate: 3%

  • Term: Six months.

Months

Repayment toward principal

Fees

Total monthly payment

One to two.

$5,000.

$900.

$5,900.

Three to six.

$5,000.

$225.

$5,225.

Totals:

$30,000.

$2,700.

$32,700.

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 Kabbage 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.

Additional fees

Neither Kabbage nor Fundbox charges application fees, origination fees, monthly or annual 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 Kabbage 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 Kabbage 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 Kabbage versus Fundbox:

Fundbox

Kabbage

Personal credit score

600 or higher.

640 or higher.

Time in business

Six months or more.

One year or more.

Annual revenue

$100,000 or more.

$3,000 or more (per month).

Business checking account required

Yes.

Yes.

Kabbage 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.

Application process

Both Kabbage and Fundbox offer streamlined application processes that allow you to get a business line of credit quickly with minimal documentation.

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 Kabbage or Fundbox platform.

Before you submit your application, Kabbage 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. Similarly, Kabbage may be able to approve you for a line of credit within the same day. Funds may take up to three business days to process, depending on your bank.

Is Fundbox or Kabbage right for your small business?

Kabbage and Fundbox both offer accessible business lines of credit that are good options for small-business owners who don’t have perfect credit histories, as well as less-established businesses.

If you’re trying to choose between the two, here’s what you can keep in mind:

Consider Fundbox if:

  • You have less than one year (but at least six months) in business.

  • You have a personal credit score between 600 and 639.

  • You can afford weekly repayments over a short term.

  • You want to use a Flex Pay service to pay vendors directly.

Consider Kabbage if:

  • You have annual revenue between $36,000 and $99,999.

  • You want a credit line over $150,000.

  • You prefer monthly repayments over a term up to 18 months.

  • You’ve been in business for one year or more.

  • You have a credit score of 640 or higher.

Compare small-business loans

For a look beyond Kabbage or Fundbox, check out NerdWallet’s list of best small-business loans. Our recommendations are based on the market scope and track record of lenders, the needs of business owners and an analysis of rates and other factors, so you can make the right financing decision.