Fundbox Pay vs Bluevine Capital Inc.
Here is a comparison of alternative funders, Fundbox and Bluevine. Both offer invoice finance, just in slightly different ways. Fundbox uses the outstanding invoices as collateral for a line of credit, known as invoice financing. They have also expanded with a vendor financing product, Fundbox Pay.
Bluevine puts a 21st century spin on old-fashioned invoice factoring, with faster approval and funding times than most traditional banks. After reading this comparison, be sure and check out our Fundbox reviews or Bluevine reviews pages to see how we scored each company using our proprietary metrics.
Here’s a quick summary for the Fundbox vs Bluevine discussion:
· Founded: 2013
· Funding Provided: Invoice financing, line of credit, Fundbox Pay
· Minimum Revenues Required: ~ $50,000 annually
· Minimum FICO score: None to apply
· Fees: Start at 4.66% per week
· Useful For: Many B2B companies.
· Funding Received: As fast as next business day
Fundbox is an online lender based in California. The fintech provides invoice financing and lines of credit for small businesses. Providing funding in amounts as low as $1,000, Fundbox is ideal for smaller businesses. This is great news for startups since regular banks or credit unions aren’t overly-excited about financing such operations.
With accounts receivable financing, a revolving line of credit is created, collateralized by outstanding customer invoices. It’s a shrewd way to supplement cash flow during seasonal slowdowns and provide a buffer for net working capital.
To access the small business financing, customers need to connect through either their business checking account or small business accounting software. Luckily, Fundbox’s lending platform is compatible with major software brands including Quickbooks, Xero, Jobber, kashoo and Zoho.
Once approved for Fundbox’s Direct Draw, you can access next-day funding from the outstanding invoices. According to the Fundbox website, their weekly fees start at 4.66% and may change over time.
One feature we love is Fundbox Pay. If you regularly invoice customers (and wait for repayment) ask them to apply for Fundbox trade credit. Fundbox provides credit directly to them, allowing your business to get paid faster and capitalize on opportunities.
It’s OK if your business has mediocre credit. After all, it is the creditworthiness of your customers that matters the most, not your business, since Fundbox will be supplying the trade credit (net terms) to them. Recall that trade credit is on our list of bad credit business loans and is a widespread method of accessing credit.
Further, if you offer ecommerce checkout, you can add Fundbox Pay as a payment option to your shopping cart at checkout. Fundbox is becoming a powerful pos system (point of sale) for small and medium B2B companies.
On the other side, your business receives near-immediate funding from invoices that may have previously taken around 60 days to monetize.
Bluevine Capital Inc.
· Founded: 2013
· Funding Provided: Lines of Credit, invoice factoring.
· Minimum FICO: 530 (if factoring)
· Annual Revenue Minimums: $100,000
· Lending Decision: As quick as 24 hours
· Origination Fee: $0
Bluevine has reportedly facilitated over $1.5 billion in small business lending financing since inception. They offer a variety of financing products including revolving lines of credit and term loans (Bluevine’s flex line of credit and term loans are offered through Celtic Bank of Utah). They maintain offices in California, New Jersey and Louisiana.
Arguably the more recognizable of the pair, Bluevine advertises nationally on the financial news network CNBC. One commercial featured a testimonial revealing a common small business problem-making payroll. Cash flow crunches are common in small businesses, especially those that rely on credit sales. They even displayed a special website for new users, trybluevine.com.
The ad promotes flexible small business credit lines of up to $250,000 through an application completed online and a funding decision relayed “in minutes”. Remember, credit scores are a significant factor in the decision-making algorithm of online small business loans. But if your business is structured as an llc or corporation, there will not be a hard credit pull at any point in the process.
Unlike Fundbox, Bluevine Capital Inc. also offers accounts receivable factoring, the discounted sale of outstanding invoices to a third-party. In such a transaction, the funding comes via an asset sale, not a loan. As such, it’s an option for small business owners in the B2B space who are not interested in taking on debt.
A common complaint is the requirement by some factoring companies that customers factor all invoices during the relationship. Bluevine is a little more flexible, allowing clients to pick and choose which invoices to factor. Be sure to check our factoring company reviews to find out which other companies offer spot factoring.
Once the invoice program begins, the factoring fee is auto-deducted on a weekly basis. After 90 days, if the invoice has not been paid, you may be required to buy it back and reimburse Bluevine’s advance. This is not unusual among invoice factoring companies.
Finally, many factoring companies communicate with the delinquent, account debtor for repayment, as a debt collection agency might. Both Bluevine and Fundbox do not, allowing you to maintain the relationship with your customer.
Fundbox vs Bluevine: Financial Backing
Being Silicon Valley darlings, it’s no surprise both companies have succeeded in attracting plenty of private capital including Khosla Ventures, Spark Capital, 83 North and Microsoft’s M12. But while both are venture capital backed, there are noticeable differences.
Bluevine CEO Eyal Lifshitz actually was a venture capitalist himself with Greylock and worked at management consulting firm McKinsey, Mr. Lifshitz has developed a solid understanding of what is needed to help businesses succeed from a strategic, and certainly financial, perspective. For example, at Greylock was an early investor iZettle, which specializes in credit card processing for small businesses.
However, Fundbox boasts a few heavyweights including former Citigroup CEO Vikram Pandit and Amazon founder Jeff Bezos. Mr. Bezos being on among the investors is interesting given that Amazon lending is really taking off. Of course, access to small business financing through Amazon is by invitation only, so that’s a noticeable difference with Fundbox.
Finally, both companies joined the Innovative Lending Platform Association, ILPA, in 2018.1 Members join the organization for many reasons including improving trust and broadening access to small business funding.
The financial technology of both companies make the funding process fast and easy. Fundbox offers their Fundbox Pay service which is best in class. But while both companies provide excellent small business funding, we give the edge to Bluevine since they are a true factoring company. As site readers know, we laud the benefits of factoring receivables mostly that it incurs no additional debt. Nothing is as dangerous to a fledgling business as being overloaded with debt, especially late in an economic cycle.
Critics of factoring point to high factoring fees, then annualize the numbers to display a lofty APR. But annualizing the rate may be comparing apples to oranges. With Bluevine, business owners can pick and choose which invoices to factor. Bluevine charges weekly “interest” during the time until invoices are repaid, generally a half to one percentage point per week, but they advertise as low as 0.25% (depending on Libor). After 90 days outstanding, the small business may be required to buy back the invoices. This is not unusual among factors and it allows for lower overall rates for customers.
Companies with Similar Services to Fundbox Pay and Bluevine Capital:
· Loan Me