Fundbox: An alternative to the invoice factoring or discounting

Fundbox: An alternative to the invoice factoring or discounting -

If you visit the homepage Fundbox, you do not see the words invoice factoring or short-term corporate loans. Instead, the heading reads:

to overcome cash flow gaps. Get Paid immediately.

One of the first things that was Eyal Shinar, CEO Fundbox, in a recent interview said to me: "Companies do not like invoice factoring." During invoice factoring, there are many varieties, a common variant contains a company their invoices to a factoring company in exchange for a certain amount of money in advance to sell. The factoring company then proceeds to collect lists of the company's customers on the bills the money. (You do not know what is invoice factoring? Read our article How invoice factoring works for small businesses)

Many companies do not like to a third party a direct relationship with its customers. The actions of the factoring company to collect the "eager" money could affect their relationship with the customer.

However Factoring companies serve a very important function. It enables companies to overcome temporary shortages in their cash flow. While costs can be consistent or have to pay for a big job in advance, the payment for the work can often get done 30, 60 or 0 days after work. Eyal cited research that should have been estimated to about two months of "normal" operating costs on hand function smoothly.

may While traditional factoring customer relationship problems cause that traditional lenders (banks) usually do not want to lend small amounts for a short time for small businesses. If they do, through a traditional working capital loans, they usually invite a business for the right to borrow money, regardless of whether they actually borrow money.

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Fundbox is a solution to the problem of short-term working capital. What's Fundbox?

1) Fundbox provides 12 weeks loans to small businesses. (The CEO would call it an advance.)

2) payment for these loans (including principal, interest and fees) will be deducted from a bank account of the company into 12 equal amounts of weekly Base.

3) There is no penalty for early payment. In fact, the rate on the loan is reduced when the loan is redeemed early.

Point 3 is very important. There are a number of companies, the interest calculated on short term small business loans calculate. In other words, the business is responsible interest for the entire term of the loan for the payment, regardless of when it has paid off. With Fundbox the borrower pays interest only for the time the money is actually borrowed. For example, if a company has a large bill comes through in 4 weeks has, and Fundbox pays off when the bill comes, the company has effectively received a 4 weeks Credit.

There are two other ways in which Fundbox loans connected to invoices:

1) the amount of credits are tied to particular invoices, that are scheduled for payment in the near future. If a company Fundbox used, bring certain bills to get up front payments of Fundbox. The loan will be coordinated effectively with the future demands, which should prevent the re-payment of the loan to create a new cash flow problem for the borrower.

2) The interest rate of the loan not only on the creditworthiness of the borrower, but to a lesser extent, the company is bound to get the bill. At one level, this makes no sense, because the borrower Fundbox back, whether to pay the bill paid. However, this practice encourages companies to borrow money with bills that they have a certain level of confidence, is paid. If the invoice is paid, the company will pay the money on hand to Fundbox back.

I want to point out that the CEO of Fundbox strong theme took with my description of the product of the company as a short-term business loans. It is very, very different from anything else out there in the small business loan space.

There were a few questions that I was eager to ask about Eyal Fundbox.

What is the typical rate

Borrowers to pay between 0.7% and 3.0% of the loan amount in interest per month, but would the typical borrower (Note the editorial staff closer to 2.0%. the Fundbox website has a calculator that you can see the approximate amount allowed, which would be paid paid on a $ 5,000 loan back over the full 12 weeks of the borrowers total between $ would 5243 and $ 5343

may repay each company approved Fundbox to use?

Around 40% of companies that are accepted. However, this figure is both fraudulent applications and those comprising that do not meet the financial criteria. As a rule, we treat companies receive advances up to a time $ 10,000 bills, but this varies from company to company.

Has Fundbox report to the bureaus?

Not in this time.

visit Fundbox

Eyal Shinar, Fundbox CEO

Eyal is an expert in financial services and technology management. As vice president at Battery Ventures, Eyal led many projects and investments in the areas of finance, machine learning, small and medium enterprises and SaaS. Notable examples are IDI Direct Insurance, Istra Research (algorithmic trading), Cortera (online risk solutions for credit professionals), cVidya (Revenue Assurance and Fraud) Lead Space (semantic prospection) Champions Oncology (large data analysis), Sportority (FTBpro) and others. Prior to joining Battery Ventures, Eyal was one of the first employees of Old Lane, a 5.5B NY-based global $ hedge funds (which later was acquired by Citigroup), where he focused on complex options structuring and risk and financial engineering and has also worked for Castle Harlan, firmly leading $ 6B NYC-based buyout. He visited the top percentile program for outstanding students at the Hebrew University (LLB) and later was the recipient of the prestigious Orion scholarship in exact sciences. Eyal holds an MBA from the Wharton School of Business at the University of Pennsylvania.

For more information on Fundbox, click here.

Fundbox extending credit lines of up to $ 25,000. If you need to borrow more capital, recommended weighting factor is BlueVine.

Need some money for your business? Click here to get our free guide. ->
How to get a Small Business Loan

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