In 2018, Fundbox unveiled a new payment and credit solution for small businesses serving other businesses (SMB2B) called Fundbox Pay. Although this product is no longer offered, Fundbox can still help you access liquid capital through a business line of credit that can even allow you to draw upon your outstanding invoices.
Our mission with Fundbox Pay was to help make business transactions between SMB2B buyers and sellers a convenient, friction-free, and super fast experience.
Here’s a roundup of the latest media and news coverage for Fundbox Pay.
Fundbox estimates that small and medium businesses-to-business payments are a $5 to $10 trillion market in the US.
Of course, small businesses can already take out loans and credit cards from banks from to pay suppliers—if they can get credit. There’s more demand than supply for small business credit right now, says Karen Mills, a senior fellow at Harvard Business School and former administrator of the US Small Business Administration, especially since the financial crisis of 2008. “During the great recession, a lot of banks pulled their lines of credit for small businesses as they tried reduce their exposure to risks” she says.
American Banker: Online lender’s new target: Small businesses waiting to get paid
“The folks who did my father’s job lived or died on based on their ability to figure out whose money was good and whose was not good,” O’Connell said. “You didn’t make money because you sold well, you made money because you were very good at being an ad-hoc banker to your buyers.”
In home heating, sellers would finance buyers for 30 days. “Things have not changed at all since then,” O’Connell said. “That’s 40 years of nonchange.”
The online small-business lender Fundbox says it has developed a credit and payment product, set to launch Wednesday, that could resolve such problems. It is an experiment that traditional commercial lenders and credit card issuers may want to watch closely.
“By making credit available at the point of the transaction, we’re bringing credit closer to the moment of relevance. We’re trying to make a better transaction for buyers and sellers and addressing the root cause of what drives a lot of cash flow challenges,” [Prashant Fuloria, COO of Fundbox] said, adding that the delay in payment is often the result of liquidity issues on the part of the buyer who, in turn, creates working capital issues for the seller.
The solution is an effort to make B2B payments more efficient for both ends: Suppliers get paid more quickly, while buyers can still enjoy longer payment terms without forcing their suppliers to wait.
Small-business payments are an inefficient mess of unpaid invoices and paper processes that are causing substantial funds to languish and companies to stagnate. One possible solution is to address the cash flow, not the payment mechanism itself.
“The root cause is small businesses get paid late,” said Prashant Fuloria, CEO of Fundbox, a San Francisco-based business intelligence and payments company.
“Our goal is to make transactions between SMB’s serving other SMB’s as simple and fast as buying a cup of coffee,” Tim Donovan, head of Fundbox communications, said in an email. “Think Square, Paypal or Amazon…but for SMB2B. Our platform is designed to be the infrastructure for SMB2B commerce in the 21st Century.”
Crowdfund Insider: Fundbox Launches New Payment & Credit Solution For Small Businesses Serving Other Businesses “Fundbox Pay”
Fundbox, a cash flow optimization tool platform for small businesses, announced last week it has launched a new payment and credit solution for small businesses serving other businesses called Fundbox Pay. The platform reported that it purposefully designed Fundbox Pay to help make business transactions between SMB2B buyers and sellers a dynamic, frictionless, and most important, a fast experience.
PR Newswire: Fundbox Announces New Credit And Payments Solution To Bring $4.5 Trillion SMB2B Transactions Into 21st Century
“Fundbox Pay was designed to be the infrastructure for an already-existing economy that’s been sorely underserved,” said Prashant Fuloria, Chief Operations Officer at Fundbox. “Millions of small businesses provide free capital to other businesses on a daily basis. And yet no one has developed a credit and payment network that delivers the same radical convenience, flexibility, immediacy and overall value that consumer-facing SMBs have the benefit of using – until now. Our goal with Fundbox Pay is to become the point-of-sale platform for this SMB2B market and to make business transactions as simple as buying a cup of coffee.”
How Fundbox Pay Works
If you sell products or services using Fundbox Pay, you will get paid once a buyer confirms the payment, funds arrive as soon as the next business day , similar to how business-to-consumer (B2C) merchants get paid at the point of sale.
When you accept payment through Fundbox Pay, you no longer have to extend net terms or trade credit, and you won’t have to deal with chasing unpaid invoices in order to reconcile your accounts receivables. Just invite your customers to transact with you on Fundbox Pay, and Fundbox will take care of the rest by providing your approved customers with convenient, flexible financing and net terms.