Funding Circle is a peer-to-peer (P2P) lender that enables accredited investors and institutions to lend money to small business owners. Through Funding Circle, 77,000 businesses have received a total of $10.9 billion of financing. Businesses can borrow $25,000 to $500,000 with a fixed interest rate that’s as low as 4.99%. Borrowers should have been in business for two years and a personal FICO credit score of at least 620 for business owners or 660 for sole proprietorships.
Funding Circle Pros and Cons
Low rates and fees compared to other lenders
Relatively higher qualifications than some lenders
No prepayment penalty
Not for new businesses
Excellent customer support
Does not offer same-day funding
Who Funding Circle Is Best For
A Funding Circle loan is best for:
- Business owners who are looking for longer repayment terms: Funding Circle offers six-month to five-year repayment periods so businesses that need more time to pay off their loan can choose a longer loan duration, depending on their creditworthiness.
- Borrowers who want a fixed interest rate and monthly payment: Those who want a predictable repayment schedule can budget how much they need to allocate for their monthly loan payment with Funding Circle’s fixed interest rate.
- Those who need more than one loan: Sometimes, additional funding is required by businesses. Although additional funding is handled on a case to case basis, Funding Circle can accept applications for an additional loan once you’ve made six consecutive on-time payments on your current loan.
Funding Circle Costs and Terms
$25,000 to $500,000
11.97% to 29.98%
Up to five years
Funding Circle will determine your interest rate according to your business’s stability, your creditworthiness, your current cash flow, and the loan’s term length. Monthly payments will be scheduled according to the date when you accepted the loan and not on the date when you received the funds.
Do You Qualify for Funding Circle Financing?
Personal Credit Score
At least 620
Time in Business
At least two years
No stated minimum
In addition to the above, borrowers should not have had any history of any tax liens for the past ten years and bankruptcies for the past seven years.
Funding Circle Application Process
Funding Circle requires four steps in applying for a loan. First, a borrower should submit an online application form. Its website states that it can be completed within six minutes. Next, a personal account manager will contact the applicant within an hour to learn more about his business, collect documentation, and find terms that suit his business’ needs. Then, the company’s underwriters will review the application and will provide a decision in as little as 24 hours. An underwriter may also contact the applicant if there are additional questions. Lastly, a loan will be offered, and once accepted, it can be funded within one business day.
Funding Circle Alternatives
Repayment terms up to three years on funding up to $500,000
Traditional bank term loans available nationwide with low rates
Online term loans with repayment terms up to seven years
Bank term loans up to $200,000 with terms up to five years
Evaluating funding options with a free online lending marketplace
What Business Owners Should Know About Funding Circle
Loans are listed on Funding Circle’s marketplace: Loans are funded by investors that range from individual accredited investors to multinational financial institutions.
Up to $1 million of loan total can be borrowed: Businesses, depending on their qualifications, can borrow up to $500,000 per loan. However, if a borrower has more than one business, Funding Circle can lend up to $1 million. It is the maximum loanable amount for borrowers with several businesses, regardless if they have three or more businesses.
Most Helpful Funding Circle Reviews
Online reviews for Funding Circle are generally positive. Almost all reviewers commend the company for its excellent customer service. They also like its straightforward process and fast turnaround time. The few unsatisfied reviewers are from the investors and not from the borrowers, saying that their investment returns are not as good as advertised.
Funding Circle Exceeds Expectations
One user who gave a positive Funding Circle review on Trustpilot initially thought that the reviews he read about the company are too good to be true given his experience with high street banks. When he applied though, the customer support he received and the entire loan process exceeded his expectations. He shared that he was immediately contacted by an account manager after he submitted his application. He likes that his loan was quickly approved and disbursed to his account, adding that the service was professional, efficient, and fast from start to finish.
It Might be Good for Borrowers, but Not for Lenders
One investor who left a negative Funding Circle review on Trustpilot said that the lending platform may be good for borrowers, but he dislikes that investors’ money is locked in. He added that in the eight months he’s been waiting to get his money out, the selling process had changed twice. It is notable, however, that Funding Circle replied to his review—providing him information on how the selling process works and how he can contact them if he has additional questions.
Funding Circle Frequently Asked Questions (FAQs)
Is collateral required for Funding Circle loans?
No. Funding Circle loans are unsecured, but a personal guarantee is required. It also places a lien on certain business assets, such as inventory, accounts receivable, vehicles, and equipment. Funding Circle does not take a lien on real estate.
What fees does Funding Circle charge?
Funding Circle charges a one-time origination fee on every loan they fund, which ranges from 3.49% to 6.99% of the approved loan amount. The fee is determined by the borrower’s creditworthiness and the term chosen. The origination fee is deducted from the loan amount that is going to be released.
Funding Circle does not charge any prepayment penalty fee. For late monthly payments that are 10 days past the due date, a late fee of up to 5% of every missed payment will be charged payable immediately in addition to the missed payment.
Does Funding Circle report a borrower’s payments to credit bureaus?
Funding Circle reports to Experian and Dun & Bradstreet both the on-time and late loan payments. On-time loan payments are not reported to the consumer credit bureaus.
Funding Circle is a good capital lending option for borrowers who have good to excellent credit scores. It is best for business owners who want fixed rates, fixed monthly payments, and an option for longer repayment terms. Borrowers can get $25,000 to $500,000 loan amount, and in some cases, up to $1 million of total loan for borrowers with more than one business. Not sure if it’s right for you? Check out Funding Circle’s top competitors.
What is Funding Circle?
Funding Circle is a global SME loans platform, connecting SMEs who want to borrow with investors who want to lend. Since 2010, investors have lent $7 billion to more than 50,000 small businesses globally through Funding Circle.
Funding Circle News & Activity
- Funding Circle and Alcentra announce strategic partnership to lend $1 billion to U.S. small businesses
- Lending through Funding Circle unlocked 75,000 jobs in 2017
- Funding Circle expands U.S. operations with new office in Denver
Funding Circle Customer Service
Unlike other online lenders, every Funding Circle loan applicant is assigned their own personal account manager who works with each applicant to explain their options, walk them through the process and find the best terms to suit their needs.
What makes your company stand out from the competition?
We understand small business because we were small business owners ourselves. Funding Circle has created a new model that’s faster and better at helping businesses access affordable financing. We connect small businesses with financing in a faster, more transparent way than banks, with competitive, market-driven pricing.
We do this by leveraging technology to better underwrite loans and automate processes, and old-fashioned white glove customer service. We offer market-leading business rates and no penalty for early repayment, make quick, honest decisions in as few as 24 hours after document submission and each borrower gets a dedicated account manager to guide them through the process. For the big banks, lending to smaller businesses isn’t always viable. For us, it is our specialty, and we excel at it.