The Funding Circle company works by connecting established small businesses looking for funds with investors. Funding Circle offers term loans that are funded faster than an SBA or bank loan. It also provides some of the most affordable rates in the industry with no prepayment penalties.
Today, Funding Circle serves small businesses in the U.S., Germany and the Netherlands. In 2013, it merged with Endurance Lending to enter the U.S. market. This review will focus on Funding Circle’s U.S. division.
Consider Funding Circle if you:
- Have been in business for 2 years
- Need extra working capital fast
- Need to refinance a debt
- Have good credit
Funding Circle Term Loans
Funding Circle offers term loans as its main product. These types of loans provide small businesses with longer repayment periods, lower interest rates and higher limits.
Funding Circle’s term loan fee structure is simple: They charge an origination fee ranging from 3.49% to 6.99%. The rate you get will depend on the strength of your credit and business profile. There are no prepayment penalties, and remittance is due on a monthly interval.
Funding Circle term loans at a glance:
- Loan amount: $25,000 – $500,000
- Repayment term: 6 months – 5 years
- Interest rate: 4.99% – 22.99%
- Origination fee: 3.49% – 6.99%
Funding Circle Lender Review
Once you submit your online loan application and required documents, Funding Circle gives you back their offer, interest rates and the origination fee within a day. If you accept their terms, you’ll receive funding in as few as 5 days.
Interest rates are determined by how long your business has been in operation, the type of industry it operates in, term length, credit score and overall business health.
All Funding Circle loans are secured. The company requires that a lien be placed against business assets along with a personal guarantee from all business owners with more than 20% stake in the business.
Funding Circle reports borrower repayment activity to Experian and Dun & Bradstreet (D&B), which can help businesses build credit.
Funding Circle offers term loans to small businesses through investors. They invest through the Funding Circle Securities, the affiliated broker-dealer of the U.S. branch. In addition, Funding Circle Securities is registered with the U.S. Securities and Exchange Commission (SEC) as well as the Financial Industry Regulatory Authority (FINRA).
The Pros of Funding Circle
- Fast loan approval
- No prepayment penalties
- Competitive rates
- Strong customer support
The Cons of Funding Circle
- Stringent loan requirements
- It’s not ideal for startups
Requirements for Funding Circle
-
Time in Business
2 Years
-
Personal Credit Score
660
-
Judgments
Have no bankruptcies over the past 7 years
-
Liens
Have no tax liens over the last 10 years
What You Need to Apply
If you’re applying for loans below $300,000, you’ll need:
- Your most current personal tax returns
- Two recent business tax returns
- Six months of business bank statements
For loans above $300,000, you’ll be required to provide:
- Business income statements and balance sheets
- Outstanding business loans
- Credit worksheets
- Most recent personal tax returns
- Two current business tax returns
- Business bank statements for the last 6 months
Funding Circle Reviews
Funding Circle’s BBB has 18 positive reviews and 4 complaints on record. Borrowers loved that it provides a straightforward loan application process, and most were satisfied with the level of support they received from their dedicated account managers. Due to this, Funding Circle boasts an overall BBB rating of A+.
It’s worth mentioning that a majority of the complaints are on the investing side of their service. Claims that came from borrowers were that you end up paying higher interest rates compared to banks.
Final Word
Funding Circle is an excellent peer-to-peer lending service with exceptional customer support. Small businesses get quick access to funds compared to bank loans.
One major highlight is that Funding Circle offers zero prepayment penalties on its term loans. This makes Funding Circle loans an excellent option for refinancing debts.
The affordability of its loans makes Funding Circle ideal for established businesses with a good credit score.
