Small business loans of up to $500,000 made easy with this established peer-to-peer lender.
Founded in 2010, Funding Circle is a lending marketplace matching lenders and investors to businesses that have been around for at least two years.
We take a closer look what it offers and what you might want to watch out for.
| Product Name | Funding Circle Business Loans |
|---|---|
| Min. Amount | $25,000 |
| Max. Amount | $500,000 |
| Minimum Loan Term | 0.5 years |
| Maximum Loan Term | 5 years |
| Requirements | 620+ personal credit score, 2+ years in business, for-profit business in an approved industry |
- Credit score of 620+
- 2+ years in business
- Must be a for-profit in an approved industry
- No criminal record or bankruptcies in the past 7 years
- Must have payment plan for tax liens of $5,000+
First, do I qualify?
You’re eligible to apply for a business loan with Funding Circle if:
- Your credit score is at least 620.
- Your business is at least two years old.
- You have no criminal record and no bankruptcies in the past seven years.
- You run a for-profit business in an approved industry.
- You’ve put together a plan for paying off tax liens of $5,000 or more.
You won’t be eligible if your business is in one of Funding Circle’s restricted industries.
What is Funding Circle?
Funding Circle is a peer-to-peer lender that connects small businesses with investors in its network. It offers fixed-term business loans that you can use to cover most business-related expenses — paying for new staff, covering a one-time expense, buying new equipment or expanding your business in general.
What makes Funding Circle business loans unique?
As a peer-to-peer business lender, Funding Circle can get your small business funding more quickly than a banks, credit unions and other traditional lenders can. It’s streamlined the loan application process through an intuitive site and responsive customer service team.
What are the benefits of getting a Funding Circle business loan?
- No minimum annual revenue. Your business doesn’t have to make a lot of money to qualify for a loan.
- No prepayment penalties. Save on unnecessary interest by paying off your loan sooner without getting slapped with a fee.
- Faster than a bank. Unlike the weeks or months that can come with a bank loan, you might see approval in 24 hours and get your funds in as few as five days after.
- Solid customer service. Funding Circle’s main customer reviews praise its customer service, which is friendly, approachable and easy to deal with. Its website isn’t bad either.
What to watch out for
- High loan minimum. You’re out of luck if you’re looking for under $25,000.
- Not an option for startups. Your business must be up and running for at least two years.
- Many tiered fees. This provider deducts an origination fee of 0.99% to 6.99% from your lending amount. You also pay 10% extra if your payment is late, plus a $35 insufficient funds fee if you use autopay.
- Robocalls. Some customers complain of prerecorded calls from Funding Circle, even after they paid off their loan.
Compare more business loan providers
Is it safe to get a business loan from Funding Circle?
Yes. It’s accredited with the Better Business Bureau since 2013, which gives it an A+ rating. More than 3,000 Trustpilot users rate Funding Circle an average 9.4 out of 10, and 88% of them rate it “Excellent.”
What about its website?
Funding Circle’s website is secure, but it doesn’t look like they take extra precautions with applications. Its privacy policy also states it’s not liable for any stolen personal information — a potential red flag.
Am I eligible?
You’ll need to meet eligibility requirements for loan preapproval with Funding Circle. But merely meeting these requirements won’t guarantee you a loan.
Minimum requirements include:
- A credit score of 620 or higher. You might be wasting your time with Funding Circle if you have bad credit.
- No criminal record. Includes any criminal charges in the US, but especially felonies.
- Seven years without a bankruptcy. A stiffer requirement than with other lenders, which are typically concerned about bankruptcies over the past two or three years.
- A payment plan for tax liens of at least $5,000. You must prove you can afford to pay off any money you owe to the IRS.
As for your business, it must be:
- At least two years old. No startups or other young businesses.
- A for-profit business. Loans exclude nonprofits, religious organizations and charities.
- Free of bankruptcies for the past seven years. The personal bankruptcy rule also applies to businesses.
Industries that don't qualify for Funding Circle loans
Funding Circle restricts several industries from its financing, including business operating in:Construction
Warehousing
Transportation
Adult entertainment
Speculative real estate
Weapons manufacturing
Gambling
Cannabis
How do I apply?
- Apply for preapproval in a matter of minutes at Funding Circle’s site.
- Go to Funding Circle’s site and click Get a business loan.
- Indicate how much you’re looking for and the type of business you run. Then click Continue.
- Follow the directions to complete your application, carefully reading the terms and conditions before submitting it. This process should take about 10 minutes.
- A personal loan specialist will contact you within the hour to collect and submit your documents.
Once you’ve submitted your documents, an underwriter reviews your application and gets back to you with a final decision in 24 hours. - If you’re accepted, your funds are disbursed within five business days.
What documents do I need to apply?
Funding Circle asks all applicants to provide:
- Business tax returns for the past two years. If you don’t have them on hand, request copies from the IRS.
- Personal tax returns for the past year. Required for everyone that owns at least 20% of your business.
- Business bank statements for the past two months. You’ll need official copies from your bank — not home printouts.
- A business debt schedule. A detailed list of all your business’s debts.
Those applying for a loan of $300,000 or more must also provide:
- An interim financial report. A statement of your business’s finances for the current fiscal year in the form of a balance sheet or profit-and-loss statement.
- A guarantor form. Also called a cosigner form, this requirement applies to businesses with multiple owners that own up to 20% of the company.
I got a Funding Circle business loan. Now what?
You’re now on the hook for monthly repayments through automatic withdrawals from your bank account or a debit or credit card.
If you can, consider setting up autopay to avoid late fees and penalties. Paying with a credit card could come with a 3% fee for each transaction.
Bottom line
Small businesses that have been around for a while stand to get the most out of a Funding Circle business loan. What this provider lacks in turnaround speed, it makes up for with quality customer service.
Still, it’s not for everyone. Be sure to compare other business lenders to ensure you’re making an informed decision.
