Funding Circle business loans review

Funding Circle is a peer-to-peer service bringing together investors with businesses seeking investment.

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Funding Circle

Funding Circle was founded to create opportunities for both investors and businesses. It helps businesses find funding and helps investors find new businesses to invest in. It was founded in 2010 and has over 50,000 registered members, including local councils, universities and the British government. It raised $150 million (around £116 million) in new venture funding in six April 2015, which brought the business’s value to $1 billion (around £0.8 billion).

If your business is in need of some financial assistance, Funding Circle may be a good option to consider. Through its online marketplace, investors can offer funding directly to small companies to help with growth. The amount of money offered was originally determined via auction. However, since September 2015, Funding Circle has decided the criteria for payment will be the risk category of the businesses in particular, as well as the loan term.

Funding Circle Unsecured Business Loan

Funding Circle fast, affordable finance to help your business

  • Unsecured loans up to £250,000
  • Rates from 1.9% per year
  • Get a decision in as little as 5 hours
  • No fees for full early repayment

Key features of Funding Circle business loan

The company’s business loans provide quick cash to help your business grow, with manageable finance plans. You can receive funding for a very large unsecured loan with fixed monthly payments. On average, Funding Circle approves a loan every five minutes.

Loan typeFixed rate unsecured peer-to-peer loan
Loan amounts£10,000 to £250,000
Loan terms6 months to 5 years
Loan rate typeFixed
Funding speedOnce your loan has been granted, Funding Circle states that the funds will reach your account in a few days.
Personal guaranteeA personal guarantee is required
Multiple loans allowed at the same time
Arrangement fee
Early repayment fee
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Funding Circle secured loans

If you need to borrow more, Funding Circle also offers secured loans of up to £1 million. Funding Circle states that typically you can secure your loan against all assets of the business incl. property and large assets. Personal guarantee may also be required.

Am I eligible for a Funding Circle business loan?

If you’re certain you can meet your monthly payments, and you meet the following criteria, then you should be eligible for a loan with Funding Circle.

  • You have been trading as a business for at least two years and have not been dormant at any time.
  • You are in business to make money. Public bodies, charitable organisations and trusts are not eligible unless Funding Circle has made an official exception in writing.
  • Your firm is a sole trader, partnership, limited liability partnership or a limited company. It also must be registered at Companies House if it applies to your business.
  • At least 50% of the people who run your business are permanent residents of the UK.
  • Your business has a valid UK bank account.
  • Your business’s premises are in the UK.
  • Your company has a good and clean credit history.
  • Neither you nor any of the your company’s directors, shareholders or members has had an individual voluntary arrangement at any time within the last six years.
  • You are a legal resident of the UK.
  • You are aged over 18 and also a director of your company.
  • You have authority (signatory) over your company’s bank account.
  • You haven’t been declared bankrupt in the last six years.
  • You haven’t had any court judgements or decrees within the past three years.
  • You haven’t been a disqualified director or a director of a failed business at any time within the last six years.
  • You can provide all the information that Funding Circle requests of you.
  • You have a good and clean credit history.

Looking for alternative lenders to Funding Circle?

How does the application process work?

  1. First off, you’ll be prompted to check your eligibility and see your personalised rate. This is a really quick part of the process, taking less than a minute, and it doesn’t require masses of info. It also won’t have any effect on your credit score.
  2. If you’re happy with the rate that Funding Circle says you’d likely be offered, then you can go ahead and apply online. This bit takes 10-15 minutes.
  3. You then usually get a decision on your application within 24 hours. At this point you’ll usually be required to provide a personal guarantee and you’ll need to electronically accept the loan offer. You’ll also be prompted to provide details of your nominated business bank account for the loan to be issued to and you’ll set up a direct debit for repayments.
  4. Now, your loan can be listed on Funding Circle’s marketplace where investors can come forward to fund part or all of your loan. Finding funding for the whole lot could take up to two weeks, but Funding Circle states that most loans find investor funding within a couple of days.
  5. Once funding has been found, you’ll get a notification email and Funding Circle will pay the loan into your designated business bank account the same working day. If your loan becomes fully funded after 3pm, however, it’ll be the next working day.

How long does it take to get a loan?

From start to finish, the process can take as little as three days.

Realistically, peer to peer loans can take a little longer to fund, but Funding Circle’s huge popularity means that it has a large pool of investors to fund loans. Factors that can affect the turnaround time include:

  • When you apply (within working hours will help).
  • How straightforward your application is (including whether any additional supporting information is required).
  • How attractive your loan appears to investors (based on factors like the nature of your business, the size and duration of the loan, your credit profile etc.).
  • The volume of ready and willing investors.
  • How quickly you respond to any communications from Funding Circle.

Is Funding Circle safe?

Funding Circle is regulated by the Financial Conduct Authority (registration number 722513) and as such is obligated to have a back-up servicing arrangement in place in case of a company ceasing to trade. Funding Circle is also a member of CIFAS – the UK’s leading fraud prevention service. However, Funding Circle is not covered by the Financial Services Compensation Scheme.

What is Validis?

It’s a third party service that business lenders can use, with your permission, to gain read-only visibility of your accounts. If you’ve heard of “open banking” (which lets you grant authorised third parties access to your bank account’s transaction history), this is like “open accounting”. Lenders use this primarily to help make lending decisions.

Frequently asked questions

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