Funding Circle Business Loan Review
Best For: Established Businesses
At some point in a business’ time of operation, an owner will likely need to take out some form of financing to fund expenses that can’t be paid for out of pocket. If your business has been in operation for over two years and you need cash to fund a new equipment purchase, building repairs, or simply fill the gap in some of your recurring expenses, Funding Circle may be a good place to start.
This peer-to-peer lender connects borrowers with investors who are interested in acting as lenders. Additionally, Funding Circle’s loans typically fund within 10 business days, so it might be worth considering this lender if you don’t want to wait the two to three months that might be required by a traditional bank or SBA lender.
Funding Circle Business Loan Rates & Terms
|Loan Amount:||$25,000 – $500,000|
|APR Range:||4.99% – 26.99%%|
|Time To Fund:||10 days on average|
|Loan Terms:||One to five years|
|How To Qualify:||660+ Personal Credit Score|
No Minimum Annual Revenue
|Great Option For:||Established Businesses, Not Sole Proprietors|
|Click “Check Rates” to apply to Funding Circle|
- APR range: Funding Circle connects businesses with loans with annual percentage rates ranging between 10.91% and 35.5%.
- Available loan terms: Loan terms with Funding Circle can be as short as a year and as long as five years.
- Loan amounts: This company’s loans range start at $25,000, with a maximum amount of $500,000.
- Time to fund: A business loan from Funding Circle can fund in as little as 10 business days.
- Origination fee: Funding Circle’s origination fees range between 0.99% and 6.99%.
- Credit needed: Funding Circle has slightly more stringent minimum financial qualifications than some of its competitors, with a credit score requirement of at least 620. However, having a score above 700 will substantially increase your chances of being approved or offered a lower rate.
- Income needed: Your business should have an annual revenue of at least $2 million, as well as ten employees or more.
- Soft Credit Check?: After you’re pre-approved for a loan and a Funding Circle representative has spoken with you over the telephone, the company will do a hard check on your credit, which can also affect your score.
- Best for: Funding Circle’s loans are ideal for established businesses, with several employees and at least two years of operation. This lender’s product can be helpful to business owners who are looking to fund a property expansion, large-scale repairs or purchase new equipment.
What Is Funding Circle?
Funding Circle is a peer-to-peer business lender, offering loans between $25,000 and $500,000 to businesses with established financial histories and several employees.
How Does Funding Circle Work?
Funding Circle works by connecting businesses with investors who are interested in functioning as lenders.
After completing an online application, pre-approved applicants will be able to take a look at their offers, and will receive a telephone call from a Funding Circle representative. After discussing the different lending options and gathering all necessary paperwork, the company will do a hard pull on the applicant’s credit and make a final decision.
Benefits of Funding Circle
- Less time to fund than SBA or traditional bank loans, in as little as 10 days
- Works with a wide variety of business lenders and investors
- Relatively low rates compared with online lenders, with APRs starting at 10.1%
- Low origination fees, starting at 0.99%
- No prepayment penalty
Drawbacks of Funding Circle
- Stringent requirements, with a minimum credit score of 620 to qualify and a requirement of at least two years in business
- Slower to fund than other online banks and lending platforms, with a 10-day time to disbursement. Other lenders may be able to make funds available within as little as one business day.
- Long application process
How To Apply for a Funding Circle Business Loan
To be considered for financing from a Funding Circle lender, you’ll start by completing an online pre-qualification application, in which the platform will do a soft pull on your credit.
If you’re pre-qualified, you’ll be able to see various offers and rates, and an agent will contact you to discuss your options.
The next step is to provide any additional documentation that you might need and prepare for a hard credit check for the final step of the application. Afterwards, Funding Circle will spend a few business days evaluating your documents and will send you a final offer. You should be prepared for an application process that lasts around 10 business days.
What You Need To Apply:
Before applying, you’ll need to have a few things handy.
- One year of personal tax return history
- Six months of your most recent bank statements
- Any information related to your business’ debt
- Two most recent years of business tax returns
- Your personal credit score
- Contact information
Is Funding Circle Legit?
Funding Circle has an A+ rating with the Better Business Bureau (BBB) and just four formal complaints, primarily from investors and not borrowers.
The platform offers a relatively transparent and straightforward application process, as well as both phone and email customer support. When you’re shopping for the business loan that’s right for you, it’s a good sign to find lenders or networks that can connect you with a real person.
How Does Funding Circle Fund Their Loans?
Funding Circle funds their loans by finding investors who are interested in lending to small businesses. When you apply for a Funding Circle loan, you’re not just applying to the platform, but also to the fixed set of standards and requirements that the investors have in place in order to consider a borrower.
How Does Funding Circle Compare? Vs LendingClub Business Loans
While it may be possible to obtain funding with lower rates with Funding Circle, a platform like LendingClub might be a better option to consider if your business is relatively small or does not have an established financial history. This platform connects businesses with lenders who offer loans of up to $300,000 and repayment terms of up to five years.
Unlike Funding Circle, LendingClub’s minimum annual revenue requirement is just $75,000, so this platform may be more accommodating to smaller operations. If you’re considering applying for a LendingClub loan, you should also keep in mind that this platform requires borrowers to own at least 20% of the business that they’re applying for a loan for.
Compare All Business Loans
If you’re weighing your business financing options and want more information, PrimeRates offers comprehensive reviews of several other business loan types, lenders and platforms. Even if you have a low credit score or own a brand new business, you still may be able to find a loan with low rates and flexible repayment terms. It’s important to take the time to understand all of your financing options before deciding on the loan that’s right for you.