Funding Circle Review: Best Business Loans 2024

If you have good credit and an established business that needs a little extra funding, Funding Circle can offer you lower rates than many competitors.

Most businesses hit rough financial patches. Whether it’s an unexpected emergency, needing to replace expensive equipment, or a slower-than-anticipated sales season, keeping your business afloat can mean seeking outside funding.

For some small business owners, though, that can be a challenge when working with traditional lenders. Some businesses don’t have a large enough revenue stream, while others just can’t wait for the traditional lending process to play out or they’ll be in trouble.

With lender matching business Funding Circle, small businesses can get faster access to the cash they need without paying exorbitant fees.

There are a lot of non-traditional lenders on the market these days, but many cater to younger businesses whose owners have less stable credit scores. As a result, those who borrow from them end up paying high interest rates and other fees.

Funding Circle, on the other hand, has slightly higher requirements for its loans, working with businesses that have been operating for at least two years and owners with credit scores of at least 620.

You’ll only find one type of lending option at Funding Circle - the term loan - but some business owners can have access to their money in just a few days after applying. This is much faster than traditional lenders, which makes Funding Circle attractive for those who have a pressing cash need right now and can’t wait on the slower process at other banks and lenders.

Funding Circle: What You Need to Know

Funding Circle operates in a similar manner to other lender matching companies: Business owners fill out one application and are presented with a variety of lending options to choose from.

However, there are a few things that set Funding Circle apart from many of the other options. Some of these differences include:

• Its minimum credit score requirement is higher. Business owners must have a credit score of at least 620 to qualify for funding.
• Funding Circle only offers term business loans. You will not find merchant cash advances, invoice financing, or other types of funding through Funding Circle.
• The rates borrowers receive on their loans are lower. This is due in part to the more stringent application requirements for Funding Circle loans, as well as the fact that they only offer term loans.
• There also is a longer application process than with many other alternative lenders and lender matching programs. However, even with a longer application process, many businesses receive their financing within a few days after they apply.

Funding Circle is a global lending network, allowing investors from all over the world to help finance small businesses in the United States, United Kingdom, Germany, and the Netherlands.

They have a network of more than 90,000 investors globally, including retail investors, banks, asset management companies, insurance companies, government-backed entities, and funds. These investors have provided more than $10.9 billion in more than 77,000 businesses since the company’s founding in 2010.

Funding Circle works with businesses in a variety of industries. However, some of the businesses Funding Circle’s partners do not lend to include:

• Speculative real estate
• Nonprofit organizations
• Weapons manufacturers
• Gambling businesses
• Marijuana dispensaries
• Pornography

Funding Circle also is not available in Nevada due to state lending regulations.

If you’ve got a business that has been in operation for at least two years, a personal credit score of at least 620, and no bankruptcies within the last seven years, you may be eligible for quick term funding at lower rates through Funding Circle.

How Does Funding Circle Work?

When you apply to be matched with a lender through Funding Circle, you fill out one application that then goes to all possible lenders. These lenders decide whether or not they want to bid on your loan, giving you competitive interest rates, fees, and other terms to choose from.

You select the lender you most want to work with, and continue the application and approval process from that point.

Funding Circle only offers term business loans to its borrowers, so you won’t be able to receive quick-fix cash options such as merchant cash advances for nearly immediate money in your pocket. However, Funding Circle tends to operate quickly, with many businesses receiving their loans a few days after they apply.

All of Funding Circle’s lending options are term loans, meaning you receive the funding up front and pay it back, plus interest, over a period of months or years.

Loans from $25,000 to $500,000 are available, with repayment terms from six months to five years. Fixed interest rates available through their lending partners start at 4.99 percent, a very competitive rate in the online lending market. You also will be required to pay a one-time origination fee on your loan.

Where Is Funding Circle Available?

Funding Circle is available in 49 states, the District of Columbia, the United Kingdom, Germany, and the Netherlands. Loans through Funding Circle are not available in Nevada due to state lending regulations.

In addition, Funding Circle does not loan to businesses in all industries. Industries that it does not loan to include:

• Speculative real estate
• Nonprofit organizations
• Weapons manufacturers
• Gambling businesses
• Marijuana dispensaries
• Pornography

How Much Does Funding Circle Cost?

Funding Circle is free to use as a borrower who wants to explore lending match options. However, if you elect to borrow through Funding Circle’s partners, you will pay an origination fee on your loan.

As far as interest rates go, Funding Circle says its term loans begin at 4.99 percent interest. This rate is competitive within the alternative lending industry, meaning you may not find too many other lenders offering as low rates as you may be quoted by Funding Circle.

Your individual interest rate will vary depending on your individual qualifications, the amount of money you borrow, and the lender you elect to work with.

What Does Funding Circle Offer?

Funding Circle only offers one type of loan: A small business term loan.

This loan is similar to a typical consumer loan. You receive a lump sum of money - between $25,000 and $500,000 when borrowing from Funding Circle - and you repay that money over a period of months or years.

This type of loan often gives you among the lowest rates, as you are required to sign a personal guaranty when you receive a loan from Funding Circle. You also will make predictable monthly payments to your lender, allowing you to budget for that expense.

Repayment terms from Funding Circle range from six months to five years, and interest rates start at 4.99 percent.

Once you receive your loan from your Funding Circle partner lender, you can use it for a variety of different business needs. Some of these options can include:

• Emergency repairs, such as from a fire or flood
• Payroll expenses
• Paying rent
• Purchasing, leasing, or upgrading business space or land
• Purchasing or leasing new or used business equipment, such as heavy machinery or vehicles
• Purchasing inventory
• Investing in new business opportunities
• Hiring new staff

Funding Circle does report payments on its term loans to two credit bureaus - Experian and Dun & Bradstreet. This can help your business build credit, which can come in handy if you need to apply for additional funding later, want to negotiate better terms with vendors, or lower your business insurance premiums.

All of Funding Circle’s loans are secured, both by the personal guaranty signed by the owners and with a lien on certain assets. Things that are accepted as collateral include equipment, vehicles, accounts receivable, and inventory. If you default on your loan payments, Funding Circle can repossess this collateral to try and make up some of what you owe.

Minimum requirements for funding through Funding Circle include:

• At least two years in business
• A minimum personal FICO score of 620 for the business owners, or 660 for sole proprietors
• No personal bankruptcies among the owners within the last seven years
• Not be located in Nevada
• Be in an industry other than speculative real estate, nonprofit organizations, weapons manufacturers, gambling businesses, marijuana dispensaries, or pornography

Funding Circle Small Business Funding Features

• Founded in 2010
• Locations in San Francisco, Denver, London, Berlin, and Amsterdam
• Global lender matching service
• Only offers term loans to small businesses
• More stringent requirements than other lenders
• Loans from $25,000 to $500,000
• Lower interest rates and fees than many other lenders
• Quick, easy application can be completed in about six minutes
• Many businesses receive funding within five days
• Fixed monthly payments
• Interest rates starting at 4.99 percent
• Available in 49 states, the District of Columbia, the United Kingdom, Germany, and the Netherlands
• Public company listed on the London Stock Exchange
• Raised money from Accel Partners, DST Global, Index Ventures, Rabbit Capital, Sands Capital Ventures, Temasek Holdings, and Union Square Ventures before its initial public offering
• Reports monthly payments to two credit bureaus to help businesses build credit
• Loans can be used for a variety of business-related expenses
• Founded by two former gym owners frustrated with not being able to secure funding following the 2008 financial crisis
• Repayment terms from six months to five years
• No prepayment fees
• One-time origination fee

Pros and Cons of Funding Circle Small Business Loans

Here are some pros and cons of working with Funding Circle for a small business loan:

Pros:

• Available in 49 states, the District of Columbia, the United Kingdom, Germany, and the Netherlands
• Public company listed on the London Stock Exchange
• Reports monthly payments to two credit bureaus to help businesses build credit
• Loans can be used for a variety of business-related expenses
• Repayment terms from six months to five years
• No prepayment fees
• One-time origination fee
• No fee to apply for funding
• Loans from $25,000 to $500,000
• Lower interest rates and fees than many other lenders
• Quick, easy application can be completed in about six minutes
• Many businesses receive funding within five days
• Fixed monthly payments
• Interest rates starting at 4.99 percent

Cons:

• No funding available below $25,000 or above $500,000
• Not good for startups
• Longer application process than many online lenders
• More stringent requirements may put it out of reach of some business owners
• Only one type of funding
• Slower payout of loans than some other lenders

Funding Circle Small Business Lending Customer Reviews

In its decade in business, Funding Circle has built a largely positive reputation for helping small business owners get access to the money they need at reasonable interest rates.

It has nearly 7,000 reviews on consumer review site Trustpilot, with an overall star rating of 4.5 out of 5.

“Very professional service with staff help and support excellent throughout. The process was very smooth and the funds where received very quickly. We would highly recommend Funding Circle to any business looking for assistance with funds.” - Pani

“I have been considering Funding Circle for some time and I only wish I had done this sooner !! They really were excellent, I applied on a Tues, by the following Tues I had the funds. My Account Manager Margaret Gemmill was great to work with. She kept me fully informed of what was happening at all stages, communications were great.

If your criteria fits, this is a superfast way to raise funds for your business. A massive thank you Funding Circle and Margaret.” - Laser Clays Entertainment Ltd.

“Originally good, I was enticed by better interest rate returns than Ratesetter, so after 4 days on the market my ratesetter funds were sold and invested into Funding Circle. The lack of liquidity with Funding Circle when trying to sell loan parts though is shockingly bad and I believe tantamount to miss-selling with their original guidance on the matter of selling loan parts. My loan parts have been on sale since July 2019, they still have not sold! If you are a small to medium investor that needs access to their money within 3 months ( a very reasonable amount of time to allow in my opinion) then avoid avoid! Plus the interest rate has dropped from 9% to 5.8% in that time. Look elsewhere!” - Richard

“Worst experience ever. Baited with a 4.99 interest rate and no affect on my credit score. My advice if you're considering using them: DON'T! I had good business and personal credit. They fed me info in bits and pieces. I was told at the last minute 15.87% and a 7%+ origination fee (of which no mention had been previously made) right off the top. Nothing they told me came through as represented. In my opinion, they were misleading at best. Told me what I wanted to hear and then didn't stick to anything they'd represented. Just awful” - Kim

How to Apply for Funding Circle

Applying for Funding Circle is quick and easy online, taking less than six minutes in most cases:

1. Visit www.fundingcircle.com.
2. Provide the requested information, including basic information about your business and personal finances.
3. A personal account manager reaches out to you within an hour to collect more information about you and your business, to collect documentation, and to find terms that meet your needs.
4. The underwriters review your application and make a decision in as little as 24 hours. You may be contacted if there are additional questions.
5. You accept a loan offer and can be funded in as little as one business day.

How to Contact Funding Circle

Address: Headquarters 85 2nd Street Suite 400 San Francisco, CA 94105 Customer Service: (855) 985-5356 Website: https://wwww.fundingcircle.com Email Support: [email protected] Facebook: https://www.facebook.com/FundingCircleUS/ Instagram: @fundingcircleus Twitter: @FundingCircleUS

Summary

Getting funding for your small business shouldn’t have to cost you an arm and a leg, and it shouldn’t take weeks for you to get a check in your hand. With lending match company Funding Circle, established small businesses whose owners have a good credit history can have between $25,000 and $500,000 in their hands in just a few days.

This money can be used for a wide variety of business expenses, whether you just need to keep things going through a slower season or you need an influx of capital to expand your operations.

Interest rates at Funding Circle are lower than many other options on the market thanks to their more stringent lending requirements. Funding Circle also offers only one loan product - a term loan - which helps keep risk and rates lower for everyone.

If you’re an established business with a good credit score, Funding Circle may be a great option for your capital needs.