Many or all of the companies featured provide compensation to LendEDU. These commissions are how we maintain our free service for consumers. Compensation, along with hours of in-depth editorial research, determines where & how companies appear on our site.
What we like:
No minimum revenue requirement
|Fixed APR||4.99% – 22.99%|
|Loan Amounts||$25,000 – $500,000|
|Term Lengths||6 – 60 months|
|Origination Fee||0.99% – 6.99%|
Funding Circle is an online marketplace that provides peer-to-peer loans to small businesses. It connects business owners looking to borrow between $25,000 and $500,000 with investors who are willing to fund loans.
They provide loans with term lengths from six months to five years and fixed interest rates that range from 4.99% to 22.99%. Funding Circle’s rates are relatively reasonable compared to some online business lenders who have interest rates that can go up to 99%.
Another benefit of Funding Circle is that you can get your loan relatively quickly—in as little as 10 days. Lenders like Funding Circle might allow your business to get funding faster than you would be able to get with SBA loans or other small business loans.
In this review:
- Rates, Terms, Fees, & Limits
- Application Process
- Eligibility Requirements
- Funding Circle Pros
- Funding Circle Cons
Rates, Terms, Fees, & Limits
- Loan amounts between $25,000 and $500,000
- Fixed interest rates between 4.99% and 22.99%
- Lowest rates are offered on their shortest loans
- Loan terms of 6 months, 1 year, 2 years, 3, years, 4 years, 5 years
- An origination fee between 3.49% and 6.99%
- No prepayment fees
- A 5% missed payment fee
- Requires a personal guarantee and lien on business assets
1) See if You Prequalify
First, you have to complete an online application to prequalify you for a loan. This should only take around 10 minutes.
2) Fill Out the Full Application
After that, you will hear from a personal loan specialist within 1 hour to answer your questions and get the documentation that’s required for a full application. That documentation includes things like the last two years of your business tax returns, your last personal tax return, six months of bank statements, as well as any information about existing business debts.
3) Funding Circle Decides if You are Eligible
Finally, Funding Circle reviews your creditworthiness with a hard credit check. You will be told their decision within as little as 24 hours. Once a decision has been made, it will take from five to 10 days to get your funds.
If you don’t qualify for Funding Circle because of bad credit, you can check out these bad credit business loan options.
Funding Circle was created to help businesses of all sizes expand and grow, and they serve many different industries.
They have funded businesses in 28 sectors, but the top 10 sectors they fund include professional, scientific, and technical services; retail, construction, health care and social assistance; accommodation and food services; administrative support; wholesale trade; real estate and rentals; and transportation and warehousing.
They do not lend to certain kinds of businesses like non-profits, weapons manufacturers, gambling businesses, and marijuana dispensaries.
The average funded business is 11 years old, has 12 employees, and annual sales of around $1,430,000.
While they lend in all states except Nevada, they have given out a large proportion of their loans in states like California, New York, Florida, and Texas.
Funding Circle Benefits
Quick & Easy Application Process
Funding Circle allows you to quickly apply for a loan and get help with your application from a real person over the phone. Then Funding Circle reviews your application within 24 hours and gets back to you about whether you’ve been approved.
This quick application turnaround ensures that you don’t lose time waiting for a response, unsure whether you’ll get the funding you need.
Once you’re approved, you can then get funding in as quickly as 5 days. The decision making and disbursement is much faster than many banks and credit unions who can take weeks to get back to you to let you know if you’re approved.
Lower Rates Than Some Other Lenders
Another benefit of Funding Circle is that they have lower rates than some other online lenders. While the costs of a loan with Funding Circle can still be expensive if you don’t qualify for their lowest interest rates, it is much lower than other popular online lenders whose rates can start much higher than Funding Circle’s maximum rate.
>> Read More: LendingClub vs. Funding Circle for Small Business Loans
No Minimum Revenue Requirement
A key benefit for your business might also be the fact that they don’t have minimum annual revenue requirements in order to qualify for a loan. While they do tend to lend to businesses that have been around for longer than their two-year minimum, it’s not explicitly required.
No Prepayment Penalty
Finally, the last benefit of borrowing from Funding Circle is that the lender allows you to repay your loan early without a prepayment penalty.
Some online lenders disincentivize early repayment by tacking on a penalty fee or by creating complex repayment structures that don’t allow you to save money if you repay your loan early. With Funding Circle, that’s not the case. You can save money on interest if you can repay the cash you borrowed early.
Downsides of Funding Circle
Despite all the great benefits of borrowing from Funding Circle, there are still some problems.
Some Businesses May Not Meet Eligibility Requirements
Funding Circle requires that you be in business for at least two years before you can apply for a loan, which means that it’s not designed for businesses that are just starting out.
They also are more likely to lend to businesses that are more established and have more employees. This means that not every business is likely to qualify for a Funding Circle loan.
Other Lenders Disburse Loans More Quickly
While Funding Circle provides you with quick loans relative to banks and some online lenders, there are online lenders that can get you the money within 24 to 48 hours. If you need money fast, then Funding Circle might not be the right choice for you.
Lower Rates Available
Finally, while Funding Circle has lower rates than many online lenders, you will likely get a lower rate if you get a term loan from a bank or an SBA loan. While these loans can take longer to be funded, you might save a significant amount of interest over the life of the loan.
If you’re interested in reading customer Funding Circle reviews, you can look at the 18 reviews and 4 complaints registered with the Better Business Bureau. Reviews range from people who are very happy with their lending experience to those who are upset about the service they received.
Funding Circle is a great choice for medium-sized small businesses to access money quickly at a relatively low interest rate. They offer a lower interest rate than many online lenders—though you might be better off getting an SBA loan from a bank if you’re able to qualify for a Funding Circle loan.4.09 Funding Circle Small Business Loan
Author: Amanda Reaume