$20,000 - $500,000
6 months - 5 years
12% - 36%
Min. Credit Score
Last Updated: June 8, 2021
$20,000 - $500,000
6 months - 5 years
12% - 36%
Min. Credit Score
Few additional fees
1-5 business days
Years in Business
At least 9 months
$500,000 per year
49 states + DC
Looking for a legitimate place to borrow money from for your small business? Tired of outrageous interest rate quotes from peer-to-peer lending sites? Need an alternative that rewards you for managing your business affairs well with favorable borrowing terms?
Then Funding Circle USA might be the right option for you. Continuing our series of reviews of the best available lenders, today we’ll look at the Funding Circle process.
What Is Funding Circle?
Funding Circle is a global online small business lending company. Founded in the United Kingdom, the company now operates in the United States, Germany, and The Netherlands. The Fund Circle philosophy is simple — they use robust scoring criteria to evaluate potential loan applicants.
They don’t have a broad loan range, and that allows them to concentrate on delivering the best possible service.
The founder, Samir Desai, saw the need for a simple alternative to traditional financing. There were marketplace platforms sourcing multiple loan offers from an extensive network of lenders. The downside with these platforms was that the lenders could charge whatever they liked. Businesses could access financing reasonably quickly, but they paid for the privilege.
For businesses with a good rating, that wasn’t the best way to borrow money. Funding Circle wanted to leverage the benefits of having a large pool of lenders like the top loan connection companies.
They streamlined the process by means of innovation to deliver technology-powered financial services. With the standard peer-to-peer lending model, there’s little control over the offers borrowers receive. Some lenders on those platforms charge a fortune.
To make things a bit more ethical, Funding Circle works slightly differently. They partner with large authorized lenders but also allow people to invest in the lending pool. The money in the pool is then lent out to credit-worthy businesses. Instead of funding a specific loan, the lenders fund the pool. Funding Circle does all the legwork and assesses your creditworthiness.
They’ll then offer you a personalized interest rate and your financing options.
Who Is Funding Circle US Best For?
Funding Circle is not for startups or for those seeking a bad credit loan given the stringent qualifying criteria. You must have a personal credit score of 660 or better. The company is best for established businesses with steady cash flow.
Loan financing may be used for:
- Business upgrades
- Equipment financing
- Cover costs for stock, employees, supplies
- Debt consolidation
- Business expansion
- Economic injury disaster loan
The company doesn’t provide unsecured loans, so you or the business must provide collateral.
Getting Started with Funding Circle
Head over to the website and click on the “Get a Business Loan” tab. Then click on the “Start My Application” tab. You’ll enter the details like loan amount term, the majority owner’s full names, and the business’s legal name.
This is a prequalification, and there’s no check on your personal credit. If your business qualifies, the company assigns you an account manager who will contact you to discuss your needs.
They’ll get more details about your business, explain how the process works, and further information, like whether your business has an active checking account.
You’ll need to provide the following documentation:
- Business tax returns for the last three years
- The Profit & Loss Statement and Balance Sheet for the previous financial year
- Your year-to-date balance sheet
- A personal financial statement
- The personal information statement
- A document authorizing the company to check your personal credit score
When the company has all the information, they’ll come back to you with your options. You can then view loan offers and decide whether you’ll accept them or not. You can choose to drop the application at this point if you prefer.
SBA-Backed Paycheck Protection Program Loans
Funding Circle is authorized to provide SBA-backed loans ranging from $10,000 to $2,000,000.
These loans are partially subsidized by government funding, so the interest rate is just 1%. They also qualify for 100% forgiveness, and there’s no need to provide collateral or personal guarantees.
The loan must be used to pay essential expenses such as utilizes, payroll, rent, or mortgage, and the amount will be a maximum of 250% of your average payroll. The amount takes into account the average monthly payroll cost to the company and includes retirement benefits, tips, taxes, and health plans.
The standard Funding Circle lending criteria are relaxed here thanks to the SBA support. Naturally, thanks to the favorable terms, qualifying for the loan is difficult.
- Have opened and operated before the 15th February 2020
- Employ 500 people or less (this is waived for some industries)
Terms & Requirements
The Funding Circle business loans are straightforward. They’re simple installment loans. Companies pay a fixed rate and low fees. The minimum loan amount is $20,000, while the Funding Circle maximum loan can go to $5 million.
If a company needs a smaller amount, Funding Circle advises them to look at a microloan with other providers instead.
Loans are repaid over a term of three to ten years. You may repay the money early without incurring any penalties.
The Funding Circle requirements are strict. The minimum qualifications to apply are:
- To be in business for three years or more
- No federal tax liens against the business
- The minimum annual revenue requirement is at least $500,000
- More assets than liabilities
- The guarantor must have a personal credit rating of 660 – 680
- The business must have collateral
The company lends to business owners in a variety of industries. They don’t cater to the following sectors:
- Weapons manufacturers
- Speculative real estate
- Marijuana dispensaries
You may renew the standard loans, and you may apply for new loans while you’re repaying a conventional loan. If you’re repaying an SBA-backed loan, it works differently. Speak to your account manager about the financial implications of both types of loans before choosing one.
According to the Better Business Bureau, Funding Circle is rated A+. There are very few complaints lodged with the BBB.
Trustpilot gives the company 4.5 out of 5, with eight out of 10 reviews being positive.
Overall, if you check Funding Circle reviews on Reddit or any other social media site, you’ll find them to be positive.
The Funding Circle borrower reviews are mostly positive. The primary complaint is that the lending experience is slow. Still, most borrowers are willing to make the tradeoff. Businesses applying here are typically not looking for fast money, so they’re more patient.
If you look at older comments, you’ll see some complaints about the estimated annual percentage rate being high. These tapered off entirely in Funding Circle reviews for 2020, so the company takes user comments seriously.
Funding Circle investor reviews, however, are less favorable. Many investors complain that their returns weren’t as expected. Some said that the bad debt wiped out potential gains and questioned the company’s collection practices.
It’s understandable to be upset, but that’s the downside of this kind of investment. There are no guarantees. Making things worse, the implications of non-payment seem less severe to borrowers than would be the case with a bank. That’s not true, naturally, but the perception is still there.
Funding Circle Features
In this part of our Funding Circle review, we’ll discuss some of the lender’s main features.
Rates & Fees
The company’s fees are straightforward. You pay:
- A once-off origination fee of between 3.49% and 6.99% deducted from the money borrowed
- If you’re getting an SBA-backed loan, there’s a guarantee fee of between 1.7% and 2.25%
- No pre-payment penalties
- Late payment fee of 5% of the payment skipped
- Funding Circle interest rates depend on your risk profile
Privacy & Security
The company takes data security seriously. They are fully compliant with data security regulations, use 256-bit encryption and firewalls to protect sensitive data, and conduct regular penetration tests to check for system weaknesses. The platform further has strict employee protocols in place to guard security.
Funding Circle’s customer service is outstanding. As a borrower, you’re assigned a dedicated account manager who will guide you through every step from loan approval to the final payment. They’ll assist you with general queries too.
You can call the Funding Circle contact number to follow up on applications or for more information about investment opportunities.
The company has offices in San Francisco and Denver. You may also reach out on Twitter, Facebook, YouTube, or LinkedIn.
If you have queries about Funding Circle loans, you can email the company for more details.
The company doesn’t have a contact form on their website or an instant chat option. Instant chat isn’t essential because the initial application process is easy. The site has a comprehensive FAQ section, so you can easily find the answers you need. Still, an instant chat option would make things simpler.
Funding Circle Alternatives
In this section, we’ll compare and contrast Fundera Circle competitors.
Funding Circle vs Fundera
Fundera is one of the best personal loan companies and an alternative lending option for those wanting access to unsecured loans for bad credit. The company also partners with a network of lenders, so you’ll get many offers. The minimum FICO score is 550, so qualifying for a loan on Fundera is a little easier.
Funding Circle vs Lendio
Lendio doesn’t offer personal loans either, but they do offer a far more extensive range of business financing. Businesses needing fast funding can access merchant cash advances or business lines of credits. The company also provides startup loans and commercial property finance.
To finalize our Funding Circle review, we’ll say what we liked and didn’t like about it.
Funding Circle has a solid business model and has proven responsive to client concerns. They could streamline their application process, but their great service makes up for the delay. Compared to a traditional bank application, they’re fast.
They’re thorough and have strict lending criteria. Overall, they’re ethical lenders that won’t engage in reckless lending. It’s not as easy to qualify for a loan, and that’s a good thing. Too many lenders today extend credit too easily. Easy access to working capital might help in the short-term, but racking up too much debt harms the business in the long-term.
- Safer than other peer-to-peer platforms
- High borrowing limits
- Fixed monthly repayments
- No penalties for early payment
- SBA-backed PPP loan options
- Few additional fees
- Customer service is helpful
- Faster than some of the best banks for small business loans
- A+ rating with the Better Business Bureau
- Strict Loan eligibility requirements
- Investors cite Funding Circle problems with bad debt
- Doesn’t cover all US States
- Several industries excluded
- No business lines of credit or credit cards
- No personal loan services
What is Funding Circle USA?
Funding Circle USA is a peer-to-peer lender with strict loan requirements. They cater specifically for small to medium businesses in the United States and offer loans of between $20,000 and $5,000 000.
How does a Funding Circle loan work?
They only offer installment loans with clear Funding Circle loan terms. The installments are fixed when you take the loan out, and there are no penalties for settling early. They don't advertise the average estimated annual percentage rate of the loan upfront, as this is determined on a case-by-case basis. However, the interest rates start at 1.9% for borrowers in the United States.
Does Funding Circle check credit?
Yes, they check your business and personal reports. The business inquiry won’t appear, but the personal one will. As it’s a soft check, it won’t impact your score much. As any lending platform review will tell you, there’s no reputable site that doesn’t require a credit check. Note that you can't get a loan if you have bad credit — the minimum FICO is 660.
Who is behind Funding Circle?
Funding Circle is part of the Funding Circle Holdings PLC group. It’s a public company, listed on the London Stock Exchange. The founder, Samir Desai, acts as the company’s CEO. The board consists of Funding Circle executives in the United States, the United Kingdom, and Europe. The Funding Circle stock is publicly traded under the ticker symbol FCH.
Can you have more than one loan?
You’re not allowed to have more than one SBA-backed loan at a time. You may also not apply for a standard loan if you’re still repaying an SBA-backed loan. Conventional loans are more flexible. If you qualify based on the company’s credit scoring model, you may apply for another loan. You’ll be able to do so by contacting your account manager or through the dashboard on the Funding Circle login to your account and follow the steps onscreen.
Is Funding Circle good?
It’s a good option thanks to the outstanding service and lower costs of financing. For additional details, check our analysis of the service and other Funding Circle reviews to help you make an informed decision.