Funding Circle Reviews

Funding Circle is best for established small businesses seeking longer-term loans of up to $500,000. While rates aren't disclosed, the simple application process and fast funding make it appealing for time-sensitive needs.

But Funding Circle's eligibility standards are more stringent than some peer’s. Borrowers need a personal credit score of 660 or higher, at least two years in business under their belt and no bankruptcies on record within the last seven years. This disqualifies newer or higher-risk businesses.

For small companies that meet Funding Circle's qualifications, it provides a good alternative to banks by streamlining the application and funding process. Just be aware of origination and late fees.

Funding Circle helps small businesses get funding through term loans, SBA loans and lines of credit. All of its loans require a personal guarantee, which states business owner(s) are personally responsible for repaying the loan if the business is unable to.

Overview of Funding Circle products

Funding Circle determines which rates you qualify for during the underwriting process. Factors like credit scores, business financials, revenue and repayment ability all contribute to the final rate evaluation.

For SBA-backed loans, rates start at Prime+2.75%. So if the Prime rate was 8.50%, the minimum SBA rate would be approximately 11.25%.

Although rates aren’t disclosed online, you’ll know your exact interest rate, term and monthly payment amount before accepting any loan offer.

Funding Circle doesn’t charge application fees or prepayment penalties, but there are still a few fees to watch out for.

• Origination fee: Funding Circle charges a one-time origination fee that’s added to the total loan amount. So if you were approved for a $100,000 loan with a 2% origination fee, your total financed amount would be $102,000.
• Late fees: Funding Circle charges up to 5% of the missed payment amount once your payment is over 10 days late. Your loan may default if you miss more than three payments in a row or four out of six payments, depending on your loan agreement.
• Draw fee (line of credit): Funding Circle’s line of credit has a fee of 1.6% of the draw amount.
• SBA loan fees: SBA 7(a) loans charge a guarantee fee of up to 2.25% and a broker/agent fee (paid to lender), as well as closing costs.

To apply for a loan with Funding Circle, you'll need a minimum personal credit score of 660 (650 for an SBA loan) and you must have at least two years in business and no personal bankruptcies in the last seven years. For an SBA loan, you must also have at least $150,000 in annual revenue.

Note that Funding Circle doesn’t lend to businesses in speculative real estate, nonprofits, weapons manufacturing, gambling, marijuana, pornography or other restricted industries.

If you meet the criteria, it takes around six minutes to apply for a Funding Circle loan, and you can get a decision in as little as 24 hours. Here’s the general process:

1. Go to the Funding Circle website and click "Apply Now" to begin the application process. No fees or credit checks are required at this stage.
2. Provide some basic information about your business such as legal structure, location, industry, ownership details and time in operation. Your business must be located in the U.S. and have been open for at least two years.
3. A Funding Circle account manager will then contact you within one hour to learn more about your funding needs and business.
4. You may need to submit additional documentation including two years of business tax returns, six months of bank statements and your personal tax return.
5. Funding Circle underwriters will review your complete application and make a decision within 24 hours in most cases.
6. If approved, you'll be funded as quickly as one business day.

For small business owners seeking term loans, Funding Circle offers a compelling alternative to other online lenders. But it’s not your only option.

Compared to competitors like National Funding and OnDeck, Funding Circle stands out for offering longer loan terms of up to seven years instead of two years. It also funds loans slightly faster than National Funding. But eligibility is more stringent, requiring a longer time in business and higher personal credit score.

Here’s how the three brands compare on their business term loan products:

Funding Circle is a legitimate peer-to-peer lending platform that’s been in business since 2010. Over the past decade, it says it has originated over $20 billion in loans to over 135,000 small businesses.