Funding Circle Small Business Loans Review

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Funding Circle is a commercial lender that works by connecting small business owners with investors lending money. In this in-depth review, we’ll cover what it takes to land a Funding Circle small business loan and help you determine whether Funding Circle is the right lending source for you.

Logo for Funding Circle

Loan Amounts

$25,000 to $5 million

APR Range

Start at 7.9% for highly-qualified borrowers

Term Length

Up to 25 years

Funding Circle pairs businesses that have been in business for at least two years with individual investors for term loans, lines of credit, and SBA loans. Eligible business must have at least fair credit, with a minimum accepted credit score of 660.

  • Competitive rates for highly qualified borrowers
  • Funding in as little as two business days
  • Costly origination fees
  • Businesses must be in operation for a minimum of two years
  • Requires a lien on business
  • Minimum credit score may be higher than some competitors

Full Funding Circle small business loans review

This business loan is a good fit for: Businesses with strong credit and two or more years in operation.

Top perks

Competitive rates: Although only the most highly qualified borrowers will qualify for an interest rate as low as 7.9%, that’s still competitive, especially in today’s market. Paying lower interest rates leaves business owners with more money to spend on growing their operations.

Fast funding: How quickly a business will receive its loan depends on several factors, including how simple its loan application is and the type of loan it seeks. However, some businesses receive funds in as little as two days, which can help when an immediate financial need requires attention.

What could be improved

Expensive origination fees: It’s impossible to overlook how much origination fees can cost the average borrower. With fees ranging from 4.49% to 10.49%, that means borrowing $100,000 will cost the business between $4,490 and $10,490.

Businesses must be in operation for two years: The requirement that a business must be in business for two years means that startups and newer businesses are unable to land a loan when they may need it most. While it’s understandable that lenders may not want to take the risk, it’s still a drawback for new entrepreneurs.

Types of business loans offered by Funding Circle

Funding Circle focuses on connecting small business with investors for three specific types of business loans:

  • Term loans: Deposited into a business bank account via a lump sum from a lender and paid off in fixed installments. Repayment periods vary from six months to seven years. Typically secured by a lien on business assets and may require a personal guarantee. The interest rate may be fixed or variable and depends on creditworthiness and the loan term selected.
  • Line of credit: A flexible form of short-term financing that gives borrowers access to a set amount of credit when needed. Payments are not due until the funds are drawn. Business owners may be eligible for up to $250,000. Fees associated with a line of credit can include a monthly maintenance fee, draw fees, and late payment fees.
  • SBA loans: As an official Small Business Administration (SBA) lending partner, Funding Circle helps small business owners apply for SBA 7(a) loans up to $5 million, depending on the loan subtype. The SBA typically requires a personal guarantee from all parties with a 20% or higher stake in the business.

How to qualify for a Funding Circle loan

To be eligible for a Funding Circle loan, a business must:

  • Be in business for two or more years
  • Earn $50,000 or more in annual revenue
  • Possess a strong personal and business credit score of at least 660
  • Have no bankruptcies in the last seven years

Application process and required documentation

Funding Circle’s streamlined application process is easy to follow. It consists of the following steps:

  1. Fill out an online application
  2. Upload required documents
  3. Speak with a dedicated account manager
  4. Wait for approval
  5. Once approval is granted, expect funding within as little as 48 hours

Business owners may enjoy a smoother application process by having the following documents ready:

  • Minimum of two years worth of business tax returns
  • One year of personal tax return
  • Last six months of business bank statements
  • List of current business debts
  • Guarantor form
  • Additional documentation, as requested by underwriting

This Funding Circle small business loan is right for you if:

Funding Circle may be a good fit for a business that:

  • Has been in operation for two or more years
  • Has a minimum annual revenue of $50,000
  • Has a credit score of 660 or higher
  • Does not carry too much additional debt

FAQs

  • No, not directly. Funding Circle helps match businesses with individual lenders who have money to loan.

  • The lowest rates are reserved for the most highly qualified borrowers. Borrowers with an excellent credit score and healthy business revenue have the best chance of landing a low rate.

  • There are a couple of options. You can find a lender willing to work with business owners with bankruptcy on their record, or wait two years and apply through Funding Circle.

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