Look around Main Street in your town.
You’ll likely see a barber shop, pizza place, hardware store, coffee house, and more. These are the people in your neighborhood.
They’re also typical Funding Circle borrowers.
Launched in 2010 to help small businesses access funding and succeed, Funding Circle is now one of the nation’s leading marketplace lending platforms.
In fact, the peer-to-peer lender, which raises capital through investors who wish to help finance small businesses, has loaned more than $2 billion to more than 15,000 businesses.
Its lending platform allows its business partners to borrow from a range of investors which includes 47,000 individuals, financial organizations and other entities.
Here’s how it works:
Using technology to cut out the middleman, Funding Circle connects supply directly with demand for a fraction of the cost. This creates a transparent marketplace that gives small businesses access to fast and affordable financing. It also gives investors the opportunity to invest in a new fixed income product.
So what makes the Funding Circle lending platform tick?
“Our ability to create great borrower experiences enabled by technology—while at the same time doing a really thoughtful and thorough job of credit assessment and risk analytics,” says Liz Pollock, United States head of communications.
Although small businesses have many alternative lenders to choose from, they might find that Funding Circle truly understands their challenges when it comes to raising financing.
That’s because the lender was born out of frustration with the traditional loan process. When Funding Circle’s co-founder Sam Hodges couldn’t get a small business loan for his own successful fitness centers, he knew something had to change. He wanted to provide a better financing solution for small businesses across America.
So, what sets Funding Circle apart from other alternative lenders?
The company doesn’t rely solely on computer models to make its funding decisions.
While it prides itself on technology to help access credit and risk, it also takes a holistic look at your company.
Its online application process is fast and easy—taking about 10 minutes to fill out and submit. The loan fee structure is flexible based on your business needs and history.
Better yet, Funding Circle’s fee structure is simple with no hidden charges like early repayment penalties or monitoring fees, says Pollock.
Within 2 hours after submitting your application—and often within 5 minutes—you’re paired up with a customer service account manager who will lead you through the rest of the loan process. Your account manager will explain all your loan options, walk you through the fee structure and help you find the best terms for your business needs.
You’ll typically find out whether you’ve been approved for your loan within 72 hours.
To give you a better sense of whether Funding Circle is the best lender for your small business, we’ve answered some basic questions for you and given you a breakdown of what you need to know.
If you want to learn even more, keep reading to see a step-by-step breakdown of the application process.
Funding Amounts: Term loans range from $25,000 to $500,000. Although loan sizes vary, a typical small business borrows about $130,000 for 36 months.
The Typical Loan Term: 1 to 5 years.
Minimum FICO Score: 620.
The Cost to Fund: About 6.5% at the very lowest range to about 34% at the high end (includes an interest rate ranging from 5.5% to 28%, plus a loan origination fee ranging from 1% to 6%).
Approval Time: From the time you submit your application and necessary financial documents, you will typically learn if you’ve been approved in 72 hours. You’ll usually receive funding within 10 days.
Payment Frequency: Monthly.
To apply for a loan at Funding Circle, you should meet the following criteria:
In this first step, you’ll enter in your how much money you are looking to borrow, the length of the term you’re seeking, when you need the loan, and your legal business name.
You’ll also provide your name, email address, phone number, and information about where you heard about Funding Circle.
In this next step, Funding Circle will ask you to supply the following information to determine whether you’re eligible for a loan:
This is where you’ll tell Funding Circle a bit more about your business.
You’ll answer the following questions:
You’ll also need to provide information for any additional owners of the business and any other guarantors for the loan.
Then you’ll enter in personal details like your social security number, phone number, and residential address.
You’ll also provide Funding Circle with the following financial data:
Once you’ve given Funding Circle more financial information, the lender will then ask you whether you’ve ever been convicted of a felony and if there are any legal actions pending against you.
If the answer is yes to one or both of these questions, you might still be approved for a loan.
However, an underwriter will likely discuss this with you in the underwriting phase—see the second in our three-part series.
Funding Circle will also see this information in a background check, so it’s best to disclose this legal information in your initial application.
After this, you will be asked to check a box to authorize a credit report with your electronic signature.
Now that you’ve taken the time to fill out the rest of the online application, it’s time to provide Funding Circle with the following financial documents:
You’ll then need to answer the following question: Does your business have outstanding business debt?
If the answer is yes, you’ll be prompted to complete information about any and all additional debt obligations.
This means you’ll need to provide information about other lenders, your outstanding balances and the reasons for these loans.
You’ll then be asked whether you would like to refinance these debts.
After filling out the entire form and submitting documents to Funding Circle, you can now sit back and wait for a phone call from a Funding Circle account manager. You might want to sit tight and have your phone with you, since you’ll typically get this call within minutes, says Account Manager Natalie Roberts.
“You’re assigned an account manager as soon as you hit ‘send’. We reach out as soon as possible, usually within 5 minutes,” says Roberts.
The account manager is there to help guide you through the rest of the process and answer any questions about your future loan while your application moves along to the underwriting phase.
We’ll discuss what goes on during the underwriting process in the second of our three-part series on getting a loan through Funding Circle.
Want to learn more? Read our in-depth Funding Circle review here.