Funding Circle Business Loans Review for 2021

Updated on December 1, 2020

Overview

Funding Circle is a peer-to-peer lending platform that connects entrepreneurs in need of small business loans with a network of individual and institutional investors who are able to fund those loans.

Funding Circle’s medium-term loans are a great option for accessing affordable business loans online and are a faster alternative to bank loans.

That said, although these medium-term loans are Funding Circle’s main financing product, it’s worth noting that Funding Circle now also operates as an online marketplace—working with lending partners to connect small businesses to other types of financing—including SBA loans, lines of credit, and more.

Green checkmarkPros:
  • Lower rates than other alternative lenders
  • Great for established businesses who can’t qualify/need faster funding than bank or SBA loans
  • Simple, streamlined online application with dedicated account manager
  • Faster funding than bank or SBA loans (one to five days)
  • Monthly repayment schedule
  • No prepayment penalties or additional fees
  • Can be used to build and improve business credit
Red X markCons:
  • High eligibility requirements; not accessible for newer businesses or those with average credit or below
  • Slower to fund than many alternative lenders
  • Personal guarantees and business liens required
  • Large origination fee on all loans
  • Businesses that can qualify may be able to get lower rates with a bank or SBA loan if they’re willing to go through the process

Funding Circle Business Loans

As we mentioned above, Funding Circle is a peer-to-peer lending platform—meaning they use technology to connect small business borrowers searching for financing with investors. Although these medium-term loans are funded by individual and institutional investors, however, Funding Circle itself handles the underwriting, approval, funding, disbursement, and repayment processes.

With that in mind, here are the basic details regarding Funding Circle’s installment loans:

Funding Circle Medium-Term Loans

  • Loan amounts

    $25,000 to $200,000

  • Loan terms

    Six months to 36 months

  • Interest rates

    4.99% to 18.99%

Funding Circle Loan Requirements

  • Time in business

    Two years

  • Annual revenue

    No minimum

  • Credit score

    700+

Funding Circle Borrower Criteria

On top of these basic business loan requirements, here are some additional Funding Circle criteria you’ll want to keep in mind:

Restricted Industries

Funding Circle does not work with businesses in the following industries:

  • Speculative real estate
  • Nonprofit organizations 
  • Weapons manufacturers 
  • Gambling
  • Marijunana dispensaries
  • Poronography

Financial and Business History

  • Funding Circle requires that you cannot have any personal bankruptcies within the last seven years (or any business owner guaranteeing the loan).
  • Funding Circle will not let you use the loan proceeds to pay business taxes or refinance existing debt.

Location

  • Funding Circle cannot fund businesses located in Nevada.

What You Need to Apply

  • Basic business information including business tax ID number
  • Names of shareholders or owners with 20%+ ownership
  • Social security number of business owner(s)
  • Driver’s license number and state of issue
  • 12 months of business bank statements
  • Two most recent years of business tax returns
  • Two most recent years of personal tax returns for every business owner with 20%+ ownership
  • Existing business debt information (if applicable)
  • Guarantee form for all owners with 20%+ ownership

How to Get a Loan With Funding Circle

If you’re interested in borrowing from Funding Circle, your first step will be to submit an online application. 

According to the Funding Circle website, their simple business loan application can be completed in just six minutes and—overall, you can receive a decision in as little as 24 hours—with funding as soon as the next day after accepting an offer.

Let’s break down the process:

Application and Underwriting Process

As we mentioned, the first step in the loan process is submitting an application on Funding Circle’s website. This application asks for basic information about your business, its owners, and what kind of financing you’re looking for.

The application also asks if you’d like Funding Circle to consider your information for their lending partners as well. That said, Funding Circle does not charge an application fee and there is no obligation when filling out this loan application.

Once you complete this initial step, Funding Circle will do a soft credit pull to verify your credit history (a hard credit pull will be performed for partners in a general partnership).

Next, a member of Funding Circle’s credit team, called your personal account manager, will reach out to you to get more information (within one hour, according to the Funding Circle website), learn about your business, and help you decide which loan terms best suit your needs.

Then, once you’ve identified the terms you think are right for your business, your account manager will help you gather and collect any documentation required in order to submit a complete application to the Funding Circle underwriting team.

As you might expect, the faster you provide the required documentation, the faster the process will move along—again, as we mentioned earlier, you may be able to get a decision in as little as 24 hours after your documents are received.

Funding Process

Hopefully, you’ll receive a final loan offer from Funding Circle. With this offer, you’ll receive the details about your installment loan—including the amount, terms, interest rates, and any applicable fees.

Before agreeing to any offer, you’ll want to make sure that you’ve thoroughly reviewed the agreement and understand all the terms and conditions. In particular, you’ll want to be on the lookout for:

  • Origination fees: Funding Circle charges an origination fee of 5.99% of the approved loan amount for their installment loans.
  • Prepayment penalties: Luckily, Funding Circle does not charge a prepayment penalty for their medium-term loans—you can prepay your loan early and only pay interest for the time you borrow. 
  • Repayment schedule: Funding Circle’s loans are repaid on a monthly basis, with a fixed payment amount. 
  • Collateral: Funding Circle does not provide unsecured business loans. They require a personal guarantee from any business owner with 20% or more ownership of the business. They’ll also require a lien on certain business assets including equipment, vehicles, accounts receivable, and inventory. They won’t take out a lien on real estate. 
  • Additional fees: Funding Circle doesn’t charge processing fees, administrative fees, or annual fees. The only time you’ll see additional fees will be for late payments (5% of the payment amount if the monthly payment is more than 10 days late).

If you decide to accept your offer, you’ll be able to access your funds in as little as one business day. Funding Circle will be able to transfer your funds directly to your business bank account. 

Overall, most customers get their loans within five days.

Repayment Process

Once they’ve funded your application, Funding Circle will start debiting funds one month after you receive the funds. As we mentioned above, Funding Circle will also file a blanket UCC lien on certain business assets at this stage if you receive funding from them.

Funding Circle will set up automatic payments from your business bank account to ensure you don’t miss payments. If, however, automatic payments don’t work for your business, you’ll be able to make payments by check or by wire if you’d prefer. Funding Circle will deduct the same fixed payment every month until you repay your loan in full.

That said, Funding Circle’s installment loans are fully amortizing, which means you’ll pay more interest in the beginning than in the end. Therefore, as your loan principal declines, so will the amount of interest that you have to pay—and since there is no prepayment penalty, you can save on interest by paying early.

With that in mind, you’ll be able to use your online Funding Circle account to monitor your payment history and current loan balance. Funding Circle will also send paper statements to your business address every month.

Although you cannot currently make payments through the online dashboard, you can always reach out to the Funding Circle customer service team if you have questions about your repayment progress, loan balance, or payment history.

It’s important to note that Funding Circle does not report to the personal credit bureaus—but does report both on-time and late payments to two of the business credit bureaus (Experian and Dun & Bradstreet). Therefore, you can use your Funding Circle loan to build and improve your business credit history.

Finally, once you’ve made six on-time payments on your Funding Circle installment loan, you may be eligible to apply for additional funds or refinancing. You can reach out to your Funding Circle account manager or customer service representative for more information.

Funding Circle Customer Service

Funding Circle customer service is available by phone and email. You can call 855-385-5356 to talk to a Funding Circle customer support representative, as well as receive assistance with a loan application. In addition, you can email customer support at support@fundingcircle.com.

If you already have a Funding Circle loan, you can call 866-679-7966 or email loanquestions@fundingcircle.com to reach a dedicated customer service representative. 

Additionally, if you’re having trouble logging into your online account or need to reset your password, Funding Circle provides instructions you can follow on their FAQ page here.

Overall, Funding Circle customer service is available Monday through Friday from 9:00 a.m. to 6:00 p.m.

Funding Circle Customer Reviews

What do borrowers say about their experience with Funding Circle?

On the whole, Funding Circle is pretty positively reviewed across consumer review sites. To start, Funding Circle is a BBB-accredited business with an A+ rating on the Better Business Bureau site. 

Funding Circle has an average rating of 3.89 out of 5 stars (total of 44 reviews) on the BBB site and although they have 16 closed complaints in the last 12 months—it seems that these complaints are all related to their participation in the PPP loan process as a result of the COVID-19 pandemic.

With that in mind, Funding Circle has an impressive average rating of 4.5 out of 5 stars on Trustpilot across over 9,000 reviews.

Overall, here’s what Funding Circle reviews tend to focus on:

Positive Customer Reviews

  • Straightforward, fast, and easy application process
  • Helpful customer service and account management teams
  • Affordable rates

Negative Customer Reviews

  • Difference between advertised or prequalified rate versus what the borrower ended up actually paying
  • Problems with pausing payments, reaching customer service, general repayment process during COVID-19 pandemic
  • Investors complaining about not getting their money back

Ultimately, despite the problems Funding Circle seemed to have as a result of the COVID-19 pandemic, they still respond to many of their customer reviews across the internet and generally have maintained a positive reputation among small business borrowers.

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Randa Kriss
Senior Staff Writer at Fundera

Randa Kriss

Randa Kriss is a senior staff writer at Fundera.

At Fundera, Randa specializes in reviewing small business products, software, and services. Randa has written hundreds of reviews across a wide swath of business topics including ecommerce, merchant services, accounting, credit cards, bank accounts, loan products, and payroll and human resources solutions. 

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