Funding Circle Business Loans: 2022 Review

Funding Circle is a U.K.-based, peer-to-peer lending platform that operates in the U.S., Germany and the Netherlands. It’s one of the largest online small business loan platforms in the world. Its offerings can vary, but currently Funding Circle is offering SBA 7(a) business loans, term loans and business lines of credit.

If your business is new but booming, a business line  of credit may be a good fit because it requires only six months of business history required. But, your business will need to prove it’s capable of producing at least $120,000 in revenue. Businesses that are more established may meet the two-year, time-in-business minimum requirement for less expensive term loans.

Pros Cons
  Funding Circle’s APR is competitive on business lines of credit.   Rates on term loans aren’t highly competitive.
  You can borrow more with Funding Circle than some of its competitors.   High initial revenue requirements to qualify for a business line of credit with partner lenders.
  No prepayment penalties on term loans issued directly by Funding Circle.   You may incur prepayment penalties or other unexpected fees if your term loan is issued by a Funding Circle partner.

Funding Circle overview: Amounts, rates and fees

Funding Circle and its lending partners offer three products: SBA 7(a) loans, term business loans and business lines of credit.

Funding Circle Business Financing: At a glance
Amount Terms Starting rate Fees Min. credit score
SBA 7(a) loan $25,000–$500,000 Up to 120 months Rates vary, subject to SBA maximums
  • 2% packaging fee
  • 1.7%-2.25% SBA guarantee fee
  • Closing costs
Term loan $25,000–$500,000 6 to 84 months 9.49%-22.74% interest rates on loans issued by partner lenders.

11.29%–30.12% interest rates on loans issued directly by Funding Circle.

  • Closing costs
  • 3.49% origination fee on loans issued directly by Funding Circle
  • Potential prepayment penalties depending on lender
  • 5% late payment fee
660-700 depending on lender
Business line of credit $6,000–$100,000 6 or 12 months 10.99%–50.00% APR
  • $20 monthly maintenance fee
  • 1.6%-2.5% draw fee
  • 5% late fee

SBA 7(a) loan

Funding Circle provides SBA 7(a) loans of $25,000 to $500,000. Terms can be up to 120 months, and payments are made monthly. This is a variable rate loan; right now the rate is 6.00%, but it is subject to change.

There is a 2% packaging fee, along with a 1.7%-2.25% SBA guarantee fee.

There are no prepayment penalties on these loans. It typically takes two weeks to fund an SBA 7(a) loan through Funding Circle, though most applicants usually take an additional four to eight weeks to gather paperwork, which can delay the process.

Term loan

Funding Circle issues term loans up to $500,000 directly and through partner lenders. If you are borrowing from Funding Circle directly, the APR on term loans can range from 12.01% to 36.00%. Term loans directly from Funding Circle have repayment terms of 36 months and no prepayment penalties or fees.

Funding Circle also connects borrowers with partner lenders for term business loans. Terms range from six to 60 months, and you will make payments on a monthly basis. Credit requirements vary, but most lenders will require a minimum credit score of 660 to 700.

Interest rates will vary by individual lender, but generally speaking, they’ll range from 9.49% to 22.74%. These rates are base interest rates and may be higher once closing costs and origination fees are added in. Some lenders may also charge prepayment penalties and late fees, but these aren’t included in your APR.

For comparison, when you strip down term loans issued directly by Funding Circle, the base interest rate can range from 11.29% to 30.12%, but that’s before accounting for a 3.49% origination fee. Once that fee is calculated into your monthly payment, you arrive at 12.01%-36.00% APR.

Term loans from Funding Circle are typically funded within five days.

Business line of credit

Funding Circle also connects borrowers to funding partners who offer business lines of credit in amounts of $6,000 to $100,000. These lines of credit come in terms of 6 or 12 months. Your repayment schedule will depend on your term. If your term is six months, you will make payments weekly, and if your term is 12 months, you’ll make payments monthly.

To qualify for a business line of credit through Funding Circle, you must have a minimum credit score of 660. The starting rate on this product is 10.99% APR.

There is a $20 monthly maintenance fee on business lines of credit offered through Funding Circle. There is also a draw fee of 1.6% to 2.5%, and a 5% late payment fee. After you apply for a business line of credit, funding can be available as soon as the next day.

Funding Circle criteria: Are you eligible?

Qualifying for business lending products from Funding Circle will largely depend on which product you’re applying for. Minimum credit score, time in business and annual revenue requirements will all vary depending on the funding type.

  • Minimum credit score: 625-700
  • Time in business: Six months for business lines of credit. Two years for term loans.
  • Annual revenue: $120,000 for business lines of credit. $400,000 for SBA 7(a) loan.

Funding Circle does not lend to businesses in the following industries:

  • Nonprofit organizations
  • Weapons manufacturers
  • Speculative real estate
  • Gambling
  • Marijuana dispensaries
  • Pornography
  • Businesses in the state of Nevada, due to state regulations

Required documents

The documents that Funding Circle requires vary from product to product. To apply for a term loan directly from Funding Circle, you will need to provide:

  • Business tax ID
  • Social security numbers of business owners
  • Drivers licenses and state of issue for business owners 
  • Two most recent business tax returns
  • Most recent personal tax return for all business owners
  • Six months of most recent business banking statements

For term loans from Funding Circle partners, you will need to provide the same documentation plus a business debt form outlining all current debt.

For SBA 7(a) loans, you will need three years of business and personal tax returns plus a year-to-date balance sheet or profit-and-loss statement, a document showing all your current business debt and a personal financial statement.

Funding Circle review: Should you apply?

Funding Circle’s current business lending products are somewhat expensive. There are several lenders that offer better low-end APRs. However, Funding Circle’s next-day turnaround may be a good fit for business owners who need fast funding. Also, new businesses that have operated for less than a year may find Funding Circle’s business line of credit suitable because the minimum time-in-business requirement is just six months.

For term business loans, however, you can find lower APRs by shopping the competition. Funding Circle charges the highest possible variable rate on SBA 7(a) loans, so you may want to do comparison shopping for that funding option, as well.

Alternatives to Funding Circle business financing

Funding Circle offers relatively high funding maximums compared to some of its competitors, but you may have trouble qualifying if you have poor credit. As you shop around, bear in mind that companies who accept lower minimum credit scores may also charge higher rates.

Funding Circle vs. BlueVine

BlueVine offers a higher maximum for a line of credit, up to $250,000, with rates as low as 4.8%. BlueVine requires a credit score of only 600 while Funding Circle’s minimum is 660. BlueVine offers this same minimum credit score requirement and similar rates on its business lines of credit. BlueVine does not issue SBA 7(a) loans or term loans, but it does offer invoice factoring, which Funding Circle does not offer.

Funding Circle vs. OnDeck

Qualifications for term loans are lower at OnDeck than at Funding Circle. You’ll only need a minimum credit score of 625, have one year in business rather than the two required by Funding Circle, and have an annual revenue of at least $100,000. You can get a much larger loan at Funding Circle, who provides up to $500,000 in funding compared to OnDeck’s max loan amount of $250,000,but the repayment timeline is much shorter at only 24 months. OnDeck’s business line of credit requirements and loan maximum are the same as Funding Circle. OnDeck does not offer SBA 7(a) loans.

Funding Circle vs. QuickBridge

Quickbridge will consider applicants with credit scores as low as 500, making it more accessible than Funding Circle. However, when your credit score is this low, you usually end up paying higher rates, and Quickbridge does not make its rates publicly available. Quickbridge does not offer business lines of credit or SBA 7(a) loans, but it does offer other products not currently available through Funding Circle, like working capital loans and merchant cash advances.