Funding Circle Business Loan Review
 | Estimated APR range: 15.22% to 45.00% for term loans Best for: Established small business owners with moderate revenue and fair to good credit looking for speedy business financing |
Pros and cons of Funding Circle
| Pros | Cons |
|---|---|
Quick funding times Transparent requirements No hard credit check for most applicants No prepayment penalties | Hard credit check for partnerships Collateral and personal guarantee required for loans Doesn’t work with every type of industry |
Funding Circle small business loans review
Established in 2010, Funding Circle is a marketplace lending platform connecting small business owners with institutional investors, similar to peer-to-peer lending. With Funding Circle’s business term loan, you can access up to $500,000, with extended repayment terms giving you up to 84 months to repay the debt. Funds can be used for working capital, supplies, inventory, payroll, refinancing business debt and more.
Even though Funding Circle relies on investors for capital, it oversees the entire loan process — making a lending decision in about a day, delivering funds in as soon as 48 hours and managing loan payments. In addition, Funding Circle offers free entrepreneurial resources to help you grow and strengthen your business’s financial health.
A small business loan from Funding Circle could be a good option if you need quick financing and your company has been in operation for at least two years with a fair to low credit score. However, certain types of industries are not eligible, such as nonprofit organizations or gambling businesses. Furthermore, you must provide non-real estate collateral and a personal guarantee, meaning your personal assets could be seized if you fail to repay the debt.
Who is Funding Circle for?
- Businesses looking for long-term financing. Funding Circle’s long-term business loans come with flexible repayment terms ranging from 6 to 84 months, allowing you to find an option that works best for your business’s needs.
- Well-established business owners looking for quick business loans. Your business must operate for at least two years to qualify for a business term loan with Funding Circle. If you qualify, you can receive funds as quickly as two business days.
- Companies with collateral. Funding Circle requires non-real estate collateral to secure your loan, such as equipment, vehicles, inventory and accounts receivable (money owed to your business)
Funding Circle small business financing at a glance
| Product | Loan amounts | Repayment term | Estimated APR range | Fees |
|---|---|---|---|---|
| Business term loans | $25,000 to $500,000 | 6 to 84 months | 15.22% to 45.00% | Origination fee: 4.49% - 10.49% Late payment fee: 5% of missed payment amount |
Term loans
Funding Circle offers quick business loans from $25,000 to $500,000, with funds hitting your business bank account in as little as two days after approval. Repayment terms range from 6 months all the way up to 84 months, with no penalties for repaying your debt early.
The estimated interest rate range for these term loans is 7.49% to 28.99%, which is higher than a traditional bank loan’s typical starting rate of 6.25%. Note that Funding Circle’s annual percentage rate (APR) can run from 15.22% to 45.00% APR, which includes all additional loan charges like origination fees. However, you won’t know your exact rate until you apply.
The good news is Funding Circle doesn’t run a hard credit check at any stage in the application process unless your company operates as a business partnership.
Funding Circle borrower requirements
| Minimum annual revenue | $50,000 |
| Minimum time in business | 24 months |
| Minimum credit score | 660 |
Funding Circle only provides secured business financing. This means you need to provide some type of collateral to secure your loan, such as business equipment, accounts receivable (money owed to your business), inventory or delivery vehicles. However, Funding Circle doesn’t accept real estate as collateral. If you fail to repay the loan, Funding Circle can seize whatever assets you provided.
Any owners with at least a 20% stake in the business will also need to sign a personal guarantee, agreeing to repay the loan from their personal funds if the business fails to repay the debt.
In some cases, you may need to jump through a few extra hoops when applying for a business loan, such as joining one of Funding Circle’s partner credit unions.
Required documents
Funding Circle will ask for a few documents to verify that you meet its business loan requirements before approving your application:
- Bank statements: Six most recent months
- Personal tax returns: Most recent year from all owners with 20% equity or more in the company (for loan amounts of $75,000 or more)
- Business tax returns: Two most recent years (for loan amounts of $75,000 or more)
Alternatives to Funding Circle
| Funding Circle | Bluevine | Fundbox | |
|---|---|---|---|
| Minimum credit score | 660 | 625 | 600 |
| Loan products offered | Term loans |
| Lines of credit |
| Time to funding | 2 to 5 business days | Same day to 3 business days | 1 to 3 business days |
| Starting interest rate | 7.49% | 7.80% | 4.66% fee for each 0.00-week repayment plan |
| Maximum loan size | $500,000 | $250,000 | $150,000 |
| Minimum annual revenue | $50,000 | $480,000 | $100,000 |
Funding Circle vs. Bluevine
Bluevine is another popular online lender providing lines of credit up to $250,000. Credit score requirements start at 625, but your company must operate for at 12 months with at least $120,000 in annual revenue — which could be a struggle for many companies, especially startups.
If you need fast access to capital, Bluevine makes credit decisions in about five minutes, with funds deposited as soon as the next business day. You can even get same-day financing if you have a Bluevine checking account or are willing to pay a $15 wire transfer fee.
While Funding Circle only has one business product, Bluevine offers business credit cards, business checking accounts with no monthly fees and an automated bill management system. Because of this, Bluevine could be the better choice if you want to streamline all of your business finances into one platform. However, low-revenue companies might have better luck with Funding Circle since it only requires $50,000 in annual revenue. Plus, you can see estimated APR ranges in advance with Funding Circle, whereas Bluevine doesn’t list its upper range of business loan interest rates.
Funding Circle vs. Fundbox
Compared to the similar-sounding Funding Circle, Fundbox offers business lines of credit up to $150,000 with next-day funding availability. Fundbox could be a good choice for those needing bad credit business financing since it accepts credit scores as low as 600.
Additionally, companies with at least six months of operation can consider Fundbox for a startup business loan. However, you need at least $100,000 in annual revenue to qualify.
While Fundbox’s starting rate of 4.66% is lower than Funding Circle’s lowest rate of 7.49%, you won’t know your final rate until you submit an official application. If you decide to move forward with Fundbox, make sure your business budget can handle the quick repayments — each draw comes with automated weekly payments over the course of 12 or 24 weeks.