Funding Circle Small Business Loan Review

About Funding Circle

Funding Circle

Funding Circle is an online marketplace that connects businesses looking to borrow up to $500,000 with investors who want to lend. By cutting out the high cost, long wait times and complexity of dealing with banks and specialty lenders, you can get an affordable loan for your business in less than two weeks. Loans can be taken out for 1 to 5 years and have competitive rates.

Who is Funding Circle?

Funding Circle, a leading peer-to-peer lending platform in the U.S., U.K., Germany and Netherlands, directly matches small businesses with investors interested in financing their company. Funding Circle operates through the use of advanced data analysis using a proprietary risk calculator to determine loan prices.

The United Kingdom-based company has raised almost $373 million in equity capital since it was founded in 2010. It entered the U.S. market in 2013 and simultaneously raised $37 million in a Series C round led by Accel Partners. It has since become a “unicorn” — a startup worth more than $1 billion — one of only a handful of such companies based in London.

Their unique business model opens up small business lending to a new set of investors, which boosts competition in the market, thereby forcing banks to improve their products and services. With Funding Circle, companies can find serious, agile investment options, while investors find rewarding and stable returns.

Lender highlights

  1. Peer-to-peer funding: Its unusual funding model means Funding Circle has an innovative edge over other funding models. Funding Circle has access to a large line of capital, and has a vested interest in serving their customers.
  2. Dedicated account rep: Every borrower is paired with a representative to help them through the process and make sure everything stays on track.
  3. No prepayment penalties: Funding Circle charges no fees to repay your loan early and interest only applies during the time the funds are borrowed.

What Funding Circle offers?

Funding Circle provides secured loans between $25,000-$500,000 with repayment terms as short as six months or as long as five years. Payments are due each month, starting one month from the day the loan is funded.

Loan product Loan amount Loan term Interest rate range Fees Time to funding
Term loan $5,000–$500,000 3–120 months 4.99%–19.49% (80% of loans 8-14% APR) Origination fee: 3.49% - 6.99%; Late payment fee: 5% of missed payment; no prepayment fee Approval in 24 hours and funding in as few as five days


Both interest rates and origination fees are determined during the underwriting process and correspond to the strength of the applicant’s credit profile.

Eligibility requirements

Loan product Annual revenue Min. business credit score or personal credit score Time in business
Term Loan No requirement 620 2 years


Loans provided by Funding Circle are currently only available to residents of the U.S., Germany, Netherlands, and the U.K. Successful borrowers tend to be established companies that have been in business for around 10 years, have $2 million in annual revenue, and employ 10 people.

Which industries does Funding Circle service?

Funding Circle has helped fund thousands of businesses, including veterinary clinics, cosmetic companies, and pharmacies. The lender does not provide small business loans to the following industries:

  • Speculative real estate
  • Nonprofit organizations
  • Firearms manufacturers
  • Gambling businesses
  • Drug dispensaries
  • Adult entertainment and/or materials

How to apply for a loan with Funding Circle?

Applicants will be pleased to know they will be assigned to a dedicated account manager to help walk them through the application process and answer any questions. The application process can be completed in as little as 10 minutes and consists of three steps:

  • Step 1: Online application (takes five minutes, no hard credit pull)
  • Step 2: Submit bank statements and tax returns
  • Step 3: Underwriting and funding

Required application documents:

  • Two years (most recent) of business tax returns
  • Previous year’s personal tax return
  • Last six months of bank statements
  • Business debt information


Pros Cons
No annual revenue requirement Tight eligibility requirements
Each applicant gets a dedicated account manager Not suitable for immediate cash need; geared toward established businesses who need large loans for expansions
Faster and more flexible than a bank loan Loans are secured by collateral

Who is the best fit?

Funding Circle is not a good fit for fledgling startups that don’t have a strong track record or bringing in serious revenue. While there is no minimum requirement for annual revenue, there are other requirements that make this lender more restrictive than its competitors. The best borrowers are:

Established businesses: The typical credit profile for Funding Circle borrowers are established companies that have been in business for at least a decade, and have $2 million in annual revenue and around 10 employees.

Expanding businesses: With a $5,000 minimum level of funding, Funding Circle loans are meant to be used for business expansion, not immediate cash needs.

Businesses with good credit: Funding Circle focuses on businesses with a stellar track record, and requires a minimum credit score of 620 to obtain funding.

What’s in the fine print?

Funding Circle requires a lien on business assets and a personal guaranty from the primary business owners. However, the lender is flexible about what can be used for collateral. For example, you can use your home equity, vehicle, piece of equipment, accounts receivable, or cash savings as collateral on your loan.

The bottom line: How Funding Circle stacks up

Funding Circle is a good option for entrepreneurs that are ready to expand their business. This exciting company is bringing dynamism to a staid industry, giving companies the chance to get funding from nontraditional, yet motivated, investors.

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