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Funding Circle Business Loans: 2023 Review

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  • Estimated APR range: 11.29% to 30.12% for term loans
  • Best for: Business owners with strong credit who are looking for long-term loans or SBA loans.

Pros and cons of Funding Circle

ProsCons

  Loans ranging from $75,000 to $5.5 million, depending on loan type

  Funding options include long term loans, SBA 7(a) loans and business lines of credit

  Term lengths up to 84 months

  Collateral required

  Longer average funding time when compared to other platforms for SBA loans

  Requires a personal credit score of at least 660 for business term loans (recommended score of 680 for SBA loans)

Funding Circle small business loans review

Funding Circle is an online peer-to-peer lending platform that connects businesses to lenders. It offers several different financing options for small businesses, including term loans, SBA 7(a) loans and business lines of credit. Lending decisions may be made in as little as 24 hours, with times to funding in as few as three business days. Funding Circle has helped over 130,000 small businesses access over $19.4 billion in financing.

Who is Funding Circle for?

  • Small business owners with good credit.
  • Those looking for a quick alternative to a bank loan and long repayment terms.
  • Business owners who don’t mind providing collateral and a personal guarantee.

Funding Circle small business financing at a glance

ProductLoan amountsRepayment termEstimated APR rangeFees
Business term loans$25,000 to $500,0006 to 84 months11.29% to 30.12%Origination fee: 4.49% to 8.49%
Late payment fee: 5% of missed payment
SBA 7(a) loans$75,000 to $5,000,000Up to 120 monthsRates vary, subject to SBA maximumsSBA loan guarantee fee: 1.7% for loans up to $150,000; 2.25% for loans greater than $150,000
Broker/agent fee
Closing costs
Business lines of credit$5,000 to $250,000Not disclosed10.99% or higher1.6% average draw fee
5% average fee for past due amount

Term loans

Term loans provide a lump sum upfront and you’ll repay it in installments over time. Depending on the amount, term loans can be used for large purchases or even filling a cash flow gap. At Funding Circle, amounts range from $25,000 to $500,000 with terms anywhere from 6 to 84 months. You should anticipate being required to put up some form of collateral, though specifics may vary.

Line of credit

A business line of credit is ideal for those who need ongoing access to funds. Instead of providing a lump sum of cash, it offers a revolving credit line that you can draw on as needed. You’ll only pay interest on the amount borrowed, similar to a credit card. At Funding Circle, credit lines range from $5,000 to $250,000 with no prepayment penalties or monthly maintenance fees. However,Funding Circle states that draws incur a 1.6% fee on average, and late payments come with a 5% fee. Collateral requirements are unclear.

SBA 7(a) loans

Because of the guarantee by the U.S. Small Business Administration, SBA loans are known for their favorable terms and interest rates. You can expect stricter eligibility requirements when compared to term loans, as well as a longer application process. SBA loans are available through approved lenders. SBA 7(a) loans allow financing up to $5,000,000 with terms up to 25 years. Interest rates are subject to SBA maximums, and Funding Circle charges an additional broker fee, though the amount is not stated.

Funding Circle borrower requirements

Minimum annual revenueSBA loans: $500,000 or more
Term loans: $50,000
Minimum time in businessSBA loans: Over three years
Term loans: Two years
Minimum credit scoreSBA loans: 680 (recommended)
Term loans: 660

Funding Circle’s eligibility requirements vary based on the type of financing you’re seeking. To qualify for an SBA loan, you must be in operation for at least three years with an annual revenue of $500,000 and shouldn’t have any federal tax liens against you.

Term loan requirements are a little more lax. Your business must be in operation for at least two years, your minimum credit score must be 660 or higher and you cannot have personal bankruptcies among the business owners within the last seven years. Your business must also operate within an approved industry. Industries restricted from receiving funds are:

  • Speculative real estate
  • Nonprofit organizations
  • Weapons manufacturers
  • Gambling businesses
  • Marijuana dispensaries
  • Pornography

Required documents

For loan applications with Funding Circle be prepared to provide: the following required documents:

  • Last two years of business tax returns
  • Most recent personal tax return
  • At least six months of business bank statements

For an SBA loan through Funding Circle, you’ll need to complete several SBA specific forms, as well as provide profit and loss statements, business licenses and any business leases.

Alternatives to Funding Circle

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Funding CircleOnDeckSmartBiz
Minimum credit score660 for term loans
680 for SBA loans (recommended)
625650 for SBA loans
Not disclosed for term loans
Loan products offered
  • Term loans
  • SBA loans
  • Business lines of credit
  • Term loans
  • Business lines of credit
  • SBA loans
  • Term loans
Time to fundingTerm loans: As little as 2 days
SBA loans: As little as 13 days in some cases
Up to 3 business days for term loanAs short as 7 days
Starting APRTerm loans: 11.29%
SBA loans: subject to SBA maximums
29.90% for term loanStarting at 10.25% for SBA loans
Starting at 8.99% for term loans
Maximum loan sizeTerm loans: $500,000
SBA loans: $5,000,000
$250,000 for term loans$350,000 for SBA loans
$500,000 for term loans
Minimum annual revenueTerm loans: $50,000
SBA loans: $500,000
$100,000 for term loan$50,000 for SBA loans
Not disclosed for term loans

Funding Circle vs. OnDeck

Funding Circle offers high loan amounts and long repayment terms, but if you’re looking for smaller amounts for shorter lengths of time, consider a term loan or line of credit from OnDeck. This may make it a better option for working capital needs. OnDeck offers repayment terms up to 12 months for lines of credit and 24 months for term loans, but its starting APR is 29.90% — in other words, its starting APR approaches Funding Circle’s maximum. Plus, with a minimum credit score of 625 and only requiring 12 months in business, OnDeck may be a good alternative for business owners with lower credit or for startups looking for funds.

Funding Circle vs. SmartBiz

Borrowers looking for an SBA loan will find pros and cons between Funding Circle and SmartBiz. Both platforms connect applicants to SBA-approved lenders. Loan caps are higher with Funding Circle, which could make it attractive to businesses that need more capital. However, SmartBiz’s minimum credit score is lower, and they boast shorter turnaround times — funding in as little as just one week.

 

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