If you are looking for a loan to assist your business, Funding Circle is here. It is an online marketplace that provides peer-to-peer loans to small businesses. It connects business owners looking to borrow between $25,000 and $500,000 with investors who are willing to fund loans.
They provide loans with term lengths from 6 – 60 months and fixed interest rates that range from 4.99% to 22.99%. Funding Circle’s rates are relatively reasonable compared to some online business lenders who have interest rates that can go up to 99%.
Another benefit of Funding Circle is that you can get your loan relatively quickly—in as little as 10 days. Lenders like Funding Circle might allow your business to get funding faster than you would be able to get with SBA loans or other small business loans.
Rates, Terms, Fees, & Limits of Funding Circle
- The loan amounts between $25,000 and $500,000.
- There is a fixed interest rates between 4.99% and 22.99%.
- Lowest rates are offered on their shortest loans.
- There is loan terms of 6 – 60 months.
- Also, there is origination fee between 3.49% – 6.99%.
- No prepayment fees.
- Furthermore, there is a 5% missed payment fee.
- It requires a personal guarantee and lien on business assets.
The Application Process
1) Endeavor to Know if You Pre-qualify
Always try to know if you pre-qualify. To do this, first, you have to complete an online application to pre-qualify you for a loan.
This should only take around 10 minutes.
2) Make Sure you Fill out the Full Application
After that, you will hear from a personal loan specialist within 1 hour to answer your questions and get the documentation that’s required for a full application.
That documentation includes things like the last two years of your business tax returns, your last personal tax return, six months of bank statements, as well as any information about existing business debts.
3) Funding Circle Decides if You are Eligible
Finally, Funding Circle reviews your credit worthiness with a hard credit check. You will be told their decision within as little as 24 hours. Once a decision has been made, it will take from five to 10 days to get your funds.
If you don’t qualify for Funding Circle because of bad credit, you can check out these bad credit business loan options.
Before you are eligible, please not. Funding Circle was created to help businesses of all sizes expand and grow, and they serve many different industries. They have funded businesses in 28 sectors, but the top 10 sectors. Their eligibility goes thus.
They fund professional, scientific, and technical services.Also, they fund retail, construction, health care and social assistance. Furthermore, they fund accommodation and food services; administrative support; wholesale trade; real estate and rentals; and transportation and warehousing.
They do not lend to certain kinds of businesses like non-profits, weapons manufacturers, gambling businesses, and marijuana dispensaries. The average funded business is 11 years old, has 12 employees, and annual sales of around $1,430,000. While they lend in all states except Nevada, they have given out a large proportion of their loans in states like California, New York, Florida, and Texas.
Funding Circle Advantages
No Prepayment Penalty
Finally, the last benefit of borrowing from Funding Circle is that the lender allows you to repay your loan early without a prepayment penalty.
Some online lenders disincentivize early repayment by tacking on a penalty fee or by creating complex repayment structures that don’t allow you to save money if you repay your loan early. With Funding Circle, that’s not the case. You can save money on interest if you can repay the cash you borrowed early.
There is Quick & Easy Application Process
Funding Circle allows you to quickly apply for a loan and get help with your application from a real person over the phone. Then Funding Circle reviews your application within 24 hours and gets back to you about whether you’ve been approved.
This quick application turnaround ensures that you don’t lose time waiting for a response, unsure whether you’ll get the funding you need.
Once you’re approved, you can then get funding in as quickly as 5 days. The decision making and disbursement is much faster than many banks and credit unions who can take weeks to get back to you to let you know if you’re approved.
It has Lower Rates than Some Other Lenders
Another benefit of Funding Circle is that they have lower rates than some other online lenders. While the costs of a loan with Funding Circle can still be expensive if you don’t qualify for their lowest interest rates, it is much lower than other popular online lenders whose rates can start much higher than Funding Circle’s maximum rate.
Lower Rates Available
Also, while Funding Circle has lower rates than many online lenders, you will likely get a lower rate if you get a term loan from a bank or an SBA loan. While these loans can take longer to be funded, you might save a significant amount of interest over the life of the loan.
No Minimum Revenue Requirement
A key benefit for your business might also be the fact that they don’t have minimum annual revenue requirements in order to qualify for a loan. While they do tend to lend to businesses that have been around for longer than their two-year minimum, it’s not explicitly required.
Disadvantages of Funding Circle
Below are some of the demerits of funding circle;
Other Lenders Disburse Loans More Quickly
While Funding Circle provides you with quick loans relative to banks and some online lenders, there are online lenders that can get you the money within 24 to 48 hours. If you need money fast, then Funding Circle might not be the right choice for you.
Some Businesses May Not Meet Eligibility Requirements
Funding Circle requires that you be in business for at least two years before you can apply for a loan, which means that it’s not designed for businesses that are just starting out.
They also are more likely to lend to businesses that are more established and have more employees. This means that not every business is likely to qualify for a Funding Circle loan.
There is Mixed Reviews
If you’re interested in reading customer Funding Circle reviews, you can look at the 18 reviews and 4 complaints registered with the Better Business Bureau. Reviews range from people who are very happy with their lending experience to those who are upset about the service they received.
In a Nutshell
In summary, FundingCircle is a great choice for medium-sized small businesses to access money quickly at a relatively low interest rate.
They offer a lower interest rate than many online lenders—though you might be better off getting an SBA loan from a bank if you’re able to qualify for a FundingCircle loan.
Thus, if you are looking for a loan to boost your business you can consider it.