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Funding Circle Lending Review

Funding Circle Small Business Loans: 2021 Review

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Editor’s note: At Lantern, we strive to help you make financial decisions with confidence. To do this, we occasionally feature content that includes information about our partners and their products or services. We do not provide, endorse, or guarantee any third-party product, service, information or recommendations—and our opinions are our own.
Susan Guillory

Susan Guillory

Updated June 4, 2021

Overview of Funding Circle

Since 2010, Funding Circle has raised $11.7 billion from investors and helped 81,000 business owners do more in their companies. It’s a win-win: investors diversify their portfolios with potential positive returns, and businesses get the funds they need to create jobs, grow, and help their local economies.
Pros and cons

Pros

  • Offers both term loans and SBA loans
  • In most cases, personal credit is not impacted when applying for a term loan. However, business credit may be impacted.
  • Decision on application for term loans are made within 24 hours; funds deposited within 3 days (subject to credit approval)

Cons

  • Minimum FICO® Score of 680 for SBA loans (and 660 for term loans) may be challenging for some businesses to qualify
  • Funding Circle charges a 3.49-6.99% origination fee on top of your interest rate
  • Requires personal guarantee

Funding Circle Small Business Loan Terms, Rates, and Fees

Loan amounts: $25k - $500k for term loans, $20k - $5 million for SBA loansAPR range: 11.29% - 30.12% for term loans, Prime + 2.75% for SBA loans  (Updated as of 4/9/2021.)Origination fee: 3.49-6.99%Minimum credit score: 660 term loan/680 SBA loanTime to funding: 3 days Co-borrower needed: No

Other Lenders

When exploring your financing options, it’s a good idea to look at multiple lenders to determine which has the products and rates that work for your business needs.
  • Kabbage
  • Fundbox
  • StreetShares

What Types of Loans Does Funding Circle Offer?

Funding Circle offers two products: business term loans and Small Business Administration (SBA) loans.With the small business loans, eligible borrowers can receive $25,000 to $500,000, with a six-month to five-year repayment period and a fixed interest rate. Those who have been in business for at least two years and are seeking funds they can repay quickly may consider a term loan.The SBA loans have longer terms, up to 10 years, and borrowers can receive up to $5 million. Requirements are a little more stringent than with the term loans, so you’ll need Good or better credit (the FICO® Score requirement is 680). And to qualify, you will need to have been in business for three years or more. SBA loans can take one to two months to complete the application and receive funding. 

Important to Keep in Mind

Lenders like Funding Circle charge fees in addition to the interest rate on your loan, so it’s important to understand and budget for these additional expenses. Funding Circle charges an origination fee between 3.49% and 6.99%, as well as a 1% service fee.While online reviews are mixed, complaints seem to focus around Funding Circle problems around customer service not being very helpful or responsive; these may be worth considering if you decide to apply for a loan.

Applying for a Funding Circle Small Business Loan

According to their website, applying for a Funding Circle business term loan takes just six minutes. Your personal credit is not impacted by your application, but your business credit score (if you have one) may be impacted by your application.

Funding Circle Requirements

Funding Circle requirements for a business term loan are fairly simple and straightforward. Expect to be asked for basic information about you and your business, as well as:
  • Business tax ID
  • Names of shareholders or owners with 20% (or more) ownership
  • Social Security number of business owner(s)
  • Driver’s license number and state of issue
  • 2 most recent years of business tax returns
  • 1 most recent year of personal tax returns for each business owner
  • 6 most recent months of bank statements
For an SBA loan, you may be asked to provide:
  • 3 years of business and personal tax returns
  • 2019 balance sheet and profit & loss statement
  • Year-to-date balance sheet
  • Business debt schedule
  • Personal financial statement
  • Personal Information Statement 4506

Your Personal Account Manager

Within one hour of applying for a loan, you should hear from your personal account manager who will get more information about your business, and they may also request further documentation to process your application. Generally, loan terms will also be discussed at this point.

Speedy Approval

You should receive word on whether your application was approved or not within 24 hours for a term loan. Once you review and accept your term loan offer, they claim you will receive your funds within three business days. You’ll be given your repayment terms, and you can set up your monthly payments automatically if you choose. You will not be charged a fee for early repayment.Note that an SBA loan can take one to two months to complete the application and receive funding. 

The Bottom Line

If you’re looking for fast turnaround on a loan and have the required credit score to qualify, Funding Circle could be one of the speediest options for a business loan that you will find.If you’ve considered applying for an SBA loan but felt it was a hassle, working through Funding  Circle, with a dedicated Loan Specialist ready to help you navigate the process, could be an easier path.Note, however, that this financing will cost you more than the interest rate you are quoted, with that hefty origination fee and service fee, so be aware of the full cost of this financing.Keep in mind that, if you run a startup that is younger than two years, or don’t have Good or better credit, you may not qualify for a loan from Funding Circle. In addition, Funding Circle eligibility requirements include no bankruptcies over the last seven years and you may not be located in Nevada (due to state commercial lending regulations). Looking for more small business loan options? With Lantern's help, you can spend less time searching for financing and more time growing your business.

Frequently Asked Questions

Is Funding Circle a legitimate lender?
Is Funding Circle a bank?
Does Funding Circle offer startup business loans?
How do Funding Circle loans work?

About the Author

Susan Guillory

Susan Guillory

Susan Guillory is the President of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
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