Peer to peer lending is a growing industry and has created flexibility by allowing people to offer loans. Many p2p platforms provide personal loans leaving out business loans. Funding Circle has come to address this problem by providing a platform where individual investors can lend money to businesses in the UK. In this article, we will review Funding Circle, its pricing and how it works.
Quick Facts About Funding Circle
- Funding Circle is a peer-to-peer lending platform that is helping SMEs access funding by connecting them with peer to peer investors.
- Funding Circle provides three types of loans to businesses, Unsecured business loans, Small Business Loans and Self Employed Business Loans.
- Funding Circle interest rates range between 2.9% and 12.1% per year. It also charges originations fees ranging between 3.49% and 6.99% and 1% annual fee.
- 1 Who Can Invest in Funding Circle?
- 2 What is Funding Circle?
- 3 How Funding Circle Works
- 4 How to Apply for Funding Circle Loan
- 5 Type of Loans given by Funding Circle
- 6 Funding Circle Loans Requirements
- 7 Funding Circle Fees
- 8 Funding Circle Reviews for Investors
- 9 Funding Circle Supported Countries
- 10 Is Funding Circle Safe?
- 11 Funding Circle Customer Support
- 12 Funding Circle Reviews
- 13 Funding Circle Alternatives
- 14 Conclusion on Funding Circle Review
Who Can Invest in Funding Circle?
To qualify to become an investor at Funding Circle, you need to meet the following requirements:
- Be at least 18 years old
- Have a social security number
- Be an accredited investor
- Make a minimum initial investment of £25,000
What is Funding Circle?
Funding Circle is a peer-to-peer lending platform that provides business loans in the UK by connecting businesses with investors. Funding Circle was founded in United Kingdom in 2010. It is the pioneer of peer-to-peer lending for businesses. Funding Circle peer to peer lending connects businesses with investors while it makes money through service fees.
How Funding Circle Works
Before lending money to businesses, Funding Circle evaluates the borrower to determine creditworthy. If the borrower is approved, Funding Circle presents the loan request to investors.
How to Apply for Funding Circle Loan
To apply for a Funding Circle loan, you need to make an application online. You will need to provide details like your business name, amount you wish to borrow and contact details. Once you have provided personal details, the second thing is to provide business details like the number of employees, business location, outstanding business debt and what you intend to do with the borrowed funds.
Once you are done with that, you need to upload documents like personal tax returns and operating bank statements. Once you have submitted the application, you will be assigned an account manager who will help you with the remaining loan application process.
Funding Circle will go through your loan request and if you qualify, they will send you an offer. The offer contains origination fees and interest rates. If you accept the offer, funds will be deposited into your account within a few days.
Type of Loans given by Funding Circle
Funding Circle offers three types of business loans; Unsecured Business Loans, Small business Loans and Self employed loans.
- Unsecured Business Loan. You can borrow a loan of between 10,000 and 500,000 for your business. This can be working capital or business growth, or expansion.
- Small Business Loans. You can also borrow a small business loan to boost your cash flow, pay your business expenses and grow your business.
- Self-employed for small businesses. If you are a sole trader or have a partnership or a Limited Company, you can borrow a loan from Funding Circle.
Funding Circle Loans Requirements
For loans below £300,000, you need to present personal returns, business tax returns and recent business bank statements. To qualify for a loan above £300,000, Funding Circle requires you to present business income statements, outstanding business loan and income statements. To qualify for Funding Circle loan, you need to meet the following requirements.
- Have been in business for at least 2 years
- Your business must have not been bankrupt for the last 7 years
- Have a minimum credit score of 620
- Have no tax liens for the last 10 years
Funding Circle Fees
Funding Circle can lend to businesses loans ranging from £25,000 to £500,000 while the term length is between 6 months and 5 years. Funding Circle interest rates for loans advanced to businesses range between 2.9% and 12.1% per year. Funding Circle does not charge prepayment fees.
It is worth noting that interest rates are determined by your creditworthiness, loan term length and your business performance. Funding Circle interest rates are usually fixed. There are is also an origination fee ranging between 3.49% and 6.99% and 1% annual fee based on unpaid principal.
Funding Circle Reviews for Investors
You can become an investor with Funding Circle and start giving out loans to UK businesses. Funding Circle allows individual and institutional investors to open accounts. To start investing in Funding Circle, this is how to get started.
How to Start Investing in Funding Circle
To become an investor with Funding Circle, you first need to open a bank account. To do so, you will need to fill a form with your personal details like name and email address. After that you need to choose the type of account you want to open. The account can either be a Single-member entity or an Individual Retirement Account (IRA).
After that, you need to prove that you are an accredited investor. An accredited investor is one whose income exceeds $200,000 for the last two years. Alternative, an accredited can be one who earns at least $300,000 inclusive of his or her spouse’s income. The income must exceed these amounts for the last two years and expect the same in the current year.
Also, you can be an accredited investor if you have a net worth of over £1 million either alone or with your spouse. Funding Circle will also send you a verification email so that you can verify your account. After that, you can upload identification documents. Once you are through with account set up, you will be required to make a minimum initial investment £25,000 to your account.
Funding Circle Supported Countries
Funding Circle merged with Endurance Lending Network and expanded its services in the US market. Today, Funding Circle is available in the following countries: the UK, the US, Netherlands, Germany. There are plans to expand to the Canada.
Is Funding Circle Safe?
Funding Circle is a safe and secure investment peer to peer lending platform. Funding Circle is listed in the UK’s stock exchange. It is a legitimate business funding platform and chances of an investor losing money due to fraud are very minimal.
Funding Circle Customer Support
Funding Circle offers phone and email customer support. You can also reach customer service through Funding Circle Facebook page or Funding Circle Twitter page. When you borrow a loan, you also get assigned an account manager during the loan period.
Funding Circle Reviews
At the time of writing, Funding Circle had a 4.6 rating from over 11,000 reviews on Trustpilot. While 82% of reviewers were satisfied with Funding Circle loans, 9% of reviewers rated its services as poor citing issues such as poor communication, inaccurate credit rating, long approval process despite the website claiming approval in less than an hour, unsolicited junk mail, bullying tactics, etc.
Funding Circle Alternatives
You can use these other peer to peer lending platforms for businesses as an alternative to Funding Circle.
Conclusion on Funding Circle Review
Funding Circle is an excellent peer to peer lending platform for businesses. If you wish to become an investor at Lending Circle, you need to be an accredited investor. To qualify for a loan, your business must have been in existence for the least two years and have a minimum credit score of 620 and have no tax liens for the last 10 years.