Funding Circle Small Business Loans: P2P Loans with Lower APRs

Funding Circle small business loans are good for business owners with fair or better credit scores and for established businesses that need more traditional financing quickly.

Editor's Rating

4.5

Good for

  • Borrowers with fair to excellent credit scores
  • Businesses that large loans or longer terms

Bad for

  • Businesses that haven't been profitable in past 2 years
  • New businesses or startups

Funding Circle Small Business Loans: P2P Loans with Lower APRs

Funding Circle small business loans are good for business owners with fair or better credit scores and for established businesses that need more traditional financing quickly.

Good for

  • Borrowers with fair to excellent credit scores
  • Businesses that large loans or longer terms

Bad for

  • Businesses that haven't been profitable in past 2 years
  • New businesses or startups

Editor's Rating

4.5

Funding Circle Small Business Loans: P2P Loans with Lower APRs

Editor's Rating

4.5

Good for

  • Borrowers with fair to excellent credit scores
  • Businesses that large loans or longer terms

Bad for

  • Businesses that haven't been profitable in past 2 years
  • New businesses or startups

Funding Circle matches accredited individual and institutional investors with small businesses that need funds in the U.S., U.K., Spain, Germany and Netherlands. If you can’t meet the credit score minimums of a bank or credit union and your business needs financing within one to two weeks, Funding Circle is a good choice for small business loans. You can get funding within 10 days, and you may qualify for single digit APRs if you have a strong credit score.

Funding Circle Review: Who Should Consider Applying?

Funding Circle small business loans are good for business owners with fair or better credit scores and for established businesses that need financing within one to two weeks. The lender offers small business loans up to $500,000 for terms up to five years. New businesses cannot qualify for Funding Circle loans as the lender requires a minimum of two years in business.

Good for...

Bad for...

  • Businesses with fair to excellent credit scores
  • Businesses that want monthly payments

  • Businesses that haven't been profitable in past 2 years
  • New businesses or startups

To qualify for a business loan from Funding Circle, you will need a minimum credit score of 620 and you must personally guarantee the loan. Your business also must be at least 2 years old, show profitability on the last two years of tax returns, have an annual revenue of $150,000 and  be incorporated or an LLC. Funding Circle loans are secured, but there are no specific types of collateral required. Instead, the company will file a lien on your general business assets. Additionally, you or your business cannot have had any bankruptcies in the past seven years.

Funding Circle can fund your loan within 10 days, and while this is faster than a bank, it may be slower compared to other alternative lenders that can fund a loan in less than one business day. However, you may qualify for APRs as low as 8% if you have a strong credit score, and this is a competitive rate even when compared to some traditional lenders.

When you get a loan from Funding Circle, you will make monthly payments that begin one month after receiving funds. This allows your business more time to begin paying off the outstanding loan balance. Funding Circle does have origination fees up to 5.99%, but they can be as low as 0.99% depending on your loan terms, business cash flow and personal credit score.

There are no prepayment penalties, but if you fail to make a payment on time, you will have a fee of 10% of the amount due. An unsuccessful payment transaction will also cost $35, so ensure that your business bank account has the necessary funds when your monthly payment is due.

Funding Circle Business Loan Features

Funding Circle uses annual fixed interest rates that vary between 5.49% and 27.79%. Usually, a longer term means a higher interest rate, but this also depends on other factors such as cash flow trends, profitability and personal credit score. After Funding Circle determines your origination fee based on these factors, the lender will then determine an APR.

How Do I Qualify for a Funding Circle Business Loan?

  • Minimum age of business: 2 years
  • Minimum gross annual revenue: $150,000
  • Minimum credit score: 620
  • Need a personal guarantee
  • Business must be incorporated or an LLC
  • Must show profitability on two most recent tax returns

Loan Amount Range

$25,000 - $500,000 

APR Range

7.35% - 33%

Fees

  • Origination fee: 0.99-6.99%
  • Late payment fee: 10% of amount due
  • Non-sufficient funds fee: $35
  • No prepayment penalty

Loan Terms

6 - 60 months

Repayment Options

Monthly payments

Funding Circle Application Process

For loans under $300,000, Funding Circle needs your two most recent business tax returns, your most recent personal tax return and your six most recent business bank statements. For loans over $300,000, Funding Circle needs your business’s balance sheet, income statement and outstanding business loans and credit worksheet in addition to the aforementioned documents. A loan specialist will contact you for additional information or documentation as needed.

Throughout the online application process, you’ll be able to see the potential details of your loan. After your submit your application, Funding Circle will do a hard pull on your credit report and evaluate your real-time cash flow and online customer reviews.

Funding Circle Application Process

How Does Funding Circle Compare to Other Online Lenders?

Funding Circle has more stringent requirements than other online lenders, so you may be looking for loans that better suit you and your business. Let’s take a look at some of Funding Circle’s competitors. 

Funding Circle vs. Lending Club

If you’re looking to borrow a smaller amount or you can’t meet Funding Circle’s eligibility requirements, Lending Club is a good alternative. Lending Club  is also a peer to peer lender and offers loans up to $300,000 for terms up to 5 years. Like Funding Circle, Lending Club requires two years in business and a minimum credit score of 620, but it only needs a gross annual revenue of $75,000. For Lending Club loans, the borrower needs to own at least 20% of the business. 

Funding Circle vs. OnDeck

OnDeck is another strong choice if you can’t meet Funding Circle’s stricter eligibility requirements. OnDeck offers two products: business loans up to $500,0000 and lines of credit up to $100,000. To qualify, you’ll need to be in business for at least one year and have an annual revenue of $100,000. You'll also need a personal credit score of at least 500.

Funding Circle vs. Prosper

If you need a smaller loan or have a newer business, Prosper could be a good choice. Prosper offers loans with a variety of purposes including for medical needs and home improvement. Prosper does not provide loans to small businesses located in Iowa, Maine or North Dakota. If you apply for a business loan on Prosper’s website, the lender will refer you to their partner, OnDeck. Otherwise, you can borrow an unsecured Prosper personal loan up to $35,000 to use for business purposes.

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