Funding Circle Small Business Loan Review

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Updated on Wednesday, July 29, 2015

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If you’re looking for a quick way to borrow money to run your business, FundingCircle may be the answer. Funding Circle is an online marketplace that connects investors with small businesses that need funding to expand, purchase new equipment, hire new employees or market products.

The loan terms offered are 3 to 120 and you can borrow $25,000 to $500,000. Interest rates are available from 4.99% to 24.90%. The Funding Circle application process is fast and painless plus its terms are transparent.

Loan Details

During the application process at Funding Circle, you have to turn in 3 years of recent business tax returns, a recent personal tax return and 6 months of recent bank statements. If you need to borrow over $200,000 you’ll also have to provide a YTD balance sheet and income statement

To take out a loan, first you complete the online application. Afterwards you’ll hear from a loan specialist within 2 hours who will help you gather documents for final verification. When your paperwork clears you can receive funding within 1 to 2 weeks.

At minimum to qualify you must have the following:

  • 2 years of operating history
  • A FICO score of 620 or above
  • Annual revenue over $150,000
  • No bankruptcies in the last 7 years
  • No more than five tax liens in the past 10 years

According to Funding Circle, during the underwriting process both technology and a representative will review your application for loan offers. Online customer reviews and real-time cash flow are factors, other than your credit score, that an underwriter may use to weigh your application.

Loans through Funding Circle are secured so you’ll have to pledge an asset as collateral for the loan. This means the lender can take ownership of your property if your loan falls into default. Funding Circle allows you to pledge home equity, vehicles, equipment, accounts receivable or cash savings to secure your debt.

Fees and Gotchas

The Funding Circle loan is very straightforward without many fees or fine print. It charges an origination fee of 3.49% - 6.99% based on your credit strength. Your origination fee is deducted from the loan amount, so it only applies if you’re approved and your loan is funded. There are no fees for prepayment of a loan. The late fee is 10% of your missed payment amount and the non-sufficient fund fee is $35.

Pros and Cons

Funding Circle has competitive rates especially if you have an excellent credit score and a solid business. You can also receive funding quickly and you’re assigned a loan specialist who will personalize loan offers to meet your business needs.

Another perk of the application process is it’s handled entirely online so you don’t have to deal with the hassles of getting approved from a brick-and-mortar bank. And the terms are stated very clearly on the Funding Circle website; you won’t have to worry about any surprises.

One downside of Funding Circle is the collateral requirement applies to all loans. Of course pledging your assets as loan collateral won’t impact you, if you can pay off your small business loan without incident (which everyone plans to do). But you risk loss of assets in the future if something happens and you can’t pay.

In addition, just like any other small business loan if your credit score is average or your business isn’t performing well you’ll have a higher interest rate.



on Funding Circle’s secure website

Alternatives to Funding Circle

Thankfully, you have many small business loan options online with easy applications and low interest. Two you may want to consider are Lending Club and Swift Capital.

Lending Club offers loans from $5,000 to $500,000 for 12 to 60 months. And you’re not required to offer collateral for loans under $100,000. Loan interest is fixed and starts at 9.77% APR. Origination fees are 3.49% - 7.99%. To qualify you must be in business for at least 2 years and have $75,000 in annual sales.

Lending Club


on LendingClub’s secure website

Swift Capital gives funding from $5,000 to $500,000 and you can receive up to $10,000 within an hour of approval. Terms are available from 3 to 12 months. Rates start at 9.90%. The origination fee is 0.00% - 2.50%. To qualify you must be in business for at least 1 year, have monthly revenue of over $5,000 and a credit score of at least 550.

Swift Capital


on Swift Capital’s secure website

Who Will Benefit the Most From a Funding Circle Small Business Loan?

Small business owners can benefit from both Lending Club and Funding Circle because they have similar terms. Funding Circle does allows you to borrow more money than Lending Club, so it’s your best option if you need to borrow more than $500,000.

However, Lending Club does offer $100,000 unsecured. You shouldn’t be completely deterred by Funding Circle because it requires asset collateral, just make sure you understand the implications if your loan should go into default.

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