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About Funding Circle
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Founded in 2010, Funding Circle is a peer-to-peer (P2P) lending platform for small businesses. It connects businesses seeking loans with individual and institutional investors who are looking to lend money. The platform offers business loans ranging from $25,000 to $500,000 with repayment terms between six months and 10 years.
Pros & Cons
Pros
- No prepayment penalty
- Fast funding
Cons
- Strict requirements
- Not all businesses qualify
Bottom Line
For businesses that have made $50,000 or more per year for over two years and whose owners have a 660 credit score or higher, Funding Circle can secure financing in as little as two days. It is available in all 50 states.
What is Funding Circle?
Founded in the wake of the 2008 financial crisis, Funding Circle first began peer-to-peer lending in the United Kingdom. Shortly after, it expanded to the U.S. and other countries.
Funding Circle is not a bank. Instead, it uses technology to match small businesses with investors who want to add small business loans to their portfolios. Funding Circle does manage all the aspects of the loan, from the underwriting to the approval and loan disbursement. Funding Circle manages the repayment process, too.
How does Funding Circle work?
Funding Circle is available for small- and medium-sized businesses that meet the following requirements:
- In business for more than two years
- Earning more than $50,000 per year
- No personal bankruptcies among the owners in the past seven years
- Business owners must have a personal FICO score of 660 or more
All Funding Circle loans are secured loans, meaning each loan is backed by collateral. It will require that you put up certain business assets as backing for your loan. This can include equipment or vehicles but not real estate.
Funding Circle services
Businesses can secure three types of funding with Funding Circle. Each comes with its own requirements and specific fees.
Small business term loan
SBA 7(a) loan
Business line of credit
Funding Circle costs
Funding Circle is transparent about its fees, and borrowers can expect to pay a one-time origination fee of 4.49% to 8.49% as of publishing. Your actual rate will depend on your creditworthiness and be established during the underwriting process. If you are late on a payment, you will be charged a 5% fee on your monthly amount.
Funding Circle does not charge any monthly processing fees, service fees or prepayment fees.
Funding Circle FAQ
What can I use a Funding Circle business loan for?
Funding Circle allows you to use the funds in any way that supports your business, including expanding to a new location, purchasing equipment or inventory, or hiring staff. The funds cannot be used for your personal finances or personal debt.
What if I need to borrow more than $500,000 for my business?
The maximum loan amount is $500,000 per business. If your initial loan is less than that amount and you make at least six consecutive, on-time payments, you can request additional funding, but only up to the $500,000 max threshold. If you have more than one business, you can borrow up to $500,000 per business for a maximum combined total of $1 million.
Can I choose who funds my loan?
No. Funding Circle will assign you to a lender based on a set of criteria. Some borrowers will be assigned to a credit union, where a membership application will need to be submitted.
Which companies are not eligible for Funding Circle?
Funding Circle will not lend to these types of businesses:
- Speculative real estate
- Nonprofit organizations
- Weapons manufacturers
- Gambling businesses
- Marijuana dispensaries
- Pornography
Is Funding Circle legit?
Funding Circle is a legitimate lending platform that says it has helped more than 135,000 small businesses receive over $19.4 billion in financing. As a direct lender, Funding Circle is subject to both state and federal laws and regulations.
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Funding Circle Company Information
- Company Name:
- Funding Circle
- Address:
- 747 Front St., 4th Floor
- City:
- San Francisco
- State/Province:
- CA
- Postal Code:
- 94111
- Country:
- United States
- Website:
- fundingcircle.com
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