Funding Circle Review

Funding Circle is a digital lending platform that provides small business loans from between £10,000 up to £500,000. Acting as an alternative to mainstream banks, the lender has supported over 135,000 businesses with loans totalling more than £15 billion. 

Funding Circle is a UK-based lender but operates digitally, which means it can offer a rapid application process with quick decisions made for SMEs of all shapes and sizes. The lender also provides flexible lines of credit to help alleviate cash flow issues and spread costs under its ‘Flexipay’ product.

With high customer review scores and a long history in the market, Funding Circle may be a good choice for your business. However, before you decide – or if they have turned you down in the past, you should consider contacting our team here at Rangewell. 

As independent financial experts, we can assess your business requirements and improve your application and negotiations with Funding Circle to result in a better offer – all at no cost to you.

If you’ve been declined, we can also help find alternative options better suited to your current needs and situation. Get in touch using the button below, or learn about Funding Circle, including eligibility requirements, application process and more. 

What is Funding Circle

Funding Circle is an independent lender founded in 2010. Listed on the London Stock Exchange, the business operates differently from traditional banks. Lending is arranged within the online platform, which connects borrowers with investors who want to lend to SMEs. All loans are managed by Funding Circle and serviced throughout the loan, with repayments going to the investor. 

Funding Circle is FCA regulated but is not covered by the FSCS. 

What types of loans does Funding Circle offer?

Funding Circle offers two main types of loans, business loans and FlexiPay. The business loans from the lender are flexible and range from £10,000-£500,000, with the exact amount and rate tailored to your specific application. 

Unlike many other independent lenders, Funding Circle offers other types of loan structures, such as Asset Finance, under its ‘Business loan’ product. Other options include self-employment loans and working capital loans. 

This diverse offering means the lender can offer you a more appropriate type of loan product to help fuel your business growth. If, however, you’re unsure which type of loan is right for you, speak to Rangewell first, and we’ll help you understand the pros and cons of each type. 

In addition to business loans, Funding Circle offers a specific ‘FlexiPay’ product, which offers to help alleviate cash flow issues by introducing an interest-free line of credit between £1,000 and £250,000 for businesses to utilise when paying invoices. Once your application is approved, you can use FlexiPay to pay invoices in your name and then repay over 3 months at 4.5%.

Are you eligible for a loan from Funding Circle?

Like all lenders, Funding Circle expects borrowers to meet certain eligibility criteria. The first consideration is which structure your business operates under, as eligibility differs for limited companies when compared to sole traders. 

In general, the lender expects the following as a minimum:

• Two years or more of trading history
• At least one year of filed or prepared accounts
• No CCJs registered in the last 12 months and no outstanding CCJs more than £1000
• The majority of owners in your business must reside in the UK
• Good credit history for both the business and any individual directors

Funding Circle also prefers to lend to businesses which have proven to be profitable – though there are exceptions on a case-by-case basis. 

The lender also states it will not lend to any business that offers moneylending services, such as pawnbrokers. If your business offers a similar service, you will need to look elsewhere. 

What information do you need to provide? 

Before you can apply for your loan, you’ll need to gather some information that the lender will expect to see. Funding Circle requires very little compared to other lenders but still asks that you can provide:

• Your latest financial accounts. If you haven’t filed in 2 years, you’ll need to file fresh accounts. All accounts should show a Profit and Loss statement and a balance sheet. 
• Business bank statements for the last six months showing account name, registered address, sort code and account number, as well as daily transactions. 

You don’t need to provide a business plan or financial forecast. 

Does Funding Circle offer secured or unsecured lending?

Funding Circle offers both forms of lending, depending on your business and your financial situation. Secured loans offer lower interest rates but will require collateral to secure your funding against, which your business will have to provide. 

Unsecured lending is more flexible and doesn’t require collateral – but it does demand a personal guarantee. You may be able to borrow up to £500,000 from Funding Circle via an unsecured loan. 

What are the rates and terms? 

The rates and terms Funding Circle offers you depend entirely on your application and the lender’s own risk allocation. They will assign a risk band to you, which is based on your ability to repay the loan, and then make an offer based on that. 

The rates you’re given are fixed, meaning you’ll know exactly how much you must repay each month. Business loan rates start at 4.5% and will increase depending on your risk band and loan term. 

Want better rates or different terms? 

If Funding Circle’s loan offer doesn’t meet your needs, don’t worry. We can help you find a more suitable offer that is built around your business and your requirements – whether that’s a lower interest rate or longer term length. 

What are the fees and charges?

As with most lenders, you must pay an initial fee upon commencement of the loan. When you receive your offer, the fee will be included in it. Fees can be between 1.5% to 6%, and you will pay it when accepting the loan. 

Other than an initial arrangement fee, there are no early repayment fees, so you can repay your loan at no charge. You will still have to pay interest on the time you borrowed. 

FlexiPay, Funding Circle’s cash flow loan offering, incurs a flat 4.5% fee on each invoice you use it for.  

How do I apply?

Funding Circle’s online platform makes it simple to apply for a business loan. To get started, you’ll need to sign up on their website and make your application online. 

Step 1: Prepare in advance

Before you apply for a business loan from Funding Circle, make sure you have access to the documents we listed above. This includes PDF copies of bank statements and accounts to allow for easy upload and sharing with the lender. 

It’s also worth reviewing your business’s credit report, as that will impact your application and, ultimately, your offer. If your score is poor, improving your credit may be better before applying. 

Step 2: Streamline your finances

Any outstanding debts will cause issues in your application, so it’s worth trying to settle any debts and invoices before you apply. If you need help with consolidating your business debt, contact our team here at Rangewell before approaching Funding Circle. 

Step 3: Check eligibility 

Funding Circle allows applicants to check eligibility online without any impact on your credit score. Visit this page and fill out the required information around loan amounts and your circumstances to see if you qualify. 

If you fail this check, don’t worry – you can still finance your business. Contact our Rangewell team, and we’ll discuss your options and find a lender who can support your goals. 

Step 4: Apply online

Use Funding Circle’s platform to fill out the requested details and submit your application. The process will take around 10 minutes, and the lender can issue a decision within an hour – though in reality you’ll probably wait longer than this. 

What if you are rejected by Funding Circle? 

Don’t be disheartened if you are rejected by Funding Circle. You may be refused finance for many reasons, and often the factors that influence a decision are out of your control. Regardless of your background, however, Rangewell can help you. 

Talk to our team if you’ve been rejected in the past. We can help you understand ways to improve your chances of success during future applications, but also direct you to other lenders who may be more suitable for your needs. 

What to do if your Funding Circle loan is coming to an end

If you’ve already had a loan from Funding Circle and you’re approaching the end of your term, have you considered your future finance needs? Even if you’ve been happy throughout the loan period, it’s worth looking into your options before applying with the same lender. 

We can help you negotiate a better deal with your existing lender or with an alternative option – all at no cost to you. Get in touch to learn more. 

Need more funding? 

If you’re not satisfied with the amount of finance you can lend from Funding Circle and need higher amounts to fund your business ambitions, we can help. Our team can arrange finance for businesses from all sectors, including in specialist areas with unique finance requirements, such as healthcare, property development and agriculture.