Funding Circle Review 2021: A Marketplace for Established Businesses

You can get a great deal on financing through Funding Circle’s lending marketplace―if you meet the stiff borrower requirements.
Best for P2P Lending
Funding Circle
Funding Circle
3.8 out of 5 stars
3.8
  • Check
    Very low starting rates
  • Check
    Several types of financing
  • X
    High borrower requirements
  • X
    Slow funding times

In a perfect world, you’d get affordable business financing, and you wouldn’t have to wait around forever to get it. But online lenders (aka alternative lenders) often have high, expensive rates, and traditional banks have long wait times and too few financing choices.

That’s where Funding Circle comes in to split the difference. It offers many of the advantages of a traditional lender―like low starting costs on term loans―along with the advantages of an online lender―like faster approval times and more loan choices.

Interested? Then let’s talk about what kinds of businesses can use Funding Circle, what types of financing you can get, and what else you need to know before you apply.

Funding Circle is best for established businesses that want to compare options

Funding Circle operates as a marketplace lender, much like Lendio and Fundera by Nerdwallet

That means that when you apply to Funding Circle, you can get considered for multiple types of financing―like a term loan, a line of credit, and a merchant cash advance. A loan specialist will help you understand what you qualify for and decide what type of business loan (or other kind of funding) best meets your needs.

So as with any marketplace, Funding Circle can help you find the best deals on working capital for your business.

But unlike fellow marketplaces Lendio and Fundera by Nerdwallet, Funding Circle has pretty high standards for its borrowers.

Funding Circle doesn’t work with young startups, for example―your business needs to be at least two years old.  And while you don’t need a perfect personal credit score to work with Funding Circle, you do need a FICO credit score at the higher end of the “fair” range. Plus, as you can see, your business needs to be established enough to bring in a healthy amount of annual revenue.

Minimum borrower requirements for Funding Circle

Min. credit score
Min. revenue
Min. time in business
Learn more
660$500,000/yr.2 yrs.

(For comparison, Lendio has products for small-business owners with bad credit, young startups, and other borrowers Funding Circle doesn’t cater to.)

That actually makes Funding Circle’s business loan requirements pretty comparable to what you’d see from a traditional bank. In other words, they’re strict. 

But as with a bank, Funding Circle offers low starting interest rates (on some products), meaning you can get a way better deal than you would with most online lenders. And Funding Circle offers financing products that most banks don’t, like merchant cash advances and invoice financing.

So put simply, if you’re a small-business owner with a decent credit score and an established business, Funding Circle’s marketplace offers an easy way to compare financing options and get a good deal on a loan.

Does that sound like you? Then let’s discuss what Funding Circle has to offer your small business. (If it doesn’t sound like you, you may want to check out our list of the best small-business loans for startups instead.)

Strengths
Pro Bullet Very low starting interest rates
Pro Bullet Six types of business financing
Pro Bullet Long repayment terms (on some products)
Weaknesses
Con Bullet High borrower requirements
Con Bullet Slow funding times

Funding Circle financing options

As we already pointed out, Funding Circle offers several different types of business funding―six, in fact. 

So while you can definitely apply for a classic term loan, you can also get different financing depending on your needs―like a merchant cash advance for fast, short-term capital or a line of credit for revolving, long-term use. 

Funding Circle business financing

Product
Min./max. loan amount
Lowest listed rate
Repayment term
Learn more
Term loan$25,000/$500,0004.99% interest6 mos.–36 mos.
SBA 7(a) loan$20,000/$5 millionPrime + 2.75% (currently 6% interest)10 yrs.
Invoice factoringUp to $5 million0.25%/wk.N/A
Line of credit$6,000/$100,00010.99% APRN/A
Merchant cash advance$5,000/$400,0001.15 factor rate3–18 mos.
Working capital$25,000/$400,0001.15 factor rate6–18 mos.

Data effective 6/21/2021. At publishing time, pricing is current but subject to change. Offers may not be available in all areas.

Let’s take a closer look at each funding product.

Term loan

Funding Circle has offered term loans from the beginning. And while some details have changed a bit, one hasn’t: the classic Funding Circle loan still has a killer low starting rate under 5%. That’s on par with the interest rate you’d get from a traditional bank.

Like any term loan, a Funding Circle loan offers plenty of flexibility so you can use your working capital as needed. You can get very small loans or much larger loans, and you can get repayment terms of just a few months or of a whole decade. Funding Circle also offers weekly, bi-weekly, and monthly repayment schedules.

Between the flexibility and low starting rates, Funding Circle’s term loan is a standout product. Just note that you’ll need to secure your Funding Circle business loan with some type of collateral. Bear in mind that Funding Circle’s term loans aren’t available in Nevada. Term loans also require a FICO score of at least 660 (up from the previously required score of 650).

SBA 7(a) loan

If you prefer your term loans to come backed by the US Small Business Administration (SBA), Funding Circle also has SBA 7(a) loans. You can use these SBA loans for all sorts of working capital needs, from inventory to equipment to refinancing existing debt.

While Funding Circle’s SBA 7(a) loans have a higher starting rate than its other term loans, you should keep in mind that the SBA puts a cap on 7(a) interest rates. So depending on your qualifications, an SBA loan may end up being the cheaper option. 

Plus, all SBA 7(a) loans come with a 10-year repayment term, meaning you can get plenty of cash while still keeping your monthly payment relatively low.

Invoice factoring

If your business invoices customers, you may like Funding Circle’s invoice factoring. As a type of invoice financing, factoring lets you get working capital by submitting unpaid invoices as collateral. Funding Circle lets you get between 85% and 90% of your invoices’ value upfront. You get the rest (with weekly fees subtracted) when your customers pay.

Invoice factoring can be a helpful way for B2B businesses to get funding, but take note that it tends to be more expensive than traditional loans. And remember, if your customers don’t pay their invoices, you’re on the hook for repaying your working capital.

Line of credit

For working capital you can use over and over again, Funding Circle has a business line of credit. Like a credit card, a line of credit gives you a credit limit. You borrow against that limit, repay what you borrow, and get to use those available funds again.

Rates on Funding Circle’s lines of credit start higher than you’d find at a bank, but quite a bit lower than we’ve seen from most online lenders. So while it might not be the best deal we’ve seen, a Funding Circle line of credit isn’t half bad either.

Best Small-Business Loans
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4 out of 5 stars
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Fundera by NerdWallet
Best for SBA microloans
3.9 out of 5 stars
3.9
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Best for established businesses
3.8 out of 5 stars
3.8
BlueVine
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Learn more about our top brands.

Merchant cash advance

Businesses that process lots of credit card transactions can qualify for a merchant cash advance (MCA). An MCA gives you money in advance, which you automatically repay with a set percentage of your daily credit card and debit card sales.

But merchant cash advances are expensive and confusing, so we don’t recommend them for most businesses. If you have to get one, though, Funding Circle does have lower starting factor rates than some other cash advance companies we’ve reviewed.

Working capital

Finally, Funding Circle has working capital loans, or short-term loans with a daily or weekly repayment schedule. 

Like merchant cash advances, working capital loans tend to be on the expensive side. So while they can be useful if you need some cash flow to take advantage of a time-limited opportunity, we recommend sticking to term loans or lines of credit for most of your financing needs.

Grow your business today

Browse hundreds of loan options, custom-tailored to your business and budget needs, from a single, simple platform.

Applying for Funding Circle financing

Now that we’ve shown you all your Funding Circle financing options, let’s talk about how you can actually apply for and (hopefully) get them.

The process starts with a short online application. Funding Circle says the application should take just six minutes to complete―but that’s just for the initial application. You’ll have to submit more paperwork and documents later (think bank statements, personal and business tax returns, and so on), and that will take way more than six minutes.

Once your initial application is in, a Funding Circle account manager will get in touch. Your account manager may ask for more details about you and your business. When they’ve got enough information, they’ll show you your financing options. Then they’ll help you pick the right loan for your business and finalize your loan application.

Funding Circle says you can get an answer to your application in as little as 24 hours, though that’s not a guarantee; it could take a day or two longer. (Or weeks longer, in the case of SBA loans.) And after you’re approved, expect it to take another several days to actually get your money.

Altogether, the process could take a few days or a few weeks, depending on the type of financing you want. Overall, that makes Funding Circle faster than many traditional banks―but way slower than online lenders that offer same-day funding (like Kabbage).

Funding Circle customer reviews

As we’ve told you, we think there’s a lot to like about Funding Circle―like easy comparison shopping and low starting rates. But do customers think Funding Circle lives up to its potential?

Largely, yes. Funding Circle has pretty positive customer reviews, earning a 3.89 out of 5 on its Better Business Bureau profile and a 4.5 out of 5 TrustScore on Trustpilot.1, 2

Positive Funding Circle reviews praise its excellent customer service and speedy application process. Some reviewers also mentioned that Funding Circle offered them very affordable financing. And best of all, we saw quite a few business owners who said they were using Funding Circle for the second or even third time. That means people don’t just like Funding Circle’s application process―they like its whole operation.

Not everyone loves Funding Circle, though. A lot of recent negative Funding Circle reviews complained about its handling of PPP loans (and to be fair, we’ve seen similar complaints about pretty much every lender). But other would-be borrowers complained that they got rejected despite having high qualifications, or that they were offered surprisingly high rates.

So overall, customers like Funding Circle. Just don’t expect guaranteed approval or a rock-bottom rate―even if you’re generally well qualified.

Don’t qualify for a business loan? Get a personal loan instead.

Funding Circle FAQ

Is Funding Circle a legitimate lender?

Yes, Funding Circle is perfectly legitimate.

Is Funding Circle SBA approved?

Yes, Funding Circle is approved to offer SBA loans. It offered PPP loans (loans through the Payment Protection Program) for a while, but now it offers just SBA 7(a) loans.

Is Funding Circle a P2P lending platform?

Funding Circle is technically a direct lender, not a peer lending company. It originates and services its own loans rather than relying on investors to fund them. It does sometimes sell its loans to investors, though.

Overall, though, we think it’s best to think of Funding Circle as a lending marketplace, as it offers a variety of loan options and works with different lending partners to offer its financing products.

The takeaway

As a lending marketplace, Funding Circle makes it easy to comparison shop for the best deals on business financing―though it has much stricter borrower requirements than other funding marketplaces out there. 

With that in mind, more established businesses will like Funding Circle’s low starting rates, many financing choices, and positive customer reviews. But if you need funding ASAP or have a young startup, you’ll want to look at other lenders instead.

Curious how Funding Circle’s lending platform compares to other lenders? See how it ranks on our list of the best small-business loans.

Related content

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Sources

  1. Better Business Bureau, “Funding Circle USA, Inc.” Accessed June 21, 2021.
  2. Trustpilot, “Funding Circle,” Accessed June 21, 2021.
Chloe Goodshore
Written by
Chloe Goodshore
Chloe covers business financing and loans for Business.org. She has worked with many small businesses over the past 10 years, from video game stores to law firms. Those years watching frustrated business owners try to sift through their many options gave her a passion for breaking down complex business topics. She wants to help business owners spend less time agonizing over their businesses so they can spend more time running them.
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