Funding Circle Review 2023: A Marketplace for Established Businesses

Here’s the deal with Funding Circle: 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. But with strict borrower requirements (for an online lender) and slower funding times, Funding Circle does have its downsides.

Interested in learning more? Then let’s talk about what types of financing you can get and what else you need to know before you apply.

These days, Funding Circle offers three different types of business funding: term loans, lines of credit, and SBA business loans.

Between those three products, Funding Circle gives you plenty of financing flexibility. Because whether you want revolving credit for ongoing working capital needs or low-cost funds for a big project, Funding Circle has funding for you.

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

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).

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.

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

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.

(We’ll tell you more about the loan application process later in this review.)

As an added bonus, 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.

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.

We’ve pointed out some great things about Funding Circle. But how does it compare to other business lending companies out there?

As we’ve already told you, Funding Circle has pretty competitive rates. Sure, you may be able to find slightly lower interest rates from other lenders―but Funding Circle definitely has lower rates than lenders like OnDeck.

You may also notice that Funding Circle has more financing options than many other lenders (even though Funding Circle recently downsized its offerings). That’s part of what makes it good for shopping around.

So Funding Circle looks pretty good. But there’s one other thing we need to compare―its borrower requirements, which are one of its biggest drawbacks as a lender.

Unlike many online lenders, 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.

(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. 

One other downside? Funding Circle’s application and funding process can take longer than it would from other online lenders. So with that in mind, let’s talk about Funding Circle’s application process.

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).

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 3.64 out of 5 on its Better Business Bureau profile and a 4.6 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.

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.

We used Funding Circle’s website, direct correspondence with Funding Circle, customer reviews, and other sources to get all the details about this online lending company. We used a standardized loan scoring method to grade each of its three lending options and to compare those loan products to financing from other lenders.

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.