Funding Circle vs. LendingClub

Funding Circle and LendingClub are both good lenders―but your borrower qualifications can help you choose between them.
Best for established businesses
  • Icon Pros  Dark
    Starting at 4.99% interest
  • Icon Pros  Dark
    Lending marketplace
  • Icon Pros  Dark
    Lines of credit, term loans, & more
  • Icon Cons  Dark
    660 credit score required
Best for young businesses
  • Icon Pros  Dark
    Starting at 5.99% interest
  • Icon Pros  Dark
    Direct lender (through partner)
  • Icon Pros  Dark
    Term loans
  • Icon Pros  Dark
    Low credit score accepted

So you need a small-business loan (or some other type of business financing), and you’re not sure whether you should get that loan from Funding Circle or LendingClub. After all, they’re both well-liked online lending platforms that brag about how they can help small-business owners. How are you supposed to choose between them?

No problem―we’re here to help you figure that out. In this article, we’ll tell you how Funding Circle and LendingClub compare by looking at things like financing options, loan rates, borrower requirements, and more.

By the end, you’ll see how different Funding Circle and LendingClub really are―which can help make your lending decision much easier.

Funding Circle and LendingClub 101

Before we get into how Funding Circle and LendingClub actually compare, let’s get on the same page about how each of these lending platforms works―because it might be a little more complicated than you think.

(If you already know all about marketplace lending and P2P lending, you can skip this bit. But if you don’t, these details will give some context for how Funding Circle and LendingClub stack up.) 

Funding Circle

Funding Circle operates as a marketplace lender.

That means that (unlike many other online lenders) Funding Circle isn’t doing all its own lending. Instead, Funding Circle works with lending partners to offer a wide variety of financing options, from traditional term loans to merchant cash advances.

So when you submit a loan application on Funding Circle’s lending platform, it takes your application and shops around to find different loan offers for you. With any luck, you’ll end up with a few options to choose from.

In other words, Funding Circle offers a convenient way to get considered for several loans from several lenders―without having to apply for each one individually. That kind of marketplace lending can help you feel sure you’re getting a good deal (without making you do all the work of shopping around yourself).

LendingClub

LendingClub used to be a peer lending site―but these days it offers business loans through partner Accion Opportunity Fund.

If you’ve heard anything about LendingClub in the past few years, you likely heard about its peer-to-peer lending model (aka P2P lending). As a P2P lending site, LendingClub would essentially match would-be borrowers with investors. So rather than having a lending company extend your loan, one or more private investors would do so. But thanks to the P2P lending platform, the experience would feel just as seamless as getting a loan from any direct online lender.

Things have changed, though. LendingClub stopped offering P2P loans for business a while ago (and it recently stopped its personal loan P2P lending as well).

Instead, LendingClub partners with Accion Opportunity Fund to offer business loans. (We explain this in more detail in our LendingClub review.)

So keep in mind that your LendingClub business loan will actually be approved, funded, and repaid through online lender Accion Opportunity Fund. But for convenience, we’ll still refer to LendingClub as the lender throughout this article.

How Funding Circle and LendingClub compare

Now that you understand how Funding Circle and LendingClub operate, let’s talk about how they compare when it comes to some key lending factors.

Borrower requirements

The biggest difference between Funding Circle and LendingClub comes down to their business loan requirements.

Put simply, it takes a lot to qualify for financing through Funding Circle’s lending site, while LendingClub has much more flexible requirements.

Lender
Min. time in business
Min. credit score
Min. revenue
Get funding
Funding CircleFunding Circle
2 yrs.660$500,000/yr.
LendingClubLendingClub
1 yr.N/A$50,000/yr.

Data effective 7/19/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

For Funding Circle, your business needs to be at least a couple years old and earn a half-million in yearly revenue. Plus, you as the small-business owner need to have a credit score in the high 600s. As we explain in our Funding Circle review, those are pretty strict requirements for an online lending site―comparable to what you’d see at a traditional lender (like a bank).

LendingClub (through Accion Opportunity Fund) doesn’t ask for nearly as much. Businesses as young as one year old can qualify with an annual revenue of just $50,000. Plus, LendingClub doesn’t have a minimum credit score requirement. (Accion Opportunity Fund’s whole mission is to help businesses that can’t normally qualify for business loans.)

So Funding Circle is harder to qualify for than LendingClub. But if you do qualify, Funding Circle has a big advantage.

Loan options

Funding Circle offers way more business loan options than LendingClub does.

In fact, LendingClub offers one product: a term loan. In contrast, Funding Circle offers six types of financing:

All those choices from Funding Circle give you a lot more flexibility. A LendingClub term loan maxes out at $500,000, with repayment terms of up to five years. But with Funding Circle’s many options, you can get loan amounts of up to $5 million with repayments terms of up to 10 years.

In other words, Funding Circle almost certainly has a loan product that can meet whatever needs your business has. But with LendingClub, you need to make a traditional loan work.

Fortunately, LendingClub’s term loan isn’t much more expensive than Funding Circle’s.

Loan costs

Funding Circle and LendingClub have pretty comparable starting costs, with Funding circle having a slightly lower 4.99% starting interest than LendingClub’s 5.99%.

Of course, those are just starting rates. The interest rate you actually get will depend on your borrower qualifications and (in the case of Funding Circle) the type of financing you choose. (Merchant cash advances, for example, are almost always way more expensive than term loans.)

And with either lender, you’ll need to think about fees. Funding Circle charges an origination fee on its loans, for example. LendingClub doesn’t list its fees, but you can assume there will be some kind of origination fee.

Application and funding speed

Another thing Funding Circle and LendingClub have in common? Speed―or the lack thereof.

Neither Funding Circle nor LendingClub make any promises about same-day approval or funding.

In fact, Funding Circle’s marketplace lending model means that you have to wait to be matched with loan offers, and that part of the process alone can take a couple extra days.

Likewise, LendingClub partner Accion Opportunity Fund keeps mum about typical timelines for its loans―which is a pretty good indicator that it probably takes a few days at least.

Calendar
Fast business loans

Need a business loan ASAP? Then skip Funding Circle and LendingClub and check out our rankings of the best fast and easy business loans instead.

Strengths
Pro Bullet Minimal storage costs
Pro Bullet Minimal losses on unsellable product
Pro Bullet Less upfront investment in your inventory
Weaknesses
Con Bullet Lower stock levels
Con Bullet Longer fulfillment times
Con Bullet Higher manufacturing costs

So with these key differences and similarities in mind, which of these two lending sites should you apply with?

Funding Circle: Best for established businesses

Best for established businesses
Funding Circle
Funding Circle
3.8 out of 5 stars
3.8
  • Check
    Starting at 4.99% interest
  • Check
    660 min. credit score
  • Check
    $500,000 min. annual revenue
  • Check
    2 yrs. min. time in business

If you’ve got an established business―one that’s older with plenty of revenue―and strong personal credit, then Funding Circle is the natural choice.

Mostly, that’s because of all the options Funding Circle gives you. As a marketplace  lender, Funding Circle lets you choose between many types of business financing―along with the different loan amounts, rates, and repayment terms that go with each type.

Whether you want a line of credit for flexible working capital, a term loan for a specific project, or invoice factoring to make the most of your unpaid invoices, Funding Circle can help.

And as an added bonus, Funding Circle has very low starting rates―especially on term loans, SBA loans, and lines of credit. So with the right borrower qualifications, you can end up with a great deal on your business financing.

Funding Circle loan options

Product
Min./max loan amount
Lowest listed rate
Repayment term
Get funding
Term loan$5,000/$500,0004.99% interest3 mos.–10 yrs.
SBA 7(a) loan$20,000/$500,0006% interest10 yrs.
Invoice factoringUp to $5 million0.25%/wk. feeN/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 loan$25,000/$400,0001.15 factor rate6–18 mos.

Data effective 7/19/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

But again, those borrower qualifications are key. Younger businesses and business owners with less-than-ideal credit scores probably won’t qualify for Funding Circle’s business lending. If that describes your situation, you’ll need to go with another lender (like LendingClub) until you can meet Funding Circle’s borrower requirements.

And remember, Funding Circle will take some time to match you with appropriate loan offers. Is it worth waiting to get a great deal on financing? Probably. Just set your expectations appropriately.

With that said, Funding Circle has enough going for it that we recommend choosing it over LendingClub―if you can.

LendingClub: Best for young businesses

Best for young businesses
LendingClub
LendingClub
3 out of 5 stars
3.0
  • Check
    Starting at 5.99% interest
  • Check
    No min. credit score listed
  • Check
    $50,000 min. annual revenue
  • Check
    1 yr. min. time in business

If your business’s age and revenue are a little on the low side―or maybe it’s your personal credit score―then we suggest going with LendingClub.

LendingClub loans, made through Accion Opportunity Fund, have pretty low, flexible borrower requirements. So even if you’ve got a young startup that’s still finding its feet or you have bad credit (at least for now) that would disqualify you from most lenders (including Funding Circle), you may still be able to get money through LendingClub.

And don’t worry―while LendingClub may not offer tons of loan options, the one it does offer is still pretty decent. LendingClub has low, competitive starting interest rates. And with loan amounts up to half a million dollars and repayment terms of up to five years, its financing gives you enough flexibility to be used for hiring, equipment, or just general working capital (among other things).

LendingClub loan options

Product
Min./max loan amount
Lowest listed rate
Repayment term
Get funding
Business loan$5,000/$500,0005.99% interest1–5 yrs.

Data effective 7/19/21. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

But if a traditional term loan doesn’t quite fit your business’s needs, then LendingClub may not work well for you. After all, it doesn’t offer revolving credit (like a line of credit) or long-term loans (like SBA loans).

And while LendingClub loans do have low starting rates, they’re not the lowest out there. If you can qualify for better rates elsewhere, you should do so.

Even with those caveats, LendingClub’s flexible borrower requirements and loans make it a solid lender―even if it’s not quite the best.

Grow your business today

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

Funding Circle vs. LendingClub FAQ

Is Funding Circle a lender?

Funding Circle is technically a business lending platform, not a lender―but either way, you can use it to apply for business financing. You can get several types of financing (including term loans, lines of credit, and invoice financing) through Funding Circle’s lending site.

Is Funding Circle SBA approved?

Yes, Funding Circle is an SBA-approved lending company. It currently offers SBA 7(a) loans. In the past, Funding Circle also offered PPP loans.

What’s the difference between LendingTree and LendingClub?

LendingTree and LendingClub are two different online lending sites. These days, they both use a lending marketplace model to let you shop around for different loan offers. Both sites focus on personal loans, though LendingClub also offers business loans through lending partners.

And for what it's worth, LendingClub has slightly higher customer reviews than LendingTree―a 4.8 out of 5 on Trustpilot compared to LendingTree’s 4.51, 2

The takeaway

Both Funding Circle and LendingClub offer pretty good small-business lending options with low starting interest rates.

That said, Funding Circle has slightly lower rates. And more importantly, it offers many more types of business financing as a marketplace lender. So for businesses that can meet its very strict borrower requirements, Funding Circle offers the better lending options.

For other businesses―especially startups and business owners with bad personal credit―LendingClub offers a good alternative. It may not have all the loan choices Funding Circle does, but LendingClub still has low starting rates and a decently flexible term loan. And, of course, LendingClub has much more accessible borrower requirements. 

Don’t think either Funding Circle or LendingClub is quite right for your business? See our favorite alternatives on our rankings of the best small-business loans.

Related content

Sources

  1. Trustpilot, “LendingClub.” Accessed July 23, 2021.
  2. Trustpilot, “LendingTree.” Accessed July 23, 2021.

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.

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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