Funding Circle Review – Small Biz Loans for Established Businesses
- What is Funding Circle?
- How does Funding Circle work?
- How much does Funding Circle cost?
- Funding Circle features
- Who is Funding Circle best for?
- Who shouldn’t use Funding Circle?
- Pros & cons
- Funding Circle vs. competitors
- The bottom line
What is Funding Circle?
How does Funding Circle work?
How much does Funding Circle cost?
- Origination fee. This is a one-time fee that is meant to pay for the time that Funding Circle spends evaluating and originating your loan. The origination fee is based on your credit history and typically comes out of your total loan amount. You’ll only be charged an origination fee if you receive a loan from Funding Circle. The origination fee can range anywhere from 3.49% to 6.99% of your loan.
- Late payment fee. If you receive a loan, you will have a monthly payment amount to repay your loan. If you’re late making a payment, a fee will be added to your monthly payment amount. The late fee is 5% of the amount of the missed payment.
Funding Circle features
SBA 7(a) loans
Merchant cash advance
Line of credit
Who is Funding Circle best for?
- Established businesses. To be an eligible borrower, your business must already be established. Funding Circle requires that businesses have been around for at least 2 years to be matched with a lending partner.
- Seasonal businesses. Funding Circle offers products that can specifically help seasonal businesses or other businesses that have an unsteady cash flow. While there are factors such as higher fees and repayment structures to consider, options such as merchant cash advance and working capital could be just what some businesses need.
Who shouldn’t use Funding Circle?
- Startups. Unfortunately, Funding Circle is not the place to go if you’re looking to fund a startup. While it is a peer-to-peer lending platform, the eligibility requirements rule out any opportunities for startups.
- Businesses that need less than $25,000. Funding Circle has a minimum loan amount of $25,000, which rules out businesses that are looking for a smaller loan.
Pros & cons
- Funding Circle assigns borrowers a dedicated loan specialist who can help you identify the right loan option.
- There are several types of loans and loan alternatives in which to choose.
- Generally speaking, online lenders tend to offer more affordable options with fewer fees than a traditional bank loan.
- Funding Circle matches you with a lending partner instead of lending funds itself. If you’re someone who wants to build a personal relationship with your lender, it may not be for you.
- Funding Circle only provides peer-to-peer lending services for business loans and can’t be used for personal loans.
- Unfortunately, customer support seems to be a bit lacking. While you can be assigned a loan specialist to help you after you’ve filled out an application, there doesn’t seem to be much support otherwise. There is a general phone number and email address, but no live chat feature or specific contact options.
Funding Circle vs. competitors
|Company||Loan options||Type of company||Loan amounts|
|Funding Circle||Small business loans||Online, peer-to-peer||$25,000 to $500,000|
|LendingClub||Personal loans, small business loans, auto refinance||Online, peer-to-peer||$5,000 to $500,000|
|Lendio||Small business loans||Online, brick, and mortar, peer-to-peer||$500 to $5 million|
The bottom line
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