Business Bank Loans

Fed up with the high costs of business bank loans?

Funding Circle's online marketplace is a new alternative for business bank loans. Bank loans are time consuming to access, have high interest rates and have a collection of fees- some visible and some hidden. For example, banks will charge you an early repayment fee if your business does better than expected and you want to pay back the loan. Hardly fair is it? At Funding Circle there are no hidden fees.

When considering a business loan you will need to take into account the repayment schedule and the interest rates. Like most loans business bank loans will usually charge interest on the money that you company borrows. There are two ways in which this interest can be paid:

Fixed rate: Your business will pay a fixed interest rate for either the length of the loan or for a set period of time. Of course in this instance your business would not benefit from a fall in the market interest rates; but then if you agreed a rate at a time when interest rates were low, then your business may benefit from fixed rates.

If your business has agreed to a fixed rate loan and chooses to repay the loan early, it is likely that you would be charged some form of early redemption fees.

Variable rate: A variable rate fluctuates over the life of the loan. This interest rate is tied to the Bank of England Base rate and a margin is agreed above the base rate at the beginning of the loan.

At Funding Circle repayments are at a fixed monthly rate over a 1, 3, or 5 year period. However, unlike most banks, your business can repay this loan early at no extra cost.

So how does it work?

Business bank loans are typically very costly. Not only are there the interest rates to consider, but there are likely to be other administrations costs, such as arrangement fees and early repayment fees. Bank loans are time consuming to access, have high interest rates and have a collection of fees- some visible and some hidden. For example, banks will charge you an early repayment fee if your business does better than expected and you want to pay back the loan. Hardly fair is it? At Funding Circle there are no hidden fees.

Funding Circle credit assesses all business borrowers before allowing them into the marketplace. Once a business passes the underwriting process people offer small amounts to lots of different businesses to spread their risk. The lowest interest rate offers are accepted by the business thereby giving it the lowest cost of finance possible. Watch the video to find out more and get started!