Accepting the loan

1. How do I accept the loan?

Once your loan request is fully funded, an “Accept” button will appear in the My Account section of the website. When you click on the Accept button you will be shown the loan contract. You should read through this carefully. If you decide to accept the loan, funds will be moved from each of the Funding Circle investor accounts to your Funding Circle borrower account.

2. How do I withdraw my funds?

Once you have accepted the loan contract, you will be able to withdraw funds to your external bank account.

Once you have inputted your bank details, funds in your Funding Circle borrower account will be transferred to your external bank account, and will reach your account within 3-5 working days.

3. How long do I have to accept?

You will have five days from the end of the auction period to accept the aggregated loan request offer. If you do not accept the aggregated loan request offer within this period your loan request will be cancelled, and any funds bid will be released to investors.

4. Can I end an auction early and accept the loan?

Yes. As soon as a loan request is fully funded you can accept it at any time in the My Account section of the Funding Circle website. Alternatively, you can wait until the auction period expires to see if other investors bid at lower interest rates and reduce the overall rate of the loan.

Repaying the loan

1. How are the loan repayments calculated?

Loan repayments are calculated using the same formulas used by banks and other financial institutions, with the interest rate being applied as an Annual Equivalent Rate (AER) and not as a flat rate (if the interest rate were applied as a flat rate this would substantially increase your cost of finance).

Your monthly repayments will always be equal, and will consist of interest payments and repayments of the outstanding principal of the loan. Each month the interest portion of the payment goes down and the principal portion goes up.

The full repayment schedule for your loan can be seen at anytime in the My Account section of the website, or in the Loan Contract.

2. How does my business make loan repayments?

The monthly repayments payable to each investor on each loan part in respect of the loans you borrow will be set out in the Loan Contract or Loan Contracts.

We will collect the repayment amounts each month from your bank or building society account using direct debit or debit card repayments, using credit card repayments or via a standing order. We will charge a fee for each repayment made using a credit card. We will collect the repayment amount due up to 5 days before the date specified in the Loan Contract in order to ensure that funds are received and distributed to investors. 

It is your responsibility to make sure that your business bank account has sufficient funds to make the repayments.

3. When will my monthly loan repayments begin?

 Your monthly loan repayments will start to be collected from your account up to 5 days before the date set out in the Loan Contract.

4. Can my business choose the monthly repayment date for the loan?

The monthly repayment date set out in the loan contract is the earlier of the date you accept the loan plus one month (if you accept the loan early) or the auction expiry date plus one month (if you accept the loan on or after the auction expiry date).

5. Can I change the monthly repayment date for the loan?

There is significant administration involved in contacting investors to change the repayment date for a loan, however, if you are experiencing ongoing problems in repaying your loan on a certain date please contact us and we will attempt to get this changed on your behalf.

6. Can my business make one-off payments to pay down my loan?

You cannot partially pay down a loan. You can repay a loan early in full at any time.

7. How do I change repayment details for my business?

 If you wish to change the details for your repayments please contact us here .

8. What happens if I'm late or think I will be late paying a monthly instalment?

If at any time you believe that you may not be able to make one or more repayments under a Loan Contract, please contact us immediately. If you miss a payment or only partially pay the amount due, we (ourselves or through an agent acting on our behalf) will contact you and ask you to explain why and will attempt to recollect the payment the working day after the payment was due. If our reattempt to collect the funds fails, 3 days after the payment was due your account will be treated as an overdue account, you will be charged a fee of £12.50 and we will continue to attempt to collect the funds. We may refer the missed payment to a collections agency (the "Collections Agency"), who will attempt to collect the money on the investors' behalf.

If payment has still not been made 10 days from the date payment was due, the Collections Agency may charge you administration fees equal to 15% of the missed payment amount for their work in collecting amounts outstanding which would be in addition to the loan sums due. This fee is payable immediately. They may also charge other fees to cover tracing charges, field agents' costs and litigation costs and expenses.

If you miss, fail to pay or only partially pay, three or more consecutive monthly instalments or four out of six monthly instalments in a six month period, the loan will be placed into default and we will issue you with a default notice and termination notice and will pursue you for the total loan amount outstanding. We will try to give you 28 days notice before filing a default on your credit reference file although we may not always be able to do so. Please see our Privacy Policy for more details on how we disclose information about you

If the Collections Agency is still unable to collect the debt, investors will novate their debt to Funding Circle Recoveries Limited which may sell the debt to a debt purchaser or pursue you for the outstanding amounts through the courts. If such further action is necessary, it is likely that significant costs will be incurred which will be passed on to you as the defaulting borrower.

In circumstances where the relevant loan or loans are secured, if you are unable to make repayments under a Loan Contract and amounts remain outstanding when due or you default in meeting any material obligations of a loan, Funding Circle may instruct FCRL (as security holder on behalf of the investors) to enforce the security constituted by the all assets security agreement.

In circumstances where the relevant loan or loans are large asset finance loans, FCAF may (or its authorised representatives may), without notice and at your expense, retake possession of the business asset or assets and for this purpose may enter any property, site or premises at which the assets are located as detailed under the underlying conditional sale or lease agreement.

9. Does Funding Circle offer payment protection insurance?

Funding Circle does not offer payment protection insurance to borrowers.

10. Do you feedback information to the credit bureaus?

 Details of any information submitted and provided to credit bureaus can be seen in the Funding Circle Privacy Policy here .

11. How do I close my account?

 If you have fully paid off your loan, you can close your account at any time. Simply contact us through the Funding Circle website here .

Auction period

1. Can I edit my loan request page once it is posted?

Once your loan request page is posted you cannot change details unless you withdraw the request or accept or decline the loan offer. You can make your business name anonymous at any time by contacting us. After an auction is completed your business will automatically be made anonymous. If you have posted personal details on your loan request page and you contact us we will update these details as soon as practicable.

2. How can I answer questions from investors?

You can answer questions from investors in the My Account section of the website. We will send you an email when an investor asks you a question. You should aim to answer questions from investors promptly to get your loan request funded quickly.

3. Can I cancel my loan request?

You can cancel your loan request at any time in the My Account section of the Funding Circle website.

4. What happens if my loan does not become fully funded?

A loan needs to become fully funded to be distributed to borrowers; unfortunately borrowers cannot receive partially funded loan requests.

If a loan does not become fully funded by the expiry date, Funding Circle may choose to extend the auction. If the loan is still not fully funded, or the auction is not extended, all bid funds will be re-released to investors and no funds will be disbursed to your business.

Don’t worry if your loan is not fully funded close to the auction expiry date, many investors may prefer to bid close to the end of auctions.

Applying for a loan

1. How will Funding Circle verify the identity of my business?

Funding Circle verifies the identity of your business by cross-checking director details against data from Experian. This check does not affect the credit score of the business or the director.

2. Does a company director have to apply for the loan?

The majority of the information in a loan application can be filled in by any employee in the company, however, in order to formally submit the application a director will need to be present to answer verification questions.

3. How long does it take for Funding Circle to review a loan application?

It can take up to 2 working days for Funding Circle underwriters to review your application to borrow. Funding Circle underwriters will be in touch directly with you if they have any further questions about your loan application.

4. What information do I have to provide to Funding Circle?

The Funding Circle application process clearly shows you what information is required to complete the application. The main pieces of information required are:

• Company details
• Income statement and Balance Sheet for the last financial year
• Names of shareholders with 20%+ shareholding in the Company
• Details of current outstanding loans and overdrafts
• A Director or owner to submit the application

Funding Circle underwriters may require additional information from you including management accounts, your latest bank statement or your most recent tax return. If these are required, Funding Circle underwriters will contact you directly.

If you are purchasing a large asset (>£75k) we will require further information on the specific asset which can be seen on the financials step in the application form. If the loan is over £100k an all asset security agreement may be required - in these circumstances we will require further information on the current major assets in the business.

To see what information is displayed to investors please see here .

5. Can I change the amount I want to borrow after applying?

Once you have applied for a loan you cannot change the amount you want to borrow. Funding Circle’s credit assessment decision is dependent on the loan amount requested. Funding Circle underwriters may deem that you can borrow a lower amount than that requested. If this is the case, an underwriter will contact you directly.

6. How is the risk band of my business determined?

The risk band your business is placed in will depend on your credit score information, which Funding Circle sources from Experian. The risk bands range from A+ being very low risk, to C being average risk. You will be notified of your risk band once your application has been processed.

Loan request page

1. How should I set my target interest rate?

The minimum target rate you can request is determined by the risk band you are allocated. The current minimum target rates you can set are:

• A+     6%
• A       7%
• B       8%
• C       9%

The rate you actually pay is always determined by investor auctions, so that you get the lowest rate possible, which means you may end up being offered a rate higher or lower than your target rate.

You set your target rate before you post your loan request page.

You are under no obligation to accept a loan offer made on the Funding Circle platform.

Please note that these rates are annual interest rates, and are different to flat rates which other providers may quote – please see the Cost of Borrowing page for more details.

2. What information will be available to investors?

You can see a summary of the information that can be seen by investors on any loan request page here .

The following information on your business will be shared with investors before a loan is accepted:

• Your business name if you choose to disclose it
• The type of business e.g. limited company, limited liability partnership, sole trader or small partnership
• Amount you are borrowing
• Target borrowing rate
• Risk band
• Whether a loan has a personal guarantee or not
• Business credit score over time and vs. other companies of the same size, in the same sector, and of the same age
• Recent financial performance of the business including an income statement and balance sheet from the last calendar year, and other financial ratios
• Any descriptive information you write on your business
• Any voice message you record on your business
• If the loan is to purchase an asset for >£75k an estimated valuation certificate from a third party will be disclosed to investors
• If the loan is greater than £100k and an all asset security agreement is required, a list of the major assets in the business will be disclosed to investors

The following information on your business will not be shared with investors at any time, unless you yourself choose to disclose this information:

• The name and identity of your business
• The names or details of directors of the business
• The names or ownership percentages of shareholders of the business
• The address or contact details of directors of the business
• The names of existing providers of finance to your business