What you need to know about borrowing at Funding Circle

If you’re thinking of taking out a business loan through Funding Circle, cast your eyes over this first to make sure you have all of the information you need. These details are available on our website but we thought you might find this guide useful.

Who can apply for a loan?

Our aim is to help established and creditworthy businesses with access to finance. Limited companies, limited liability partnerships (LLPs) and non-limited companies that have been trading for at least 2 years  can apply. 

What do we look for when we make our decisions?

You’ll need to submit an online application which can take as little 10 minutes to complete. We will also require you to email your most recent filed or formally prepared accounts, your last 3 months of business bank statements and up-to-date management accounts. When making their decisions, the credit assessment team use in-house models which capture the information you provide to us as well as information from credit bureaus (for example, Creditsafe) including your past and current credit score.

Types of loans we offer

We offer business loans from £10,000 to £1,000,000, over a 6 month, 1, 2, 3, 4 or 5 year loan term. Loans have a fixed rate and a fixed monthly payment. The level of security required depends on the loan value and the purpose of the loan. Most loans require a personal guarantee, a security over a specific asset, or security over all of the assets in the business.

Loans from £10,000-£500,000 are generally unsecured. This means they don’t require business assets as a security. However, a personal guarantee will be required from director(s) in almost all circumstances. These are highly flexible and can be used for a wide range of purposes, including working capital, expansion capital, asset purchase and more.

Loans from £500,000 – £1,000,000 are generally secured. This could be an all asset security, where we take a charge over all assets in the business (sometimes as a second charge), or a specific asset security.

 

 

Please note that a personal guarantee from the director(s) may be required in any of the circumstances above.

Who’s lending to me?

Funding Circle has a broad community of investors, including over 85,000 people, local councils and financial institutions, all looking to lend to small businesses. When your loan is approved, it could be funded by lots of individuals all lending small amounts, or by one organisation. We’ll handle everything for you so you never need to speak to them directly, but you’ll have the knowledge that there’s a community of thousands backing your business.

What’s the interest rate?

If your application is successful we’ll give you a fixed interest rate as part of your offer. Your interest rate will depend on our credit assessment and the term of your loan. Typically the longer you want to borrow for the higher the interest rate, but the lower the monthly payments. 

What fees do we charge?

You will pay a one-off completion fee when you take out your loan. If you are not happy with your offer that’s absolutely fine; you are not obliged to accept the loan offer and no fee is charged.

How are the repayments structured?

Repayments are made in equal monthly instalments over your chosen time period. We will need you to set up a direct debit to ensure payments come in on time for the investors who lent to you. If you want to pay off your loan early, there are no fees for full early repayment. All we ask is that you pay the outstanding capital and interest that is due for the month of repayment.

Can I apply for a multiple loans?

Applying for a second loan is easy. Simply login online and complete the short form, or contact or team. To apply for another loan, you’ll typically need to have made between 3 – 6 repayments on your existing loan, although each application is treated on a case by case basis. You can also consolidate your existing loan at the same time. 

If you’re interested in taking out a business loan at Funding Circle, you can have a look at the website for more details, or you can start the application here.

If you are unsure about any of the above or would like to discuss your options, our team are more than happy to help. You can give them a call on 0800 048 2467 and press option 2 for the business team.

 

Case Study: Kennedy’s Restaurant


The team behind Kennedy’s Restaurant were looking to open up a new branch in Whitecross street in London. After their bank wouldn’t entertain the idea of financing a fish and chips shop, even an upmarket one, they came to Funding Circle to get the £100k small business loan they needed to transform a rather rundown shop into the upmarket experience they like to associate with the Kennedy’s brand. The new restaurant now employs 15 staff members and we have it on good authority that lunchtimes are manically busy, particularly on a Friday when people queue out the door to get their hand on a quality Kennedy’s fish and chips dish or a freshly baked pie.
The owners are keen to grow even further and are considering a variety of models to expand on their success, making Kennedy’s another example of a great British business growing in tough times and doing its bit to employ people and get the economy moving.
If you are interested in a business loan from Funding Circle, you can find out more on the Funding Circle website