New business types coming to the Funding Circle marketplace

Over the coming week you’ll see loan requests for new types of businesses listed on the marketplace which will be available for you to lend to. Previously, only limited companies and limited liability partnerships (LLPs) have been able to apply for a business loan through Funding Circle but from this week, you’ll be able to start lending to non-limited companies, in the form of sole traders and partnerships, too.

Why are we doing this?

More than 70% of all businesses in the UK are non-limited, including some partnerships and sole proprietors. By expanding the types of businesses we lend to, we can help support even more enterprises across the UK while offering a greater variety of lending opportunities for investors.

What’s the difference between limited and non-limited companies?

There are two key differences between limited and non-limited companies. Firstly, owners of limited companies are not liable for the debts owed by the business; their personal liability is limited. The owner of a non-limited company on the other hand is liable and has a personal obligation to repay any debts; their personal liability is unlimited. The second key difference is that a limited company is required to file their accounts and key documents at Companies House whereas non-limited companies do not. You can read more about these types of businesses in our help centre.

Who are non-limited companies?

Non-limited companies include professionals such as barristers, doctors and veterinary practitioners as well other business types such as farms. They can look like a limited company, for example by having many employees but may have been formed as a non-limited company many years ago and have evolved since then.

Will there be any other differences between the businesses I’ll lend to?

Non-limited companies must pass very similar qualification criteria to limited companies, in that they are required to have maintained a good credit history, have at least 2 years of accounts & trading history, have no county court judgements (CCJs) over £250 and pass Funding Circle’s full credit assessment. The non-limited companies will be put into the same A+ to C- risk bands as limited companies according to their level of risk and level of expected bad debt.

Non-limited companies will be able to borrow from £25k (vs £5k for limited companies) due to regulatory differences.

How will this affect my lending?

If you’re an Autobid user, there’s nothing you need to do to lend to these businesses via Funding Circle. Your Autobid will automatically include all types of businesses when bidding and buying loan parts.

If you place bids manually, you’ll be able to see the company type on the individual loan request page.

We’re excited to help more small businesses, the backbone of the British economy, with access to finance and we’d love to hear your thoughts on this. You can join the discussion on our community forum.

News

Jack Pritchett

Senior Communications Manager