9 things you need to know about applying for a business loan

Thinking about taking out a business loan through Funding Circle? Cast your eyes over our list below to make sure you have all of the information you need.

1. Who can apply for a business loan?

Our aim is to help established and creditworthy businesses access finance through our marketplace.

Limited companies, limited liability partnerships (LLPs) and non-limited companies that have at least 2 years of filed or formally prepared accounts can apply. We’ll typically need to see a minimum annual turnover of £50,000 in your latest accounts. You can check if you’re eligible for a business loan online in just 30 seconds.

2. Types of business loans we offer

Unsecured loans – typically up to £250,000
These are highly flexible loans that can be used for a wide range of purposes, including working capital, expansion capital, asset purchase and more.

Secured loans – typically up to £1 million
These loans can be used for a wide range of purposes and will allow you to borrow more for your business.

Asset Finance – typically up to £1 million
If you’re thinking about purchasing a new asset or refinancing an existing one, then this could be the best solution for you. We can also fund the VAT if required.

Property Finance – typically up to £3 million
We offer the full suite of property loans including finance for development and investment purposes, commercial mortgages and bridging finance. Please contact propertyfinance@fundingcircle.com to find out more.

A personal guarantee from the majority shareholder(s) is required for all of the above.

Birchmead Homes Property Finance School Development

Jonathan Jay, director of Birchmead Homes Limited, has borrowed more than £2 million since July 2014 to develop a former school in Gloucestershire into 19 family homes. Find out more about the development on the blog.

3. What do we look for when we make our decisions?

The credit assessment team use the information you provide, as well as information from credit bureaus (for example, Experian) and other third parties.

Once you’ve checked your business is eligible you will need to complete our short online application and provide the following, all of which can be uploaded online:

  • Most recent filed / formally prepared accounts
  • Last three months of business bank statements

We may also request management accounts, depending on the age of your most recently filed / formally prepared accounts, and other supporting documents for certain products.

4. How long does the process take?

The application form only takes 5-10 minutes to complete. Then, our Credit team will assess your application, making a decision typically within 2 working days, and the funds will be available for you to drawdown within a week.

5. What interest rate will your business pay back?

If your loan application is successful, the loan will be given a risk band. This will be one of six: A+, A, B, C, D or E. The final interest rate you pay back on your loan will depend on many factors, but the risk band is the most influential. Interest rates start at 6%.

6. What fees do we charge?

One of the best things about taking a loan through Funding Circle is that there is only one fee, and unlike other lenders, there are no early repayment fees so you can settle your loan early with no extra cost. All we ask is that you pay the outstanding capital on the loan and the interest up to, and including, the month that you repay.

The fee amount will depend on the risk band and loan term you have requested.


7. How are the repayments structured?

You’ll need to pay your loan back in equal monthly instalments over your chosen time period. (Please note the repayment structure of some property development loans may vary.)

Make sure you get your ID documents in to us to set up a direct debit as soon as you can, as your first repayment is due one calendar month after your loan request closes. This is to ensure payments are on time for the investors who have lent to you.

8. Who’s lending to me?

With more than 41,000 investors, including individuals, local councils, universities and the Government-backed British Business Bank*, the marketplace gives all types of investors, big and small, the chance to participate in your loan.

Each loan request is listed on the marketplace and is either funded in full by a large investor, like a family office, or as a partial loan, where thousands of investors can offer as little as £20 each to fund your loan.

They will have access to key financials for the business, for example the credit score and details of why you need the loan. Investors can also ask you questions about your application, and we recommend answering these as quickly and in as much detail as you can!

9. Can I apply for a second loan?

It’s easy to apply for another loan, as you’ve been through the process once before. You’ll typically need to have made at least 3 to 6 months of repayments on your existing loan before applying.

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

Have a question?

If you are unsure about any of the above or would like to discuss your options, our team are more than happy to help. Call  0207 401 9111 (and choose option 2)

*Funding Circle is supported by the British Business Bank, a development bank wholly owned by the UK Government. The British Business Bank and its subsidiaries do not offer bank accounts, take deposits or provide regulated banking services. The British Business Bank provides its financial support to smaller businesses through its delivery partners. Any decisions to provide finance to smaller businesses are made by Funding Circle not by the British Business Bank.


Rob McCorquodale


2 thoughts on “9 things you need to know about applying for a business loan

  1. My Company is Climateq Ltd and we are manufacturers of energy saving controls. and have been in busines since 2010.
    We are an SME and our turnover this year will be approximately £65k, showing an increase over last financial year in excess of 30%.
    We have developed a new unique energy saving control control which will take us into a higher technology bracket.
    We expect a high rate of growth over the next two years which will need to be financed. Currently we are self financed by the Principals, myself being a 45% majority shareholder.
    The business is based in Bournemouth and I am based in Spain where I look after the Spanish market.
    My assets are in Spain wher I have four properties.
    My question is, whilst I recognise that a personal guarantee is required, as my assets are in Spain, would this create a complication?
    We would be looking to service a loan of £45K over two years, which will be used to expand the organisation and to fund growth.
    Please advise.
    Terence Flavell

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