Top tips for introducers applying for a Funding Circle loan

 

Do you have clients in need of fast and flexible finance through Funding Circle? Cast your eye over our list of top tips below to make sure you have all of the information you need to help them grow and expand.

1. Which clients are eligible for a Funding Circle business loan?

Our aim is to help established and creditworthy businesses access finance through our marketplace. To date, 12,000 businesses across the UK have borrowed more than £1 billion directly from investors.

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 client’s latest accounts. You can check their eligibility 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 your client to borrow more for their business.

Asset Finance – typically up to £1 million

If your client’s thinking about purchasing a new asset or refinancing an existing one, then this could be the best solution. 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, including commercial mortgages and bridging loans. Please contact propertyfinance@fundingcircle.com to find out more.

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

Neil Broker

Funding Circle introducer Neil McDonagh, Director at HCF Commercial Finance, secured a £75,000 for his client Spartan Motor Factors to open a another branch of their vehicle parts shop in South Wales. Find out how Neil helped his client grow their business on the blog.

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

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

Once you’ve checked your client is eligible, which takes just 30 seconds, you will need to complete our short, 3 step, 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

If the accounts are more than 16 months old, please include the P&L and balance sheet covering the last financial year.

4. How long does the process take?

The application form takes just 10 minutes to complete. Our credit team will then assess the application, making a decision typically within 2 working days. The funds are typically available for your client to drawdown within a week.

5. What interest rate will your client pay back?

If the application is successful, the loan will be given a risk band. We currently have six risk bands including: A+, A, B, C, D and E. This will help to determine the final interest rate your client pays back on the loan. Interest rates start at 6%.

6. Fees and flexible commission

We charge a single up-front fee. The fee your client pays will depend on the term of the loan they request and the risk band they are given by our credit assessment team. There are no charges for early repayment.

We also offer a flexi fee option where you choose the commission you would like to earn, which in turn has an impact on the total fee your client pays.

Your client will pay one single fee, and only if they decide to accept the loan. The combined fee and commission must not be more than 10% for each loan.

7. How are repayments structured?

Loans are paid back in equal monthly instalments over the chosen time period. (Please note the repayment structure of some property development loans may vary.)

It’s important to finalise your client’s ID documents and help them to set up their direct debit as soon as possible, as the first repayment is due one calendar month after the loan request closes. This is to ensure payments are on time for the investors who have lent to your client.

8. Who are the investors?

With more than 46,000 investors, including individuals, local councils, financial institutions  and the Government-backed British Business Bank*, the marketplace gives all types of investors, big and small, the chance to participate in the loan.

Each loan request is listed on the marketplace and is either funded in full by a large investor, often a financial institution, or as a partial loan, where hundreds of smaller investors can offer as little as £20 each to make up the full loan amount.

9. When can your client apply for a second loan?

Once your client has made at least 3 to 6 months of repayments on their existing loan, we may be able to help further with a second loan. If you have clients who have already borrowed through Funding Circle, get in touch to see how we might be able to help them grow to the next stage.

Partner with Funding Circle

We work with hundreds of introducers including commercial finance brokers, financial advisors, corporate partners and accountants. If you haven’t yet tried Funding Circle but have clients who are looking for fast, flexible finance, why not register now to check their eligibility.

If we already work with you, we hope you found this list of top tips useful. Log back in to your account to start submitting more deals.

Have a question?

If you are unsure about any of the above or would like to discuss how we can help, our dedicated team are more than happy to help. Call 020 3667 2208 or email introducer@fundingcircle.com. You can also download our full introducer guide to Funding Circle.

 

*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