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

Business Loans & Funding

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

Updated: 14 February 2022

Thinking about taking out a business loan through Funding Circle? Have a read through our list to make sure you have all the information you need.

1. Who can apply for a business loan?

Our aim is to help established and creditworthy businesses access finance. Limited companies, limited liability partnerships (LLPs) and non-limited companies that have at least 2 years of filed or formally prepared accounts can apply. You can check if you’re eligible for a Funding Circle business loan online in just 30 seconds.

2. Types of business loans we offer

  1. Unsecured loans – up to £500,000
    These are highly flexible loans that can be used for a wide range of purposes, including working capital, expansion, buying new equipment and more. As they are unsecured, this means you do not put assets forward as security.
  2. Secured loans – up to £1 million
    These loans can be used for a wide range of purposes and can help you to borrow more for your business.

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

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

Once you’ve checked your business is eligible you will need to complete our short online application and provide the following:

  • 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. The credit assessment team will then use the information you’ve provided, as well as information from credit bureaus (for example, Experian) and other third parties to make a final decision.

4. You have a dedicated Account Manager

At Funding Circle you’ll have a dedicated Account Manager as soon as you have completed our simple application. They’ll be on hand to guide you through the process and if you have any questions you can give them a call directly. Let us worry about your loan while you focus on your business.

5. How long does the process take?

We combine the latest cutting-edge technology with years of experience in credit assessment so we can give you a decision typically in just 48 hours. If your application is approved your funds will be in your account in as little as 5 days.

6. What interest rate will your business pay?

If your loan application is successful, we’ll give your loan a risk rating. The final interest rate you pay back on your loan will depend on many factors, but the risk rating and loan term are the most influential. Interest rates start at 1.9% per year.

7. What fees do we charge?

One of the best things about taking a Funding Circle loan is that there is only one fee – a completion fee that is paid only if you choose to accept the loan. There are no fees for full early repayment, so you can settle your loan early with no extra cost. You’ll only pay interest for the time you borrow, so if you pay back early, you pay less. 

The completion fee will depend on your risk rating and loan term you have requested. Use our small business loan calculator to get an estimate of what your monthly repayments could be.

8. How are the repayments structured?

So you can plan with confidence, all our loans are fixed rate. That means you’ll pay your loan back in equal monthly instalments over your chosen time period.

9. Who’s lending to me?

Once you accept and complete your loan, it is funded automatically. With more than 83,000 individuals, local councils, universities and the Government-owned British Business Bank*, there’s a broad community of investors all looking to lend to British businesses.

Loans are either funded in full by a large investor, like a local council, or by hundreds of individual investors each lending small amounts. We handle everything for you so you’ll never deal with them directly, but you’ll have the knowledge there’s a community of thousands behind you.

10. Can I apply for a second loan?

It’s even quicker to apply for another loan, as you’ve been through the process once before. You’ll typically need to have made at least 3 monthly repayments on your existing loan before applying. You can sign into your account online to check your current loan, download statements or apply for further funding.

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 us on 0800 048 8747.

*In November 2018 the British Business Bank committed up to £150m for lending to UK small businesses through Funding Circle. The transaction, under the Bank’s ENABLE Funding programme, is designed to accelerate lending to small businesses and is expected to support the growth of more than 2,000 UK firms. More information can be found on our website.

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