Funding Circle Small-Business Loans: 2020 Review

Funding Circle offers low rates compared to its competitors. You'll need good personal credit and an established business to qualify.

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Our Take

Funding Circle - Online term loan
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on Funding Circle's website

Est. APR

12.18 - 36.00%

Min. Credit Score

660

Pros & Cons

Pros

  • Cash can be available within 3 business days.

  • Competitive rates among online lenders.

  • No minimum revenue requirement.

Cons

  • Requires business lien and personal guarantee.

Compare to Other Lenders

Funding Circle - Online term loan
OnDeck - Online term loan
SmartBiz - SBA loan
Est. APR

12.18 - 36.00%

Est. APR

9.00 - 99.00%

Est. APR

6.73 - 10.29%

Min. Credit Score

660

Min. Credit Score

600

Min. Credit Score

650

Full Review

LOOKING FOR CORONAVIRUS BENEFITS INFORMATION?

Funding Circle is a peer-to-peer business lender that acts like a matchmaker, connecting small businesses with investors that can help with financing.

Funding Circle may be a good fit for your business if you:

Are looking to expand your business or refinance costly debt: Funding Circle offers loans up to $500,000 at competitive rates. You can use the money to cover the costs of buying equipment, hiring employees or opening a new location.

Have good credit and an established business: Though the company doesn’t have a minimum annual revenue requirement, you do need to be in business for at least two years and have a minimum credit score of 660 to qualify.

Are looking for fast cash: Funding Circle’s application process is quicker and easier than the process to qualify for an SBA loan, and borrowers receive their money within three days on average.

Reasons to use Funding Circle

Low rates compared with other online lenders

It’s tough to beat the low interest rates on SBA loans, which are typically in the high single digits. But Funding Circle’s rates are relatively low among small-business lenders. Its annual percentage rates start around 12% and include a one-time origination fee of between 3.49% and 6.99%.

Funding Circle doesn’t charge a prepayment penalty, and paying off your loan early can save interest costs.

Faster processing than banks and the SBA

It can take just 10 minutes to apply for a Funding Circle loan, and you could receive funds within three days. Compare that with the months it sometimes takes to be approved for an SBA loan, which entails a review process that many small-business owners find intimidating and frustratingly slow.

Where Funding Circle falls short

Not for new businesses

Funding Circle is not for startups or small businesses with anemic revenue or a fuzzy growth trajectory. Funding Circle requires at least two years of business history, while its borrowers typically have been in business for about 11 years and have annual revenue of $1.6 million and 12 employees.

High qualification standards

Funding Circle does not have a minimum annual revenue requirement, but other criteria are stricter than competitors’.

You need a personal credit score of at least 660 to qualify for a Funding Circle loan. Some online lenders accept 600 or lower. The company says the average credit score of its funded borrowers is 700.

Funding Circle also requires a lien on your business assets, which may include equipment, vehicles or inventory. Like most other business lenders, it also requires a personal guarantee from the primary business owners, which gives the lender the right to pursue your personal assets if your business fails to repay the loan.

Fast, but not the fastest, option

Although getting a loan from Funding Circle is faster than from a traditional bank, there are other online lenders, including Kabbage and OnDeck, with even faster funding times.

Compare business loans

If you’d like to compare loan options, NerdWallet has a list of small-business loans that are best for business owners. All of our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.

Frequently asked questions