Funding Circle Review


Funding Circle is a peer-to-peer (P2P) lending platform that provides business loans to established companies. It does this by recruiting investors who want to put their money into UK businesses and then accepting loan applications from suitable companies.

This splits Funding Circle’s services into two distinct sections.

Business loans
Businesses can apply for loans with competitive rates from a company that specialises in connecting companies with investors. The aim is to provide UK businesses with a cheaper alternative to seeking funding from banks who are traditionally reluctant to lend to small businesses.

P2P investments
Funding Circle allows investors to sign up and put their funds into its P2P lending platform, giving them the chance to invest in growing UK business. Lenders will typically earn an estimated 5.5%-6.5% per year on their investment and ISA account holders receive interest tax-free.


How it works

Funding Circle is a highly-rated UK business lender offering medium-term instalment loans. Term lengths range from six months to five years and the company has a strong reputation for competitive rates and few additional fees.

Funding Circle Review funcing cirucle how it works

Unlike traditional lenders, Funding Circle is a P2P lending platform that allows investors to sign up and fund loans to credible businesses. As a result, the company’s borrower requirements are more strict than many lenders but the businesses accepted can enjoy lower rates than they’ll probably find elsewhere.

Funding Circle’s application process also takes a little longer than other business lenders but you should still have your funds within a matter of days.

Borrower Requirements

As mentioned already, Funding Circle’s borrower requirements are more strict than many lenders because the company also needs to look after the investors signed up to its platform. Each application is independently reviewed but you’ll need to meet the following criteria to be considered:

  • A minimum of 2 years’ trading history
  • At least 1 year of filed or formally prepared accounts
  • No County Court Judgements (CCJs) registered in the last 12 months
  • No outstanding CCJs larger than £1000 in the last year
  • UK ownership and resident directors (the majority of whom are UK residents)

While the company doesn’t specify a minimum annual turnover, it seems businesses earning a minimum of £50,000 per year stand the best chance of being accepted.

Your credit score will also be taken into consideration and here’s what Funding Circle has to say about this process:

“Our proprietary credit model uses thousands of data points to assess the creditworthiness of every business that applies. It uses publicly available information, credit bureau data and our own historical data of loan applications and performance… Successful applications are then given a risk band from A+ to E, which is then used to help determine the interest rate they’ll pay.”

Finally, Funding Circle’s global credit assessment team manually assesses each application to determine the terms of each loan and the amount of interest that will be paid before anything is approved.
It’s a stringent process and it takes a little longer to complete than many other lenders but it helps ensure businesses are only taking loans they can afford and lenders’ money is going to businesses they can trust.

Terms & Fees

If you’re accepted for a loan from Funding Circle, the fees you’ll end up paying will depend on the amount you’re borrowing, the term length of your loan and the creditworthiness of your business. This should give you an idea of what you might be looking at:

Because Funding Circle provides instalment loans, you can reduce your expenses by paying off your loan early and there are are no prepayment penalty fees to worry about. Aside from the fees listed above, the only potential additional fees you might have to consider are for late payments or having insufficient funds in your account.

Application Process

To apply for a business loan, you can head to Funding Circle’s website and check if you qualify by filling out a quick form. 

It shouldn’t take more than 3 seconds to find out if you’re eligible and – if you qualify for a loan from Funding Circle – the remaining application process should only take you about 10 minutes.

If your application is approved, you should get a personalised quote within 24 hours. Then, all you need to do is decide whether to accept the conditions of your loan and the funds should be in your account within a few business days.

Funding Circle Review funding circle application process

Funding Circle Verdict: 4/5

If you’re looking for a business loan to boost growth, Funding Circle provides a genuine alternative to seeking out funds from your bank, which typically works out as the more expensive and time-consuming option. Funding Circle isn’t the quickest place to secure business funds but it’s still significantly faster than banks and the company does everything it can to protect its investors and recipient businesses.

The only major downside is Funding Circle will decline businesses that don’t meet its stringent requirements.

For lenders, Funding Circle is a place to quickly and conveniently get a better return on your investment than currently being offered by the banks. You’re not going to make a huge amount of money with its relatively low-risk investments but you can at least make your money work for you a little more.