Requirements for Funding Circle Business Loans

Funding Circle offers fast, flexible loans for UK SMEs. Understanding the eligibility criteria and application requirements is crucial for securing finance.

Funding Circle Business Loan Requirements

Basic Eligibility Criteria for SMEs

➔

Business Type: Typically available to Limited Companies and Limited Liability Partnerships (LLPs) registered in the UK. Sole traders may be considered under specific circumstances or schemes.

➔

Trading History: Businesses usually need a minimum trading history of 2 years to be eligible for standard Funding Circle loans.

➔

Turnover: While specific minimums can vary, businesses generally need to demonstrate a healthy annual turnover, often starting from around £50,000.

➔

Creditworthiness: Funding Circle assesses the creditworthiness of the business and its directors. A good business credit history and personal credit history for directors are important.

➔

UK Based: The business must be based and operating in the UK.

Required Documentation:

While the online application is streamlined, you'll likely need to provide:

➔

Company Details: Registered company name, number, and address.

➔

Financial Information: Typically requires the last 2 years of filed accounts and recent business bank statements (usually last 6 months).

➔

Director Details: Information about the company directors, including personal details for credit checks.

➔

Loan Purpose Details: Clear explanation of how the loan funds will be used to benefit the business.

Application Process

Funding Circle's application process is designed for speed and efficiency:

➔

Online Application: Start by completing a short online application form on the Funding Circle website, typically taking around 10 minutes.

➔

Document Submission: Upload required financial documents securely through their online portal.

➔

Credit Assessment: Funding Circle uses technology and expert underwriters to assess the application quickly.

➔

Decision and Offer: A decision is often made within 24 hours. If approved, you'll receive a clear loan offer detailing the amount, rate, fee, and repayment terms.

➔

Funding: Upon acceptance of the offer and completion of final checks, funds are typically transferred quickly, sometimes within 48 hours of application start.

Loan Terms and Conditions

Key terms associated with Funding Circle Business Loans:

➔

Interest Rates: Rates are fixed for the loan term and determined based on the business's risk profile, typically ranging from around 4.9% per annum upwards.

➔

Loan Amounts: Borrow between £10,000 and £500,000.

➔

Repayment Terms: Choose repayment periods typically from 6 months to 6 years.

➔

Fees: A one-off completion fee is usually charged upon drawdown (typically 2.5% - 6.5% of the loan amount). There are generally no fees for early repayment.

➔

Security: Loans are typically unsecured, but personal guarantees from directors may be required, especially for limited companies.

Who Is This Loan Best For?

Funding Circle Business Loans are ideal for:

Established UK SMEs:

Businesses with at least 2 years of trading history seeking finance for growth, working capital, asset purchase, or refinancing.

Learn more: Exploring financing options for SMEs

Businesses needing fast decisions:

The streamlined online process and quick decision times make it suitable for businesses needing timely access to funds.

Learn more: The importance of speed in business lending

Companies seeking alternatives to bank loans:

Funding Circle provides a viable alternative finance option for SMEs who may find traditional bank lending processes too slow or restrictive.

Learn more: Alternative finance routes for SMEs

Tips for a Successful Application

To enhance your chances of approval for a Funding Circle Business Loan:

➔

Prepare Financial Documents: Have up-to-date accounts and recent bank statements ready for submission to speed up the process.

➔

Check Business and Personal Credit: Review both your business credit report and the personal credit reports of directors, addressing any issues beforehand.

➔

Clearly State Loan Purpose: Be specific about how the funds will be used and how this will benefit the business's performance or growth.

➔

Demonstrate Repayment Ability: Ensure your financial projections clearly show the business's capacity to meet the loan repayments.