Is Funding Circle Legitimate? Unveiling the Truth Behind the Peer-to-Peer Lending Platform

Is funding circle legitimate? That’s a question that has been bothering many potential investors who are looking for a safe and reliable platform to park their money in. With the rise of peer-to-peer lending platforms, it’s no wonder people are cautious about choosing the right platform to invest in. However, one name that has been creating quite a stir in the investment world is Funding Circle. Many investors claim that it’s a sure-shot way to park your money and earn substantial returns. But how do you know for sure that it’s legitimate?

Well, for starters, Funding Circle was founded in 2010. Since then, it has become one of the most trusted names in the alternative finance industry. They claim to have helped over 80,000 businesses globally, and have lent out more than $14 billion to date. Funding Circle operates in several countries, including the United States, the United Kingdom, and Germany. With such a track record and global presence, it’s hard to believe that a platform like this could be illegitimate.

But don’t take my word for it. Many independent analysts and experts have examined Funding Circle’s business model, lending practices, and regulations to determine whether it’s a legitimate platform or not. In this article, we’ll delve deeper into Funding Circle’s operations, and evaluate whether it’s worth investing your money in. So, if you’re looking to invest your money into a reliable platform, keep reading to find out if Funding Circle is the right choice for you.

Funding Circle’s Background

Funding Circle is a legitimate peer-to-peer (P2P) lending platform that was established in the UK in 2010. The company is one of the largest P2P lenders in the world, enabling retail and institutional investors to lend directly to small and medium-sized enterprises (SMEs).

  • The company was founded by Samir Desai, James Meekings, and Andrew Mullinger, who met as students at the University of Oxford.
  • Funding Circle began operations in the UK in August 2010, and launched in the US in 2013.
  • The company has facilitated over £10 billion in loans to date, with over 100,000 investors and more than 77,000 businesses funded.

Funding Circle has received numerous awards for its innovative approach to lending and its impact on the economy. In 2018, the company was listed on the London Stock Exchange, making it the first UK P2P lender to launch an initial public offering (IPO).

The company’s success has not gone unnoticed by institutional investors, with the likes of BlackRock, the world’s largest asset manager, investing in the platform. Funding Circle is regulated by the Financial Conduct Authority (FCA) in the UK and the Securities and Exchange Commission (SEC) in the US, giving investors peace of mind that their funds are protected.

Founded 2010
Headquarters London, UK
Number of Investors 100,000+
Number of Businesses Funded 77,000+
Total Loans Facilitated £10 billion+

Funding Circle’s success can be attributed to its online platform, which connects investors with creditworthy borrowers quickly and efficiently. The company’s focus on small business lending has filled a gap left by traditional banks, which are often unwilling to lend to SMEs due to the perceived risk.

Overall, Funding Circle has established itself as a reputable player in the P2P lending industry, providing investors with attractive returns and businesses with access to much-needed capital.

Funding Circle’s Investors

Funding Circle is a peer-to-peer lending platform that connects businesses in need of financing with investors who are willing to lend them the money they need. The platform has become increasingly popular in recent years, attracting a wide range of investors from all walks of life. In this article, we will take a closer look at Funding Circle’s investors and what makes this platform so appealing to them.

  • Individual Investors: Funding Circle has become a popular choice for individual investors who are looking to diversify their portfolios. By investing in loans on the platform, individuals can earn attractive returns while supporting businesses in need of financing.
  • Institutional Investors: Funding Circle has also attracted a number of institutional investors, including banks, insurance companies, and asset managers. These investors are attracted to the platform’s high-quality loan book and its strong track record of performance.
  • Government Investors: In some cases, government entities have also invested in loans on the Funding Circle platform. For example, the British Business Bank has provided funding to support small businesses through Funding Circle.

One of the key reasons why investors are attracted to Funding Circle is the platform’s proprietary credit assessment model, which is designed to identify creditworthy borrowers and minimize the risk of default. The platform uses a combination of advanced analytics and traditional underwriting techniques to assess the creditworthiness of each borrower, ensuring that only the most creditworthy businesses receive funding.

Funding Circle investors can also choose to invest in loans from a variety of different risk bands, depending on their risk appetite and investment goals. The platform offers loans ranging from low-risk A+ loans to higher-risk E loans, giving investors the flexibility to choose the level of risk that is right for them.

Investor Type Benefits
Individual Investors Attractive returns, diversification, and the ability to support small businesses.
Institutional Investors The platform’s high-quality loan book and strong track record of performance.
Government Investors The ability to support small businesses and promote economic growth.

In summary, Funding Circle’s investors include a diverse range of individuals, institutional investors, and even government entities. These investors are attracted to the platform’s proprietary credit assessment model, its strong track record of performance, and the flexibility to choose loans from a variety of different risk bands. If you are considering investing on the platform, it is important to carefully evaluate your risk appetite and investment goals before making any investment decisions.

Funding Circle’s Loan Products

Funding Circle is a reputable peer-to-peer (P2P) lending platform that helps small businesses find the financing they need. The platform offers a variety of loan products designed to meet the unique needs of different types of businesses. Here are Funding Circle’s most popular loan products:

  • Term Loans: This is Funding Circle’s most popular loan product. A term loan comes with a fixed interest rate and set repayment terms, making it easy for a business to plan ahead and stay on top of its payments. Funding Circle offers term loans ranging from $25,000 to $500,000 with terms of up to five years.
  • Lines of Credit: A line of credit from Funding Circle gives a business access to a pre-approved funding limit that can be used whenever the business needs it. Interest is only charged on funds that are drawn down, so it’s a flexible and cost-effective option for businesses that need access to capital on a regular basis. Funding Circle’s lines of credit range from $6,000 to $250,000.
  • SBA Loans: The Small Business Administration (SBA) guarantees a portion of an SBA loan, which makes it a low-risk option for lenders. Funding Circle offers SBA loans ranging from $25,000 to $500,000 with terms of up to 10 years.

Applying for a Loan on Funding Circle

While each loan product has slightly different eligibility requirements, there are a few things all businesses need to have in order to qualify for a loan on Funding Circle:

  • Time in Business: Funding Circle looks for businesses that have been operating for at least two years. The longer a business has been in operation, the more likely it is to be approved for a loan.
  • Revenue: Funding Circle requires businesses to have annual revenues of at least $150,000. The revenue requirement is designed to ensure that businesses have the cash flow to make loan payments.
  • Credit Score: While a perfect credit score isn’t required, Funding Circle looks for businesses with a credit score of at least 620. However, even if a business has a lower credit score, it may still be approved for a loan if it can demonstrate strong cash flow and a solid business plan.

Final Thoughts

Funding Circle is a legitimate lender that’s helped thousands of small businesses access the financing they need. Its loan products are designed to meet the unique needs of different types of businesses, and its application process is straightforward and streamlined. If you’re a small business owner looking for a loan, Funding Circle is definitely worth considering.

Loan Product Loan Amount Interest Rate Repayment Term
Term Loan $25,000 – $500,000 4.99% – 27.79% 6 months – 5 years
Line of Credit $6,000 – $250,000 13.99% – 68.18% 6 months – 2 years
SBA Loan $25,000 – $500,000 5.99% – 11.99% 10 years

Note: Interest rates and repayment terms are subject to change and may vary based on a business’s creditworthiness and other factors.

Funding Circle’s Target Market

Funding Circle targets a specific group of borrowers and investors. By narrowing their focus, Funding Circle is able to provide specialized services and cater to the unique needs of their customers.

  • Small Business Owners: The majority of borrowers on Funding Circle are small business owners who are looking for affordable and flexible financing options. These businesses typically have annual revenues of $100,000 to $2 million and need funding for expansion, inventory, equipment, or other business-related expenses.
  • Individual Investors: Funding Circle’s platform is open to individual investors who are looking to invest in small business loans. These investors are typically interested in earning attractive returns while supporting local businesses and promoting economic growth.
  • Institutional Investors: Funding Circle also works with institutional investors such as banks, asset managers, insurance companies, and pension funds. These investors typically have larger amounts of capital to invest and require customized solutions to meet their investment objectives.

By focusing on small business owners and connecting them with a diverse group of investors, Funding Circle is able to provide a win-win solution for both parties. Small businesses get the financing they need to grow and investors get the opportunity to earn attractive returns while supporting the local economy.

According to Funding Circle’s website, they have helped over 77,000 businesses globally and facilitated over $14 billion in loans since their founding in 2010. The following table provides a breakdown of Funding Circle’s lending by sector as of December 31, 2020:

Sector Percentage of Loans
Construction & Renovation 13%
Manufacturing & Engineering 12%
Professional Services 11%
Retail & Wholesale 10%
Transport & Distribution 10%
Health & Social Work 9%
Other 35%

It is clear from this table that Funding Circle’s lending is diverse and covers a range of sectors, from construction and manufacturing to healthcare and retail. This diversification helps to spread risk and protects investors from potential defaults.

Funding Circle’s Fees and Interest Rates

Funding Circle is a legitimate business lending platform that connects small businesses with investors who provide funds to support their growth. As with any financial service, however, Funding Circle has fees and interest rates that borrowers need to be aware of.

  • Origination fees: Funding Circle charges a one-time fee of 3.49% to 6.99% on the amount borrowed. This fee is deducted from the loan proceeds and is based on the loan term, creditworthiness of the borrower, and other factors.
  • Interest rates: The annual percentage rate (APR) for Funding Circle loans ranges from 7.2% to 36%. The interest rate is based on the borrower’s credit history, the purpose of the loan, and other risk factors. Funding Circle offers fixed rates, which means that the interest rate does not change over the life of the loan.
  • Payment processing fees: Funding Circle charges a fee of $15 for failed ACH payments and $10 for unsuccessful checks.

It’s important to note that Funding Circle does not charge any prepayment penalties. Borrowers can pay off their loans early without incurring any additional fees.

Here’s a breakdown of Funding Circle’s fees and interest rates (as of October 2021) based on different loan terms:

Loan Term Origination Fee APR
6 Months 4.99% – 6.99% 7.2% – 23.9%
12 Months 3.49% – 5.99% 7.4% – 25.9%
24 Months 3.49% – 5.99% 11.9% – 28.9%
36 Months 3.49% – 5.99% 12.9% – 29.9%

In summary, Funding Circle offers a transparent fee structure and competitive interest rates for small business loans. However, borrowers should be aware of the fees associated with their loan and make sure they understand the terms and conditions before accepting the funding.

Funding Circle’s User Reviews

Funding Circle has been in the industry for more than a decade, giving borrowers the chance to access affordable loans with flexible terms. When it comes to user reviews, the peer-to-peer lender gets a mixed reaction from its clients. Let’s dive into what Funding Circle’s user reviews say about the lending company:

  • Positive Reviews: Many borrowers praised Funding Circle for its easy and quick loan application process. They appreciated the transparency of the funding terms and rates, and how the platform let them compare different loan options. Borrowers also highlighted the helpful customer service and attentive account managers who regularly follow-up on the loan disbursement process. Overall, Financing Circle received 4 to 5-star ratings from most of its satisfied clients.
  • Negative Reviews: On the contrary, there were also negative reviews from borrowers who experienced difficulties with Funding Circle. Some clients complained about the long waiting times to get their loans approved and deposited. The stringent credit checks and required qualifications also posed a challenge for some borrowers. There were also reports of not receiving any funding offers despite several loan applications. Additionally, some borrowers have expressed dissatisfaction with the high-interest rates despite having a good credit score.

What Borrowers Should Keep In Mind

Despite the mixed bag of user reviews, Funding Circle is still a reliable and legitimate lender for small business loans. However, borrowers need to be mindful of certain factors before signing a loan agreement:

  • Loan Eligibility: Funding Circle’s loan application process is targeted to small and mid-sized businesses that have been operating for more than two years. These businesses should have an annual revenue of at least $150,000, and the owner must have a personal credit score of 660 or higher.
  • Loan Amount: The loan amount ranges from $25,000 to $500,000, with a fixed interest rate of 4.99% to 27.79% for the loan term, which is usually between six months to five years. Before signing the loan agreement, borrowers should ensure the loan amount suits their financial needs and capabilities to repay on time.
  • Application Process: To avoid delays, borrowers should prepare all the necessary documents and information before applying for the loan. The required documents include bank statements, tax returns, and proof of income. The application process takes approximately 10 days to complete, and borrowers should check for prepayment penalties or any hidden fees included

Funding Circle’s User Reviews: Final Verdict

Funding Circle’s user reviews are a mixture of positive and negative feedback from borrowers. While some had a smooth and satisfying lending experience, others faced challenges with the loan approval process and high-interest rates. However, Funding Circle remains a legitimate and trustworthy lender for small business owners who need affordable loan options. To prevent any unexpected outcomes, borrowers should ensure they meet the eligibility criteria, understand all the loan terms and repayments, and prepare all the necessary documents before applying for a loan through Funding Circle.

Funding Circle’s Industry Recognition

As one of the largest and most renowned peer-to-peer lending platforms, Funding Circle has garnered a lot of attention within the financial industry. Here are just a few examples of the recognition they’ve received.

  • Winner of the LendIt Fintech Industry Awards for Top Small Business Lending Platform – In 2017, Funding Circle took home the trophy at the prestigious LendIt Fintech Industry Awards, beating out several other major players in the P2P lending space.
  • Recognition from the UK government – In 2016, Funding Circle was included in the UK Prime Minister’s Taskforce on Small Business, and was also awarded the title of “Alternative Finance Provider of the Year” at the British Small Business Awards.
  • Backed by major institutional investors – Funding Circle’s impressive roster of institutional investors includes the likes of Blackrock, the European Investment Bank, and the UK Government’s Business Bank.

These awards and recognition are a testament to the legitimacy and credibility of Funding Circle as a reputable lending platform. As Funding Circle continues to grow and expand its services, we can expect to see even more accolades in the years to come.

Is Funding Circle Legitimate FAQs

1. Is Funding Circle a scam?
No, Funding Circle is a legitimate peer-to-peer lending platform that allows investors to lend money to small businesses.

2. Is my money safe with Funding Circle?
Funding Circle has measures in place to protect investors such as a Provision Fund and a Reserve Fund. However, like any investment, there is a risk involved.

3. Who can invest with Funding Circle?
Individuals over 18 years old and eligible institutional investors can invest with Funding Circle. There may be specific eligibility criteria depending on your country of residence.

4. How much can I invest with Funding Circle?
The minimum investment amount is typically £10, although this may vary depending on your country of residence. There is no maximum amount.

5. What fees are involved with Investing with Funding Circle?
Funding Circle charges a service fee for managing the loan and also takes a small percentage of the interest earned by investors. Some fees and interest rates may vary depending on your country of residence.

6. How do I sign up to invest with Funding Circle?
You can sign up to invest with Funding Circle online. The process involves completing an application, passing a suitability assessment and agreeing to the Terms and Conditions.

Closing Thoughts

Thanks for reading about Funding Circle’s legitimacy. As with any investment opportunity, it’s important to do your own research and assess the risks involved. However, Funding Circle has proven to be a reputable and reliable platform for investors to lend money to small businesses. If you’re interested in investing, visit Funding Circle’s website for more information. We hope to see you again soon for more informative articles.