Funding Circle Review

OnDeck Online Lender Review, Lending Club Online Lender Review, Credit Suite, Yellowstone Capital Online Lender Review, Lendio Online Lender Review Funding Circle, Bond Street Review, SquareTwo Financial, Kabbage, Prosper, Fundation, Fundera, Behalf, CAN Capital, Balboa Review, Credibly Review, LenCred Review-Pearl Financing Review-Quarter Spot Review-BlueVine Review
Summary
Review Date
Reviewed Item
Funding Circle
Author Rating
21star1stargraygraygray

Credit Suite Blog

Get current information on getting credit and loans to grow your business

CLICK HERE TO LEARN MORE

Summary
Review Date
Reviewed Item
Funding Circle
Author Rating
21star1stargraygraygray

Funding Circle Review

Published By Janet Gershen-Siegel at June 27, 2018

OnDeck Online Lender Review, Lending Club Online Lender Review, Credit Suite, Yellowstone Capital Online Lender Review, Lendio Online Lender Review Funding Circle, Bond Street Review, SquareTwo Financial, Kabbage, Prosper, Fundation, Fundera, Behalf, CAN Capital, Balboa Review, Credibly Review, LenCred Review-Pearl Financing Review-Quarter Spot Review-BlueVine Review>

A Look at Funding Circle, an Online Lender

Written by Janet Gershen-Siegel

Funding Circle is one of several lending companies in the online space. They serve as a peer to peer business lender. We look at the specifics and also drill down into the details.

Background

Funding Circle is online here: www.fundingcircle.com/us/. Their physical addresses are in San Francisco, CA; London and Berlin. You can call them here: (855) 385-5356. Their contact page is here: www.fundingcircle.com/us/about/contact/. They have been in business since 2010.

Funding Circle has a business borrowers’ Bill of Rights, here: www.fundingcircle.com/us/business-borrower-bill-of-rights/

It says:

  1. The Right to Transparent Pricing and Terms – A borrower has a right to see the cost and terms of any financing you are offered in writing. This in a form that is clear, complete, and easy to compare with other options. It is a bit surprising that more online lenders are not as forthcoming about their fees and rates.
  2. The Right to Non-Abusive Products – A borrower has a right to loan products that will not force them into expensive cycles of re-borrowing. A lender’s profitability should come from successful repayment, and not the fees and interest collected from defaults. This is good business sense as, unless rates are truly exorbitant (and they are for some lenders in the online space), then it’s going to be more profitable for a lender to get the loan paid back with interest.

Borrower’s Bill of Rights Continued

  1. The Right to Responsible Underwriting – A borrower has a right to work with lenders who will set a borrower up for success and not failure. High loss rates should not be accepted by lenders simply as a cost of business, which would be passed onto borrowers in the form of high rates or fees. This is generally just good business sense. Unless a lender intends to be in the high risk lending space, a lender would be looking for better credit risks, and that often can mean offering smaller loans as those are more likely to be paid back.
  2. The Right to Inclusive Credit Access – A borrower has a right to fair and equal treatment when looking for a loan. This is legally required anyway.
  3. The Right to Fair Collection Practices – If a borrower cannot repay a loan then the borrower has a right to be treated fairly and respectfully throughout the collections process. Collections on defaulted loans should not be used by lenders as their main source of repayment. This is required under the Federal Trade Commission’s Fair Debt Collections and Practices Act.

Term Loans

At Funding Circle, borrow $25,000 – $500,000. Decisions come in as little as 24 hours. Get funding in as little as 5 days. Repay on terms from 6 months to 5 years.

Fees

Funding Circle’s rates start at 4.99% per year. There are no prepayment penalties. The specifics are in the below table.

Term Interest Rate
6 months 4.99 – 22.74%
1 year 7.05 – 23.74%
2 years 7.35 – 24.74$
3 years 7.65 – 25.49%
4 years 7.95 – 26.24%
5 years 8.25– 26.99%

They charge origination fees of .99% – 6.99%. In addition, their late fee is 10% of the missed payment. There is also a $35 NSF fee.

Advantages

So the advantages include no prepayment penalty. There are also relatively fast decisions and funding. In addition, the Borrowers’ Bill of Rights is encouraging.

Disadvantages

So what are Funding Circle’s disadvantages? It should be obvious: fees, fees, and more fees. They are for origination, missing payments, and also for insufficient funds. Some maximum rates are high!

Takeaways

Fees are high at Funding Circle, but at least they’re being transparent about them. However, interest rates increase as terms get longer, although there is no prepayment penalty. Hence Funding Circle is best for companies which do not need to borrow much and can pay it all back not only on time, but early. Borrowers which need more time to pay a loan back would probably do better elsewhere.

Finally, read the fine print and do the math. Therefore, go over details carefully. And decide if this option will be good for you and your company. In addition, consider alternative financing options beyond lending. This includes building business credit, to best get the money you need. Today, we want to hear from our audience! Share your voice with us about your experiences with online lenders.

Summary
Review Date
Reviewed Item
Funding Circle
Author Rating
21star1stargraygraygray
Summary
Review Date
Reviewed Item
Funding Circle
Author Rating
21star1stargraygraygray

Leave a Reply

Your email address will not be published. Required fields are marked *

Leave a Reply

Your email address will not be published. Required fields are marked *