There are many incentives for individuals and small businesses to seek equity from a P2P lending platform service, instead of the traditional market options. Often, one can expect lower volatility and a higher return rate on investments.
Funding Circle is one of the top peer-to-peer lending businesses on the market today and was the first such business to open its services in the United Kingdom. Currently, Funding Circle operates in the United Kingdom, United States, Germany, Spain, and the Netherlands. Funding Circle reviews reveal that it has a very happy customer base - on both sides, borrowers & investors.
Funding Circle Reviews
For those who wish to take their small business to the next level, partnering with Funding Circle might be the right choice for your business' immediate and long-term growth. Funding Circle can help individuals to refinance their debt, acting to free up capital and assist in the next stage of your business expansion.
With Funding Circle’s peer-to-peer lending platform surface, the customer which is either an individual or a business is matched with the investors who are looking to finance the loan. Compared with the competitors of Funding Circle, it generally offers competitive rates and the ability to fund a customer's loan expediently.
Funding Circle operates exclusively in the United States, United Kingdom, Germany, and the Netherlands. Currently, the lender only offers marketplace connections which connect small- and medium-sized business with investors. Over $3 billion has been lent out—as of February 2017—primarily having been granted to small- and medium-sized firms.
Funding Circle has made its reputation on assisting in loan funding for loans ranging between $25,000 and $500,000. In the United States, the interest rates for borrowers range between 5.5% and 27.8%.
Funding Circle holds a minimum investment stipulation of $50,000 and charges a 1% service fee for any payment which is received within any one month. In 2016, a 7.1% annual return rate was reported for the loans made in the United Kingdom.
Here's a corporate video which provides an overview of the company:
How It Works
Investments made with Funding Circle are not guaranteed as they are with a savings account from a traditional bank. If one’s loan goes into default, Funding Circle offers no guarantee of risk mitigation. An individual or business' credit is assessed, to determine if they qualify for a particular risk band, which investors will use to make decisions on an individual's borrowing potential.
Loans are purchased by individual investors and institutional investors in fractional partitions or in their entireties via their given country of origin. In the United States, individuals and investors who would like to invest in the Funding Circle P2P the marketplace must be officially accredited.
Funding Circle, as an entity, can also purchase loans via a Funding Circle SME Fund. The Funding Circle SME Fund was created in 2015 as an investment trust. It trades on the London Stock Exchange, along with other investors in the United Kingdom.
For accredited Investors, whose businesses operate from the United States by using an IRA (Individual Retirement Account), there is a current plan in place, which will serve to allow investors from the United Kingdom to use tools called Innovative Financed Individual Savings Account.
Funding Circle will accrue money from their standard fee, which charges a borrower a specified percentage of each loan, which is funded by Funding Circle. They also collect an annual fee charged to outstanding loans and based on the unpaid principal. Investors obtain a return from the interest rate that is charged on any loan, financed through Funding Circle.
Funding Circle Requirements
If you are a startup business or a small business that is in the starting phases of operations, Funding Circle is not the lender for you. In a business, that is currently receiving income which indicates a sporadic growth pattern, Funding Circle will most likely not approve your request for a P2P loan.
The borrowers which Funding Circle is looking to lend money to are most commonly businesses which have been in operation for over ten years and are generating an annual revenue stream of over $2 m. They require a business to be well established to employ at least ten employees and offer a validated plan for revenue growth, in order to grant a loan.
Funding Circle has steeper regulations and stipulations, making them more exclusive in their lending than many other peer-to-peer lending competitors. For an individual, it will be beneficial to take a credit score test to determine one's eligibility for borrowing through Funding Circle.
To qualify for a loan through Funding Circle, one must have a credit score of at least 620. Other online p2p lenders require a minimum of 500, while Funding Circle holds an average customer credit score of 700. The most important stipulation is a solid business revenue growth plan to be presented to Funding Circle.
Funding Circle Competitors
The market of peer-to-peer lending is flush with lenders. If Funding Circle is not the right choice for your financing needs, there is likely a lender who will accommodate your current state of affairs. Listed below, are a few of Funding Circle's top competitors.
The largest peer-to-peer online lender on the market, Lending Club offers credit, personal finance, lending, and consumer lending. They bring in an estimated revenue stream of over $426 million a year and employ over 1400 employees. They are based in San Francisco, California, in the United States.
The United Kingdom's largest peer-to-peer lender, Zopa offers P2P lending, marketplace lending, and finance options. Zopa matches smart, sensible borrowers with individual lenders, offering low loan rates and high-interest returns. The company brings in an estimated revenue stream of over $70 million a year and employs over 70 people. The company is located in London, in the United Kingdom.
One of the top peer-to-peer lending services on the market in the United Kingdom, RateSetter offers P2P lending, financing, and financial services for customers. They bring in an estimated $35 million a year and employ a staff of over 180 people. They are located in London, United Kingdom.