Posted by Hello everyone. Ali is here with another review of a newly launched online business opportunity called Funding Circle! There are a lot of lending platforms online. Some are legit, while some are not. But here, we will be talking about one; Funding Circle. If you’ve seen ads about Funding Circle, you probably want to know what is this program exactly and more importantly, is funding circle a scam?
Well, you don’t need to search anymore to find the answer of your questions because by reading this honest review of Funding Circle, you can find all information about this online investment opportunity and see if it’s worth your money or not
So read this review till the end if you’re looking for the Truth!
Summary
Product Name: Funding Circle
Official Website: https://www.fundingcircle.com
Owner: Samir Desai
Type: Peer-to-peer lending marketplace
Cost to Join: 4.99% to 22.99% depends on amount of your investment
Recommended? No
Overall Rating: 5 out of 10
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What Is Funding Circle All About?
Funding Circle is an organization founded in San Francisco, California. It was founded in the year 2010 to serves as an online peer-to-peer lending market place. Statistics revealed that it had provided aid to over 15,000 businesses and establishments worldwide. Statistics also disclosed that those aids provided over the years for businesses have accumulated into 10 billion dollars in terms of the loan.
Reports have shown that over 7 billion pounds worth of loans has been handed out to small and medium-sized businesses. Funding Circle has also gotten credibility by being listed on the London Stock Exchange.
Records have it that Funding Circle was the first website to utilize the process of the peer-to-peer system of lending to businesses in the United Kingdom. Funding Circle is also operational in countries including the United States, Germany, as well as the Netherlands.
The company has made it a policy to provide easy-to-understand application processes, make quick decisions, as well as provide white-glove services to small business establishments all around the world.
In terms of accessing aids and grants, funding circle is quicker than commercial banks, making it possible for borrowers and all those who seek assistance to access loans as fast as a working day after their request for loans have been approved.
Also, in terms of affordability, it is less costly than a cash advance. These loans are repayable over a 5-year period with a starting interest rate of about $4.99 percent.
Small businesses that request loans from Funding Circle utilize those loans in the expansion of their business locations, refinance their debts, service their payroll, as well as purchase inventories.
To be eligible to access these loans, you must be able to meet the following yardsticks. They include:
- Your business tax returns must be recent or at least two years old.
- Proof of personal tax of at least a year old
- A recent statement of account from your bank which shouldn’t be later than six months
- Provision of all business debt information.
- A guaranty form from anyone who owns a 20 percent stake or more
Funding Circle isn’t just for those looking for a financial bailout. As an investor, you can also key to this initiative. You are given the freedom to choose which business venture your money is lent to.
The Autobid feature on Funding Circle allows you to distribute and allocate your investment among over 100 businesses across the world.
About the Founders Of Funding Circle
Funding Circle was founded by Samir Desai, James Meekings, and Andrew Millinger. It was launched in 2010 with its headquarters in London, United Kingdom.
Index ventures in April 2011, gave it funding of about 2.5 million pounds. Funding Circle announced in 2013 that it was capable of facilitating and granting about 150 million pounds in loans, as a result of its growth and expansion.
Funding Circle raised Thirty-seven million dollars in October of 2013, and it also announced that it was merging Endurance Lending Network to facilitate access to loans in the United States. Since its birth in 2010, the company disclosed that over 81,000 persons have their names registered with them.
On their list of investors are universities, local councils, as well as the British government itself. Among the notable strides achieved by the company, Alcentra, which is a global asset management firm accepted to buy about $1 billion worth of business loans from Funding Circle United States platform.
This loan was spread through a period of 3 years and was facilitated by Credit Suisse. About 81,000 businesses were expected to benefit from this loan.
Funding Circle value when it listed on the London Stocks Exchange was about 1.5 billion pounds. Their shares went for 440 pence each. In Initial Public Offering (IPO), the company was able to realize about 300 million pounds. This IPO accounts for 29.3 percent of the company’s shares.
A minimum of 10 percent of the shares was bought by a Danish millionaire, Anders Povlsen, thereby anchoring the float.
How Does Funding Circle Work?
It should be known that Funding Circle is not a bank and so do not have the same operational procedures when it comes to applying for and accessing loans. It is rather a marketplace where the marriage of accredited and institutional investors with businesses, firms, and establishments that need loans by affording them a platform that handles the risk assessment, underwriting of loans as well as management of payments portion of their requests.
There are many lenders springing up every day as the business of granting loans begins to gather storm. These lenders, however, are only able to loans to businesses whose demands are small. This has created a niche for lenders to target businesses in search of small loans.
Commercial banks created this situation. They do not approve the disbursement of small loans to businesses. How Funding Circle tops both is that it not only grants small loans but gives loans in excess of $500,000.
Who Can Benefit From Funding Circle?
Most of the time, there are benefits behind programs and products that I review like Weekly Money Call, TTEC or Commission Hero. The two major beneficiaries of Funding Circle are the borrowers. That is those who own businesses, firms, and establishments and want to access loans to keep their concerns floating.
The second major beneficiary is investors. Those who make their money available for investment in several businesses.
- The Investors
In the United States, for instance, Funding Circle is providing its investors with a return of about 10 percent and a return of about 7 percent in the United Kingdom.
These returns are guaranteed even though it records about 2 percent default in loans annually. That means that as an investor, your return is guaranteed even if the company doesn’t record its projected revenue for that year.
- Business Owners
Business owners who want to access loans for the purpose of expanding their locations, service their payroll, etc. also benefit from this company. It favors them even more than commercial banks, and accessing loans isn’t cumbersome as it in commercial and other lending services.
Can Money Be Made From Funding Circle?
The answer to this question is a resounding “Yes.” This is particularly true for those looking for avenues to invest in. You are allowed the freedom to invest in over 100 business concerns of your choice. Investors are particularly allowed to negotiate rates with borrowers directly.
Pros & Cons
Pros of Funding Circle
Funding Circle has its gain as its offers, and payment of the loan system is one of the best you can find. Below are some of the benefits of using the Funding Circle:
- Application Requirements Are Fair
Going through Funding Circle corporate website, all the requirements for loan applications, as well as fees, are all clearly stated there. This singular act is a clear sign of transparency. Showing applicants as well as investors that the company has no hidden agenda, and there are no other hidden charges.
Small business owners can then apply with lenders for the exact term they desire and the particular amount in the loan they are applying for. Once the loans are secured, the business owners are at liberty to use them for many purposes.
These loans feature a monthly payment with a fixed interest rate. Paying the loans off early attracts to fine nor penalty.
- Presence Of Resource Center
There is also the presence of a resource center on the corporate website of Funding Circle. This resource center has educational articles, financing tips from experts and entrepreneurs, etc. It is clear that Funding Circle doesn’t just want people to delve into a venture they are ignorant of.
They want you to be well informed and also up-to-date with the latest trends in the granting of loans as well as investment.
- Speedy Approval
When a loan is applied for, it doesn’t take more than one working day for the loan to be approved. This is a foreign practice to commercial banks as they may delay the approval of the loan and may even be denied after a series of delays.
- Rates Are Transparent
Funding Circle has a penchant for fairness, equity, and transparency. Every information you will need concerning their rates and fees are all a click away from accessing on their website. This eliminates the skepticism within the minds of business owners bothering on whether there exist other hidden charges.
- Favorable Variable Term
The period in which you are expected to repay your loan is favorable. You will be given between 6 months and a year to repay your loan, depending on your loan agreement. This gives you enough time to source for the money.
Funding Circle understands how difficult it is to source for money, especially in this era of failing economies.
- Lower Interest Rates
When compared to other online lenders, Funding Circle offers a much lower interest rate. Statistics show that its annual percentage rate is pegged at between 11.67-36 percent. This includes a one-time origination fee of between 3.49 percent to 6.99 percent.
In addition to this, Funding Circle also guarantees that on repaying your loan early, you can save money on interest costs.
Cons of Funding Circle
Everything on earth has its advantages and disadvantages, even Funding Circle. The aim of detailing the shortcomings of this company is to help you make a better decision by considering everything before making a decision.
- It Is Not For Startups
Funding Circle does not offer loans to new businesses, startups, businesses with dwindling revenues, or businesses with unclear growth projections. To qualify for this loan, amongst other requirements, you will be asked to present at least a two-year history of your firm.
Those who borrow from Funding Circle are known to have been in business for at least 11 years, have 12 employees, and majorly an annual revenue of about 1.6 million dollars.
- The Demand High Qualifications For Their Loans
Qualifying for loans on Funding Circle is cumbersome and difficult. They do not have a minimum annual revenue requirement. That means that the annual revenue requirement for this year may be pegged at 1.7 million dollars and may increase to 3 million dollars if you’re seeking to get a loan from them next year.
Other high and difficult demands entail that you are required to have a personal credit score of at least 620 to be eligible for Funding Circle loans. However, many online lenders demand way lesser.
The average personal credit score of its funded borrowers stood at 700, according to the company. Some even demand you have a personal credit score of 600 or lower.
Other requirements include lien of business assets, a personal guarantee from primary business owners. This means that failure to repay the loan, you may forfeit your personal assets.
Final Word – Is Funding Circle a Scam?
Funding Circle being listed in the London Stocks Exchange gives it a level of credibility and legitimacy. Over 81,000 businesses are benefiting, and many more are still benefiting. The company has great reviews from both borrowers and investors.
Its legitimacy hasn’t been called to question in any instance as more and more investors have continued to invest in Funding Circle.
Conclusion
If you’re a business owner that has been in operation for over 11 years and have a high annual revenue of about 1.6 million dollars and in need of loans, then you should consider Funding Circle. Investors looking for outlets to invest in should also consider the company.
Transparency and fairness breed trust. Commercial banks wouldn’t give grant you loans as fast as you desire them to. They may still turn down your request after subjecting your proposal to a series of scrutiny, but it only takes 10 minutes for Funding Circle to begin your loan application process.
They even go the extra mile in doing your loan underwriting. You’re also allowed to use the approved loan for anything you have in mind provided you will back as at when due. The payment window is even more flexible, as you’re allowed between 6 months and 12 months to pay up.
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Thanks for reading my Funding Circle review and feel free to ask your questions in the comments below.