Funding Circle Review 2020 Update
Introduction
Funding Circle is the UK’s biggest peer-to-peer lending platform. It provides an online marketplace where individuals and institutional investors can lend money directly to small businesses. In this review, we will explore the key features of Funding Circle and how it works.
How Does Funding Circle Work?
Funding Circle operates by connecting small businesses in need of funding with investors looking to lend money. Small businesses can apply for a loan through the platform, and if approved, their loan request is listed on the marketplace for investors to review. Investors can then choose which businesses to lend money to based on their risk appetite and return expectations.
Key Features of Funding Circle
– Loan sizes ranging from £10,000 to £500,000
– Loan terms of 6 months to 5 years
– Fixed monthly repayments
– No early repayment fees
– Quick application process
Pros of Using Funding Circle
– Competitive interest rates
– Diversification of investment portfolio
– Support for small businesses
Cons of Using Funding Circle
– Risk of borrower default
– Lack of deposit protection
– Not suitable for short-term investments
Video Review
Conclusion
Funding Circle is a popular peer-to-peer lending platform in the UK that offers small businesses access to funding and investors an opportunity to earn attractive returns. While there are risks involved, the platform provides a transparent and efficient way for individuals to lend money to businesses in need.
FAQs
Q: Is Funding Circle safe to use?
A: Funding Circle is regulated by the Financial Conduct Authority (FCA) in the UK, which provides some level of protection for investors. However, there is always a risk of borrower default, so it is important to carefully consider your investment decisions.
Q: How much can I lend through Funding Circle?
A: Funding Circle offers loan sizes ranging from £10,000 to £500,000, allowing investors to diversify their investment portfolio across multiple businesses.
Q: Are there any fees associated with using Funding Circle?
A: Funding Circle charges a servicing fee on the total amount of the loan, which is deducted from the borrower’s repayments. There are no early repayment fees for investors.
Q: How long does it take to get approved for a loan on Funding Circle?
A: The application process for a loan on Funding Circle is quick and efficient, with most loans being approved within a few days.
Q: Can I withdraw my funds early from Funding Circle?
A: While Funding Circle does not charge any early repayment fees, it may take some time to sell your loan parts on the secondary market in order to withdraw your funds early.
Q: What happens if a borrower defaults on their loan?
A: In the event of a borrower default, Funding Circle has a collections process in place to recover the outstanding amount. However, there is a risk that investors may not receive the full amount of their investment back.
Overall, Funding Circle is a reputable peer-to-peer lending platform that provides a valuable service for both small businesses and investors. It offers competitive interest rates, a diverse range of loan options, and support for businesses in need of funding. However, it is important to carefully consider the risks involved and diversify your investments accordingly.
