Fast finance to grow your business

Obtaining finance from a bank can be a stressful experience: multiple meetings, a slow, time-consuming process, and a lack of transparency about the costs involved.

Natasha-JonesBy Natasha Jones, communications manager, Funding Circle.

All of this often ends with a ‘no’. However, it needn’t be like this.

Out of the ashes of the credit crunch has emerged a new way of helping successful, growing businesses find fast, fair and transparent finance. Funding Circle is an online marketplace which allows people and organisations (such as local councils and the government-backed British Business Bank) to bypass the banks and lend directly to small businesses.

To apply for a loan, businesses complete an online application form in as little as 10 minutes. Here they provide information about the business, including key financial details, management structure and number of staff employed. Crucially, no face-to-face meeting is required, so you can apply outside of working hours. Although there is a team on hand to help, should you prefer to talk it through over the phone. To be eligible you must have been trading for at least two years and have a minimum turnover of £50,000.

Once businesses pass the credit assessment process, they are given a risk band from A+ to C- and the loan is posted on the marketplace. From here, investors choose which type of businesses to lend to. Typically, businesses access the finance they need within two weeks, compared to up to three months with a bank.

Funding Circle arrange the whole process, so you receive one lump sum and make one monthly repayment. Unlike banks there is no early repayment fee and the fee structure is simple and easy to understand. Since launching in 2010, investors have lent over £530 million to 8,000 businesses across the country. This form of direct lending and borrowing has helped to create an estimated 24,000 British jobs. Lancashire County Council have been lending directly to businesses within the area via Funding Circle since 2012. They part fund local loans, helping to stimulate economic growth and support enterprise.