Funding Circle business loans and the alternatives to compare

Funding Circle is a UK online lender that provides business loans and other finance to small and medium-sized businesses. It began in London as a peer-to-peer platform connecting businesses with individual investors, but it no longer offers peer-to-peer investing to the public and now lends directly, funded by institutional investors. Funding Circle is one of the lenders Smart Funding Solutions works with, so we can include it when comparing options for your business alongside the rest of our panel. This guide explains how it works, what it looks for and what else to compare before you borrow.

01What are the alternatives to Funding Circle?

The main alternatives to Funding Circle are high street bank loans, other online and specialist lenders, invoice finance, revolving credit, asset finance and merchant cash advances. Smart Funding Solutions, a whole-of-market commercial finance broker, compares these across its panel of 300+ lenders, so one application shows several options instead of one lender's single yes or no.

The right alternative depends on why you were looking at Funding Circle and what the money is for:

• A fixed term loan at a bank: often cheaper for established, profitable businesses. See our reviews of NatWest and Allica Bank.
• Other online lenders: similar speed with different criteria, such as iwoca or Capify. Compare them on our lender reviews page.
• A revolving credit line: draw and repay as needed instead of a lump sum. See revolving credit facilities and Funding Circle FlexiPay explained.
• Invoice finance: when cash is tied up in unpaid invoices. See invoice finance.
• Asset finance: when the money is for equipment or vehicles. See asset finance.
• Merchant cash advance: repaid from card takings, for retail and hospitality. See merchant cash advance.
• Government-backed lending: the British Business Bank's Growth Guarantee Scheme through accredited lenders.

Compare offers on total repayable, fees and guarantees, as set out in how to compare UK business loan providers. To see several lenders at once, use Instant Quotes (no credit check).

02How Funding Circle business loans work

• Online application: businesses apply through a digital process, usually sharing bank statements or connecting accounts through open banking.
• Term loans: fixed-term business loans repaid in regular instalments, typically for growth, equipment, stock or working capital.
• Other products: the lender has also offered ways to spread the cost of individual business purchases; check which are available now.
• Personal guarantees: as with most lenders to limited companies, directors are usually asked to guarantee the borrowing.

Loan sizes, terms, eligibility and pricing change over time, so check Funding Circle's own website for its current products and criteria.

03What online lenders like Funding Circle look for

• how long the business has been trading and its turnover
• recent bank statements and the pattern of income and outgoings
• filed accounts and profitability, particularly for larger amounts
• business and director credit history
• existing debt and whether new repayments are affordable

Our guide to how lenders assess business loan applications covers each of these in more detail.

Loan sizes, terms, eligibility and pricing change over time, so check Funding Circle's own website for its current products and criteria.

04Pros and cons of applying to a single online lender

05Alternatives to compare

Depending on what you need the money for, you might compare:

• unsecured business loans from other banks and specialist lenders
• invoice finance, if you are waiting for customers to pay
• asset finance, if you are buying equipment or vehicles
• a revolving credit facility for ongoing, fluctuating cash flow needs
• a merchant cash advance, if most of your income comes through card payments
• government-backed lending through the Growth Guarantee Scheme, delivered by accredited lenders; check the British Business Bank for current availability

06Going direct or using a broker

07Funding Circle FlexiPay and the cashback credit card

As well as loans, Funding Circle offers two ways for limited companies to pay business costs on credit. We arrange both.

• FlexiPay: a revolving credit line where each use is repaid in equal monthly instalments for a flat fee. Read Funding Circle FlexiPay explained.
• The cashback business credit card: a Visa card with a limit of up to £250,000, cashback on spending and up to 42 days interest-free when the balance is paid in full. See the Funding Circle cashback card on our business credit cards page.

Companies that already use FlexiPay or have a Funding Circle loan are not yet eligible for the card (Funding Circle, checked October 2026).