Funding Circle Loan Agreement: What You Need to Know
If you`re a small business owner in need of capital, you may have considered a Funding Circle loan. This alternative lending platform connects investors with small businesses seeking loans, making it a popular choice for those who may not qualify for traditional bank loans. But before you sign on the dotted line, it`s important to understand the terms of your Funding Circle loan agreement.
Loan Terms
Funding Circle loans typically range from $25,000 to $500,000, with terms ranging from 6 months to 5 years. The interest rate you receive will depend on factors such as your credit score, revenue, and time in business. It`s important to note that Funding Circle loans may come with higher interest rates than traditional bank loans, but they also offer faster funding and more flexible terms.
Collateral
Funding Circle loans are unsecured, meaning you won`t need to put up collateral like your home or business assets to secure the loan. However, you will need to sign a personal guarantee, which means you are personally responsible for repaying the loan if your business is unable to.
Fees
Funding Circle charges an origination fee of 3.49% to 6.99% of the loan amount, which is deducted from your loan proceeds. There are no early repayment penalties, but if you miss a payment, you may be charged a late fee of 10% of the overdue amount.
Repayment
Funding Circle loans are repaid through automatic weekly or monthly payments via ACH withdrawal from your business bank account. It`s important to ensure you have enough funds in your account to cover the payments to avoid any additional fees or damage to your credit score.
Loan Agreement
Before you receive your Funding Circle loan, you`ll need to sign a loan agreement which outlines the terms of your loan, including the loan amount, interest rate, repayment schedule, and any fees. It`s important to read the agreement carefully and understand all of the terms before signing.
In conclusion, a Funding Circle loan can be a useful tool for small business owners in need of capital. However, it`s important to understand the terms of your loan agreement, including loan terms, collateral, fees, repayment, and the loan agreement itself. With proper understanding and planning, a Funding Circle loan can help your business grow and thrive.