Funding Circle increase maximum loan size to £1m

In a testimony to how popular their service is proving with both Borrowers and lenders, Funding Circle have today formally announced that they will increase their maximum loan size available to £1,000,000 - this is double the previous maximum of £500,000. This loan size is available in three areas that Funding Circle provide to UK SME's for:

• Large Secured loans: assets must be available to cover the full amount of the loan
• Large Asset purchases: New assets can be purchased at the amount up to 100% of cost (incl VAT)
• Property loans: A rental property/properties can be secured as a second charge only up to 85% LTV

It's also worth noting that this increase is the second that Funding Circle have made in the last 6 months having previously raised the maximum loan amount from £250,000 to £500,000 in September 2012. Please note though that Unsecured commercial loans - still the most popular product on their platform accounting for about 95% of all loans funded - are still at a maximum of £100,000 Why have they made this increase? Well, there are two primary reasons in our opinion. First, Funding Circle has been hugely popular with both Borrowers and Lenders and they want to be able to offer more finance products. An extension of loan size is a natural evolution and didn't require a huge amount of innovation to be able to offer it; it's doing what they have always done but in bigger size. Second, Funding Circle wants and need to diversify their product based from the standard Unsecured loans they do. This product, as stated above, is 95% of their deals and they probably felt that to get more traction in other markets they needed to do something special. £1m should help with this goal. For all these loans the main Funding Circle criteria for borrowers remains. They will only lend to UK registered limited companies that have been trading profitably with a good credit score for at least 2 years. For some of the large loans, a five year trading history may also be required. What's next for Funding Circle? Well, the word on the street is they are going to start looking at lending to sole traders and partnerships as well, a move that would be hugely welcomed by many businesses. Currently this sector of the market is unserviced by the peer-to-peer lending industry so it seems like a logical next step to us. Once it happens, we'll be sure to write a blog about it. In the interim, if you do require advice on getting a Funding Circle loan, we have experience in arranging loans for them or also for some of their competitors such as ThinCats, Funding Knight and Rebuilding Society and can help you. Please either complete our Commercial Loan enquiry form or call us on 0845 1260350