Funding Circle open lending to sole traders and partnerships

The growth of Funding Circle as a credible vehicle for financing Uk SMEs took another huge step forward today when they announced that they would be opening their lending platform to sole traders and partnerships for the first time. Historically Funding Circle have limited their loan offerings to Limited Companies (LTDs) and Limited Liability partnerships (LLPs) but since this has proved so successful and there is clearly a demand - both from the borrowers and the lenders - for this lending to expand into other markets. A staggering 70% of all UK businesses are what we would refer to as Non-limited companies i.e sole traders and partnerships so this new move does increase the potential reach of Funding Circle quite substantially. The move is initially 'softly softly' and we note their press releases about the types of sole traders and partnerships they will lend to include 'barristers, doctors and veterinary practitioners as well other business types such as farms' whereas these categories probably make up the cream of sole traders and partnerships and a very small percentage as well. They pointedly didn't refer to funding the tens of thousands of shop keepers and tradesmen up and down the country and while in theory these business people are eligible, we surmise they aren't the immediate target of this move into Non limited companies by Funding Circle. The criteria for these applicants remains the same as for LTDs and LLPs in that a minimum two years' trading history is required, they must pass credit checks and they are required to have the affordability/cash flow for the loan. Loans will similarly also be graded as either A to C- and attract loan offer commensurate to this ranking, just as existing businesses would fund. The only key difference is that in order to get around the requirements of the Consumer Credit Act the minimum loan size is £25,000. It's a great move from Funding Circle and will broaden their appeal and open their platform to more borrowers and probably also investors. If you are a business looking to raise money via Funding Circle or any of the other peer to peer lenders then we can help. At Choice Loans we charge you no fees but can advise you based on our experience of dealing with these funding platforms. To find out more either call us on 0845 1260350 or complete the Commercial Loan application form and we will call you.