Funding Circle's Asset Finance loans

Since their launch in 2010 Funding Circle have made tremendous strides in lending to UK SMEs. At the time of writing over £80m in loans have been channeled from lenders to UK businesses via their platform. However, the vast majority (estimated over 90%) of these loans have been unsecured loans and Funding Circle are now keen to grow their presence in the Asset finance market too, something they have always done but hasn't had the same traction as their unsecured loan offering. So what is available? Funding Circle Asset finance loans are available to credit worthy and profitable UK companies in amounts from £20,000 up to £500,000 over periods of up to 5 years. Some interesting points to note about their offering where they differ from conventional asset finance lenders to the benefot of the borower are:

• As with their Unsecured Business loan offering, the loans are funded via an auction among FC's lenders. This competition ensures keen funding rates for the borrower. (NB For speed of transaction though they are shortly due to launch a fixed price auction as well)
• Not just new but also second hand assets can be funded
• If the borrower is sufficiently strong they will not only fund the entire asset price but also the VAT element as well
• Should the borrower wish to repay early there are no Early Repayment Charges giving the borrower greater flexibility than conventional asset finance agreements

There are some restrictions to be aware of though:

• As with the Unsecured Loans they provide currently only Limited Companies with two years' trading history, clean credit and adequate profitability are eligible to apply (NB  Plans are underway to allow Sole Traders and partnerships use the service too but this is not available just yet)
• Only Hire Purchase arrangements are available as finance (i.e. you effectively "hire" the asset from Funding Circle over the life of the loan and when the last payment is made ownership transfers to you)
• One selected assets are eligible to be finance and while the list of eligible assets is extensive and includes most popular asset purchases, not all assets are eligible to be financed this way

The current application process is similar to the Unsecured loan one requiring a company to show recent accounts, management accounts, answer questions on the business etc but an extra form giving details of the asset is also required. Funding Circle are currently working to change this process for asset finance to make it more efficient and less cumbersome for Asset finance loans. The fee structure is also quite transparent which is in keeping with FC's ethos but may not please conventional asset finance brokers. Borrowers pay a flat fee of 5% for their funds which, though many brokers wouldn't want you to know this, is quite competitive. For further information on getting a Funding Circle Asset Finance loan, we at Choice Loans can assist you with the process at no cost to you so please either call us on 0845 1260350 or complete our Asset Finance enquiry form here and we will get back to you.