A step-by-step guide to borrowing.

A step-by-step guide to borrowing.

Welcome to Funding Circle. Getting finance should be quick and easy, so you can get back to doing what you do best - running your business. That s why we ve cut out the complexity and hassle of borrowing, creating a range of highly flexible loans that you can apply for 24/7. Whether it s for cashflow, asset purchase, expansion plans, commercial property or a wide range of other reasons,we can help with a loan of 5k - 1 million ( 3 million for property development). If you re an established business in the UK with a good track record, follow the simple steps in this guide and you could have the funds you need in a matter of days. We help businesses that: Have 2+ years trading history Are creditworthy: a healthy credit history Have typically a minimum turnover of 50k Have UK ownership and resident directors: majority that are UK resident Requirements for property loans may vary. Please email us at propertyfinance@fundingcircle.com for information. In this guide, learn all about: 1 Our range of loans: which one suits you best? 2 Applying for your loan: a quick and easy process 3 The live loan marketplace: getting the funds for your loan 4 The cost of your loan 5 Accepting your loan 6 Repaying your loan with easy monthly repayments Did you know that the Government-backed British Business Bank is lending through Funding Circle? From March 2014, the British Business Bank programme started supporting lending to small businesses through the Funding Circle platform as part of a 40m commitment from its 300m Investment Programme.* If you take out a Funding Circle loan, up to 10% could be funded by the British Business Bank. * The British Business Bank Investment Programme is a part of the British Business Bank programme, which is currently run directly by the Department for Business, Innovation and Skills and is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. British Business Bank plc will operate as a Government-owned financial institution once HM Government has received European Commission State aid clearance. 2

Section 1 - Our range of loans: which one suits you best? 3 Which loan suits your business? You can borrow anything between 5,000-1 million ( 3 million for property development), repayable over 6 months - 5 years. Choose from our range of flexible business loans: Unsecured loans These are highly flexible loans that can be used for a wide range of purposes, including working capital, expansion capital, asset purchase and more. We will require a personal guarantee (PG) as security. Secured loans These loans can also be used for a wide range of purposes, including working capital, expansion capital, asset purchase and more. Typically we will take a charge over all assets of the business as security. A PG may also be required. Asset finance These loans can be used to purchase a new asset or re-finance an existing one. The title to the asset is held as security by Funding Circle Asset Finance (or alternatively, we can take a charge over it) until the loan is repaid. We can also fund the VAT if required. Property finance These loans can be used for property development and investment purposes, including commercial mortgages. Please contact us to find out more. We typically take a first or second charge over the property(ies). Learn more about our loans and the types of security we accept on our website: www.fundingcircle.com 3

Section 2 - Applying for your loan: a quick and easy process 2 Applying for your Funding Circle loan. Our short application process is all done online, so there s no need for face-to-face meetings when you re busy running your business. Complete the online application at a time and place that suits you at home, in the office or while you re out and about. Your application form The online application can be completed in as little as 10 minutes and is split up into 4 short sections. Complete these sections online: Step 1: Check your eligibility by providing us with your business details. 1 min Step 2: Create your profile so you can log back in to your application. 2 min Step 3: Loan and company details, including the loan amount and information about the business owners. 5 min Step 4: Click Submit application and then we ll just need you to upload some documents. Upload or email your supporting documents You can upload your documents once you have submitted your application, or email them to credit@fundingcircle.com. Most recently filed / formally prepared accounts Last three months of business bank statements We may also request management accounts, depending on the age of your most recently filed / formally prepared accounts. Other supporting documents may also be requested for certain products, or at the discretion of our Credit team. 4

Section 2 - Applying for your loan: a quick and easy process 2 Applying for your Funding Circle loan. Checklist: completing your application Have you done the following? Completed the online application and clicked Submit application? Emailed or uploaded your supporting documents? That s it! You ll hear back from a member of our credit team within 2 working days. Passed the assessment process? It s time to get your funding, which happens via a loan marketplace. Read on to learn more about this stage. 5

Section 3 - The live loan marketplace: getting the funds for your loan 3 The live loan marketplace: investors fund your loan. With over 40,000 investors at Funding Circle, including individuals, local councils, universities and the Government-backed Britsh Business Bank*, the marketplace allows everyone the chance to participate in your loan. How it works: The process is simple: once your loan application has been approved, the credit assessment team will give your loan a risk band. All successful loan requests are then automatically listed on the marketplace, which is where the funding process happens. Registered Funding Circle investors will then start offering amounts of money to fund your loan. The interest rate you pay back to the investors who lend to you will typically depend on the risk band and term of the loan, with interest rates starting at 6%. Your loan can be funded by several hundred investors offering small amounts, or by one large financial organisation offering you the whole amount. Your loan can fund over a period of up to 14 days, although most loans fund in just a few days. As soon as it s 100% funded you can accept your loan online. Please note that all required documents must be received before funds are released read more about this in section 5. Answering questions from investors A key part of the funding process is the question & answer section, where investors may ask you questions to help inform their lending. When this happens, you ll receive an email alert and it s important to answer these questions quickly and with as much detail as you can. This may lead to more investor participation in your loan, which can speed up the process. You can see these questions and answer them in your account. The Q&A section: A valuable part of the funding process Mark Thompson is Director of Funky Junk Ltd and comments on the value of the Q&A section: When our loan was funding, a lot of the questions asked were very intelligent, a few of which made me stop and think, well, that s a very good point. In a way, it felt as though we had a relationship with a whole bunch of people out there who were urging us on. 6

Section 1 - The cost of your loan 4 What is the cost of my loan? Loans are typically repaid in equal monthly instalments and the cost is determined by two factors: Your interest rate: this is set during our credit assessment process and depends on the risk band and term of the loan. Your fee: you only pay one fee, and only if you decide to accept the loan. There s no cost if you decide not to progress with it. Loan type Loan term Fee Unsecured and secured business loans A+ risk band A / B / C / D / E risk bands 6 months - 1 year 2% 3% 2-3 years 3% 4% 4-5 years 4% 5% Asset finance 2-5 years 5% Property finance 6 months - 5 years 2% For example, if you take out an unsecured loan of 50,000 over 3 years, and your business is allocated to the A+ risk band, the fee you would pay is 3%. This means you receive 50,000-1,500 (fee) = 48,500. Based on a 50,000 loan over 3 years, repaid in 36 equal monthly payments: Cost (rate) Cost (amount) Interest (annual rate) 7.75% 6,198 Fee 3% 1,500 Total cost interest + fee 7,698 Monthly repayments 1,561 NB: If a loan is repaid early the interest charges will be lower. Your monthly repayments will consist of principal outstanding and interest. The interest is based on the principal outstanding, so decreases as a proportion of the repayment over the loan term. If for some reason you are unable to make your monthly repayment on time, we may charge an administration fee of up to 15% of the repayment amount. 7

Section 1 - Accepting your loan 5 Ready to accept your loan? Here s how. 1. Accept your loan online As soon as your loan s 100% funded, you can accept your loan online at any time until the end of the listing period. You then have up to 5 working days to accept. Complete this process in a few short steps: a. Begin acceptance process Login to your account and click on the begin acceptance process button in your account summary. This will take you through to your loan contract. b. Agree to the loan contract Your loan contract will be displayed online for you to review. You should also download the contract at this point for your records. To agree to the contract, put a tick in the checkbox below the contract then click Accept terms. c. Set up repayments All Funding Circle loans are repaid via direct debit. You ll be asked to agree to this method of payment and fill in an online direct debit form. To complete this step, place a tick in the checkbox to state that you agree and click Next. d. Transfer funds to your business bank account 2. Send any required documents back to us All loans require a direct debit to be set up and most also require a personal guarantee or other security agreement. Our credit team will email the documents we require for your loan with details of who needs to sign them. We need these signed original documents returned to us by post before we can release your loan. We pay your loan the same day we receive everything from you. As long as you ve completed the online acceptance process and we ve received your signed documents by 3pm on any working day, we pay the loan into your designated business bank account the same day. (NB: funds can take up to 3 days to reach your account). 8

Section 1 - Repaying your loan with easy monthly repayments 6 Repaying your loan. One simple monthly repayment Loans are usually repaid in equal monthly instalments over the term you choose for your loan, via direct debit. Repayment amounts for property loans may vary. Important note: Your monthly repayment to investors will fall one calendar month after you accept the loan, if accepted early, or from when your loan request closed. The direct debit is taken 5 working days before this date, to ensure funds are received from you in advance of the payment to investors. Repaying your loan early? No problem. You can repay the full amount early at any time with no penalties. Simply make the final payment for the balance owing on your loan, including interest owing for that month. Need a second loan? You can also take out a second loan before you ve finished repaying your first. Typically, 3 months repayments are required on your first loan before applying for your next one. (NB: excluding asset finance loans, where second loans can be applied for immediately after the first). 9

We hope this guide has been useful. If you have any questions on Funding Circle loans, take a look at our help centre online or call us on: 020 7401 9111 (Monday Friday, 9am 6pm, exc. Bank Holidays). Funding Circle Limited is authorised and regulated by the Financial Conduct Authority and entered on the Financial Services Register under firm registration number 635439. Funding Circle is not covered by the Financial Services Compensation Scheme. Registered in England (Co. No. 06968588) with registered office at 71 Queen Victoria Street, London, EC4V 4AY.