Frequently Asked Questions

General Q&As

What are Funding Circle and Funding Circle Notes Program?

Funding Circle USA, Inc. and affiliates (collectively Funding Circle USA) is a leading online marketplace for small business loans. Using cutting-edge technology, established small businesses who want to borrow are matched with investors who want to lend in the US.

Funding Circle USA is the parent company of Funding Circle Notes Program, LLC (FC Notes Program)1.

FC Notes Programs issues borrower payment dependent notes (Notes), a securitized loan asset that provides an investor with a security interest in a fractional portion of a loan. FC Notes Program works exclusively with institutions and accredited investors.

What should I know before I invest with FC Notes Program?

Investing in small business loans carries risk. Returns are not guaranteed and some loans will default. A diversified loan portfolio may enable you to spread your risk among many borrowers. We encourage investors to build a portfolio of at least 100 diverse loans.

How does Funding Circle make money as a company?

Funding Circle USA charges borrowers an origination fee of 3.49% to 7.99% on a funded loan. FC Notes Program also charges investors a servicing fee on the unpaid principal balance of outstanding loans.

How is the investor servicing fee applied?

The 1.00% servicing fee2 is applied as a 1/12th of 1% (0.083%) monthly fee on the unpaid principal balance of outstanding loans, which we deduct from the payment for each loan every month.

Why do borrowers choose Funding Circle USA?

We offer competitive rates, manageable repayment schedules, and provide each applicant with a dedicated account manager to guide them through our quick and easy online application. We work hard to make our loans as user-friendly and convenient as possible.

How does Funding Circle USA differ from a bank in offering loans?

For small businesses, we know that time is money. Unlike a bank, our application process is quick, easy and transparent. Borrowers can apply for a loan online in just 10 minutes, find out they are approved in as little as 24 hours and get the money in as few as 5 days from acceptance of the offer. We also know that a credit score isn’t the only indicator of a healthy business. While the underwriting process at traditional banks is clunky and inflexible, we combine technology and big data with seasoned small business underwriters to better understand the businesses we lend to and find terms that suit their needs.

What differentiates Funding Circle USA from other marketplace lenders?

Many things. However, if we needed to narrow the list down to three primary ways that Funding Circle USA stands out as a marketplace lender, we would highlight:

  • We focus exclusively on small businesses lending
  • Our platform leverages both technology and the human expertise of our seasoned team of underwriting professionals
  • Our loans are secured by the business assets of our borrowers (perfected by a UCC-1 financing statement3), and we also require the business proprietor to execute a personal guarantee

What are your loan terms and rates?

Our loans are secured, fully-amortizing small business term loans. They range from $25,000 to $500,000, have 6-month to 5 year terms, and rates typically span between 4.99% and 27.79%.

What do you expect your loan volume to be this year/next year?

Funding Circle US, Funding Circle UK and their affiliates are, cumulatively, a leading small business marketplace and have originated more than $5 billion in loans globally since inception. Our loan origination rate has grown continuously every year, and we anticipate those volumes to continue to grow over time.

What happens if Funding Circle goes out of business?

FC Notes Program has been organized in a manner that is intended to minimize the likelihood that it (i) will become subject to a voluntary or involuntary bankruptcy proceeding or similar proceeding or (ii) would be substantively consolidated with Funding Circle USA in the event of Funding Circle USA’s bankruptcy. However, if the FC Notes Program becomes subject to a bankruptcy proceeding, the rights of noteholders could be uncertain and payments on the Notes may be limited or suspended.

Ways to Participate

How can I participate on the marketplace?

FC Notes Program offers two options for building a diversified portfolio of Notes on the marketplace. Login to pick and choose Notes that suit you, or set your desired investment criteria for Notes and your portfolio will build automatically. It’s your choice.

1) Login to browse & select investments

Investors can browse through FC Notes Program’s marketplace to view listed loans and purchase Notes issued by the FC Notes Program. Loans are listed daily at 1pm PT with a one hour preview period beginning at 12pm PT.

2) Enroll in automated investing

Investors on FC Notes Program’s marketplace can set their desired investment criteria and automatically build a diversified portfolio of Notes by enrolling in automated investing.

How do I set up automated investing?

Investors can enroll in FC Notes Program’s automated investing program with these three easy steps:

  1. Authorize investment for specific maturities and Funding Circle Ratings.

  2. Specify a maximum amount to commit per series of Notes (must be units of $500 and no more than your set max per loan amount).

  3. Turn the automated investing program on.

Once these investment criteria are set, the platform will automatically build the investor’s portfolio. We reserve a portion of all loans and allocate on a pro rata basis prior to listing on the marketplace. Investors can therefore gain exposure to Notes corresponding to borrower loans that meet their investment criteria – without having to login!


What is an Accredited Investor?

Under the Securities Act of 1933, a company that offers or sells its securities must either register the securities with the SEC or offer the securities under an exemption from the registration requirements. Notes offered by FC Notes Program are not registered; FC Notes Program uses the exemption allowed by Rule 506(c) of Regulation D to offer its securities. Therefore, FC Notes Program may sell its securities only to accredited investors, a term defined in Rule 501 of Regulation D.

Generally, to qualify as an accredited investor, an individual must satisfy one of the below conditions:

  • earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the last two years, and reasonably expects the same for the current year, OR
  • has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

You can find more details here.

You’re requesting a lot of personal information. Why should I trust you?

FC Notes Program takes your privacy very seriously, and will never share or sell any of your personal information without your consent. We have created a privacy policy specifically addressing our collection and use of information, available here.

Why are you asking me for so much documentation?

FC Notes Program markets its offerings to the public through general solicitation. In order to use the SEC definition of general solicitation and still qualify for an exemption from securities registration, FC Notes Program offers its securities under the exemption provided by Rule 506(c) of Regulation D. Rule 506(c), created as a result of the 2012 JOBS Act, includes explicit requirements for verifying the accredited status of investors participating in private securities offerings (full text of the rule can be found here).

I’ve invested in other private placements, and I’ve never had to provide this before.

Prior to the 2013 adoption of Rule 506(c), it was common practice for issuers and broker-dealers to accept self-certification as a means of verifying the accredited status of investors. Today, in fact, issuers who do not actively market their securities and only make offerings to investors with whom they already have relationships may use the Rule 506(b) exemption. Under 506(b), self-certification is still an accepted practice.

The 506(c) rules, however, are very clear, and explicitly do not allow self-certification. If you have self-certified your accredited status for private investments in the past, you likely invested under one of the following scenarios:

  • The issuer was not engaged in general solicitation, and was using the 506(b) exemption, or another exemption which allows self-certification;
  • The investment took place before Rule 506(c) became effective; or
  • The firm or issuer you invested with has not updated its procedures in accordance with the new rules.

We realize that our requirements may seem onerous. However, FC Notes Program prides itself on its compliance program, and believes that full and strict adherence to regulations is essential to protect both our investors and borrowers, and build a sustainable business.


What is the investment minimum to open an account?

The minimum investment to open an account on the marketplace is $250,000.

Is there a secondary market for Notes?

We do not have a secondary market at this time. It is possible that we may launch a secondary market in the future, but investors should invest with the intent and expectation of holding purchased Notes until maturity.

When are new loans listed?

New Notes are listed daily. There is a one hour preview period at 12PM PT before loans go live on the marketplace at 1PM PT.

What is the minimum amount I can invest in a fractional interest in a loan?

The minimum amount is $500 per Note.

When are the loans funded?

Loans are funded the first business day following the initial listing date. Investors pay only the par value of the loan, even if several days of interest have accrued. This means - investors purchasing Notes on the Marketplace will receive a pro-rata share of previous accrued interest at no additional charge!

Why is a portion of every loan listed on the marketplace already sold?

The marketplace serves three different primary groups of investors, each with different investment mandates and objectives: 1) investment funds and/or institutional investors, 2) Automated Investing participants, and 3) pick and choose participants. FC Notes Program reserves a portion of every Note listed on the marketplace for each of the three groups, ensuring that investors in each group can participate. Fund, institutional, and automated investing allocations are made prior to loan listing on the marketplace for pick and choose investors (i.e. this is why a portion of every listed loan is already sold).

Do you have API capabilities for investing in the marketplace?

Yes. Funding Circle’s Application Programming Interface or API was built using REST to assist with fast and efficient access to your data. We’ve created multiple endpoints allowing you to see information about your holdings, pending orders, portfolio and transactions, as well as allowing you to view and purchase current listings. For more information on our API capabilities, click here.

Automated Investing Platform

Do you have automated purchasing capabilities?

Yes. We have an automated investing option that all marketplace investors can use at no additional cost. It allows investors to specify term and risk band criteria that they would like to automatically purchase. You can turn on automated investing once your account is open by completing the form provided in your Investor Portal.

How does your Automated Investing program work?

Automated Investing is open to any and every marketplace participant. Investors are provided a form to complete, wherein they authorize FC Note Program to make an investment on their behalf, up to a maximum amount per Note (specified by the investor) for each Note that meets the investor’s specified term and/or risk-band criteria. There is no cost to participate, and it can be canceled any time.

Will I receive the maximum amount per Note that I specified with automated investing?

No. FC Notes Program reserves a portion of every Note for Automated Investing participants, and treats all Automated Investing participants equally regardless of their sign-up date. In situations where the cumulative requested purchases via the Automated Investing program exceed the dollar amount of the loan reserved for Auto-Invest participants, each Automated Investing participant will be invested pro-rata relative to their specified maximum purchase amount.

For example, let’s say that a new Note to be listed on the marketplace had $40,000 reserved for Automated Investing participants, and the cumulative authorized purchases via the auto-invest program were $80,000. In this scenario, each Auto-Invest participant whose criteria authorized investment into this loan would have 50% ($40,000/$80,000) of their maximum authorized purchase amount invested into the loan.

Individual Retirement Account (IRA)

Can I invest with an IRA?

FC Notes Program welcomes investments via traditional or Roth IRAs. Combine the benefits of FC Notes Program returns with the tax advantages of an Individual Retirement Account by opening a FC Notes Program self-directed IRA. Self-directed IRAs are offered in partnership with our preferred third-party custodian, STRATA Trust Company (STRATA).

How do I set up a self-directed IRA account with STRATA Trust Company?

Our investor relations team will work with you to set up your self-directed IRA account with STRATA Trust Company. You will be able to electronically sign and complete the necessary documents.

How long does it take to set up a self-directed IRA account with STRATA Trust Company?

Once our investor relations team has submitted the necessary documents, it typically takes 1-2 business days to set up the account and about 10-14 days to fund the account with a direct transfer from another IRA.

Are there additional costs associated with opening an IRA account?

Our third-party custodian STRATA charges fees for administering each FC Notes Program self-directed IRA. However, FC Notes Program will pay all of your first year STRATA fees as well as select recurring fees in subsequent years if your STRATA account is used exclusively to hold Notes placed by FC Notes Program.

Borrowers and Underwriting

How would you describe the underwriting services offered by Funding Circle USA?

Underwriting is the core of the Funding Circle USA brand business, and every loan is analyzed by our dedicated team of seasoned underwriters, who bring years of industry experience in small business loan underwriting (typically acquired at a regional or community bank). Our process is unique because we take a holistic approach to understanding small business credit worthiness. We analyze each borrower using both our proprietary credit models (that process big data) and human judgment/review, which we believe is critical to our ability to understand the nuances of each small business and to determine if it is creditworthy.

What are the minimum requirements for a business to qualify for a loan?

We evaluate businesses based on operating their history and the FICO scores of their proprietors, among other criteria. There are minimum threshold requirements for a business to be considered. All businesses are located in the US.

Are loans secured? What collateral do you require?

Every loan is secured by the collateral of the business (perfected by a UCC-1 financing statement3), and we also require the proprietors of the business to execute a personal guarantee. Collateral can include, but is not limited to, equipment, vehicles, accounts receivable, and inventory.

What does Funding Circle USA do to prevent borrower fraud?

Funding Circle USA seeks to detect and mitigate fraud by using a variety of tools to help us determine 1) whether the applying proprietor is a real person, 2) whether the borrower is a real business, and 3) whether we can link the proprietor to the business. Examples of what we look for include multiple names or SSNs, an address match across data sources, web presence (if applicable), LexisNexis business and personal reports, etc.

In addition, underwriters use a proprietary fraud scorecard to help identify potentially fraudulent loan applications. All signatories to a loan must successfully answer a set of knowledge-based authentication questions that are multiple-choice questions pulled from public records and used to confirm the identity of the proprietor(s) and the applicants prior to receiving funding.

Prepayments, Delinquencies and Defaults

Do you service your own loans?

FC Marketplace, LLC (a subsidiary of Funding Circle USA) is the servicer of record on every loan we underwrite and originate. However, we do utilize partners or sub-servicers to service the loans. For example, we work with a servicer to conduct the day to day servicing operations (e.g. borrower ACH debiting and cash management), and we also work with multiple debt recovery and workout firms.

What do your sub-servicing providers do?

Our sub-servicer currently performs customer introduction communications, loan portfolio reporting (including the delivery of cash transactions reports to Funding Circle USA), payment processing, borrower customer service, delinquency and default management, and other debt and loan collection services on Funding Circle USA’s behalf.

What is your prepayment policy on the loans?

We do not charge our borrowers a prepayment penalty.

Are there any late payment or default fees?

Funding Circle USA may assess a late fee, but this fee is used to help cover the incremental costs of collecting a late payment; investors receive 50% of the late payment fee, distributed based on the individual ownership percentage of the loan.

What procedures do you have in place for portfolio management?

Funding Circle USA closely monitors our loan portfolio and strives to identify potential payment issues before missed payments occur. Funding Circle USA periodically obtain borrowers’ Commercial Credit Reports which reflect any additional debt that a borrower has incurred. In addition, Funding Circle USA is periodically in contact with borrowers to discuss topics regarding the state of their business.

When a monthly ACH debit fails, our sub-servicer contacts us the same day. Based on the Borrower’s willingness to engage with us, Funding Circle USA unilaterally determines whether to have our sub-servicer continue the collection effort or whether it should take over all forward communications.

How will I be notified and kept informed when a loan is delinquent?

When a business does not make a scheduled loan payment on time, Funding Circle USA updates the Payment status on our Investor Portal accordingly. Additional information for any loan with a Late or Defaulted status can be found in the Notes section of the Loan information tab of each respective listing.

How do you work with borrowers whose payments are delinquent?

Open communication is key to our portfolio management process—we seek transparency from our borrowers about the facts and circumstances of their current and anticipated financial situation that inform our decisions so that we may work together to resolve payment issues as they arise, and/or establish reasonable solutions for delinquent borrowers with the objective of maximizing recoveries for investors.

What happens when a borrower defaults?

Funding Circle USA has an in-house Servicing, Recoveries and Collections Team who is responsible for leading internal servicing and collections efforts. Our collections efforts seek to maximize recoveries for investors. For certain delinquent loans, Funding Circle USA expects to leverage third-party collection firms for technical expertise relating to litigation, bankruptcy and enforcement of security. All third-party collections firms will be required to meet Funding Circle USA’s data security requirements. We will negotiate industry-standard commission and fee structures for all third-party collections firms that we engage.

What happens if a borrower/business proprietor or primary guarantor passes away?

We will contact the estate and/or additional guarantors on the loan to discuss continued payment of the loan.

What happens when the business or the individual guarantor files for bankruptcy?

When we receive notice of a bankruptcy filing on either the business or individual guarantors, an automatic stay immediately halts all of our contact and collections activities with the business and/or individual guarantors. Accordingly the loan is defaulted and we must wait for the bankruptcy proceeding to finish. Once the bankruptcy is either dismissed or discharged by the court, Funding Circle USA may commence legal action against the entity which did not file for bankruptcy (this is because of the dual UCC-1 and the personal guarantee).

How do you use the personal guarantee in recoveries?

We are committed to having the best collections and recoveries process in the industry — ensuring investors feel confident in investing in businesses on our platform. As part of this, we’ve designed an open, honest and transparent collections process that provides us with multiple paths to pursue a resolution. That’s why, in addition to filing a UCC-1 against a business’ assets, we also require business owners to provide a personal guarantee.

A personal guarantee gives us the right to also go after personal assets — such as real estate, savings, or other valuables – should a business default on their loan. Research has also shown that borrows with personal guarantees are more likely to continue to repay their loan, especially ahead of other debts they may have.

If a borrower cannot or will not pay for their arrears, we will leverage all Fair Debt Collection Practices Act compliant collections processes up to and including filing a lawsuit against the borrower to obtain judgment. Our approach is always one of cooperation to resolve these situations.

Taxes and Reporting

This section is provided for informative purposes only, please contact your tax professional for additional questions or concerns.

What does reporting on the marketplace look like?

Investors receive account statements on a monthly basis that detail information including portfolio holdings, payment history, and unpaid principal balance.

Do you withhold any taxes when loans are sold on the marketplace?

No, Funding Circle USA does not withhold any taxes. Please consult your tax professional to address your specific taxation requirements.

What tax forms do you provide investors?

Funding Circle USA provides investors on the marketplace with Tax Form 1099.


What is Phishing?

Phishing is a method used by fraudsters to access valuable personal details by purporting to be Funding Circle USA. Phishing communication can involve the sending of emails, letters, text messages or even phone calls.

How to recognize phishing:

Email communication from Funding Circle USA will always have as the domain name. If the domain name has been varied in any way, including the capitalization of certain letters, this may indicate that the person purporting to be an employee of Funding Circle USA is a fraudster. However be aware, fraudsters can falsify (spoof) the ‘from’ address to look like a legitimate Funding Circle USA Address.

Communication from Funding Circle USA or FC Notes Program will:

  • Never ask you to verify both your username and password, whether over the phone or by email.
  • Never ask you to disclose personal or payment information by email.
  • Always refer to its customers by their name, and will not begin greetings with wording such as Dear Customer or Dear Valued Customer.
  • Never send links, other than in answer to any question directed to our Customer Service team, in any email.

What should you do if you suspect phishing:

Unfortunately, in the majority of cases, Funding Circle USA will be unable to recover any monies paid over in a scam. However, we do take phishing very seriously, and involve third-party organizations to take down websites where required.

If you suspect that you have been a victim of phishing, please contact one of our Customer Service representatives at or (855) 849-1940.

Alternatively, you may wish to report your incident immediately to the FBI’s Internet Crime Complaint Center (IC3) on their website

[1] Affiliates of Funding Circle USA, Inc. include Funding Circle Securities, LLC, a broker-dealer registered with the SEC and a member of FINRA and SIPC.

*[2]Subject to change

[3]A UCC-1 financing statement is a legal form a creditor files to give notice that it has or may have an interest in the property of a debtor.

No communication, through this website or in any other medium, should be construed as a recommendation for any security offering. This website provides general and preliminary information about securities offered by FC Notes Program and is intended for initial reference purposes only. It is not a summary or compilation of all applicable information and is not complete. This website does not constitute an offer to sell or buy any securities. There shall be no offer or sale of any securities without the delivery of confidential offering materials (the Offering Materials) and related documents. This information contained herein is qualified by and subject to more detailed information in the Offering Materials.