Funding Circle fees

Funding Circle fees

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A client needs to borrow to fund a large asset purchase (around £280k). He has a couple of quotes from mainstream asset finance providers but I offered to look at alternative providers. I've been looking at Funding Circle, which is the biggest of the business finance peer to peer lending operations. The indicative interest rates are very similar to what he's been quoted elsewhere (although I accept that the actual rate depends on the 'auction' process), but Funding Circle's fee is at such a level that it makes this a non-starter in my view (£14k). The mainstream lenders charge an arrangement fee of a few hundred pounds.

Am I missing something here? Both the client and myself would love to bypass the banks, but a 5% arrangement fee makes Funding Circle a very expensive option. Should these alternative providers be viewed as lenders of last resort, as it were?  

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John Toon
By John Toon
22nd Feb 2013 13:59

As an investor at Funding Circle I'm not sure I would class alternative providers as a lender of last resort. They aren't quite in the pay-day loan sector!!

But the long and short of it is that if the terms and conditions of the offers your client has received are all the same then the decision on who to borrow from comes down to the overall cost of borrowing surely?

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