What are the best alternatives to Funding Circle?

Why consider alternatives to Funding Circle?

Funding Circle is the UK’s largest peer-to-peer small business lender by loan volume and has a strong track record — but it is built around a specific type of borrower: established businesses with at least two years of accounts, no major credit events, and a need for a fixed-rate term loan.

If you fall outside that profile — whether because you’re newer, faster-growing, have had a difficult year, or simply need money quicker — there are compelling alternatives. The UK SME lending market has matured significantly and competition has driven innovation in speed, structure, and accessibility.

This guide covers seven alternatives, each offering something Funding Circle doesn’t.

Top Funding Circle alternatives

1. iwoca — Best for speed and shorter-term borrowing

iwoca offers Flexi-Loans up to £500,000 with decisions typically within hours and funds available the same day or next day. Its credit line structure allows you to draw what you need and repay early without penalty, making it far more flexible than Funding Circle’s fixed term loan model.

Rates and amounts: From approximately 2% per month; £1,000–£500,000; 1 day–24 months.

Eligibility: 12 months trading, £30,000+ annual turnover; considers businesses with some credit impairment.

Pros: Very fast decisions and funding; flexible drawdown; no early repayment charge; tolerant of imperfect credit histories.

Cons: Rates are higher than Funding Circle for equivalent borrowers; shorter maximum term (24 months vs 6 years); less suitable for large capital expenditure loans.

Best for: Businesses that need working capital quickly, want to repay early, or cannot wait 1–3 days for a Funding Circle decision.

2. Fleximize — Best for flexibility and top-up borrowing

Fleximize lends £5,000 to £500,000 on both secured and unsecured terms, with repayment terms up to 60 months. Its standout feature is the ability to top up an existing loan after three months without closing the current facility — useful for businesses with growing capital needs. Repayment holidays are also available, unlike at Funding Circle.

Rates and amounts: From 0.9% per month unsecured; £5,000–£500,000; 3–60 months.

Eligibility: 6 months trading, £60,000+ annual turnover.

Pros: Top-up facility after 3 months; repayment holidays; no early repayment charge; faster decisions than Funding Circle; accepts 6 months trading.

Cons: Rates higher than Funding Circle for strong borrowers; secured lending requires property as collateral.

Best for: Growing businesses that want a lender able to scale their facility upwards without requiring a full refinance.

3. LendingCrowd — Best for competitive peer-to-peer rates

LendingCrowd is a Scottish-based peer-to-peer lender offering term loans from £25,000 to £500,000. Like Funding Circle, it matches borrowers with investors, but it tends to take a more personalised underwriting approach and can sometimes offer rates that undercut Funding Circle for well-established Scottish and UK businesses.

Rates and amounts: From approximately 7.95% APR; £25,000–£500,000; 6 months–5 years.

Eligibility: 2 years trading, profitable or near-profitable, UK registered.

Pros: Competitive rates for strong borrowers; personalised service; no early repayment charge; fixed monthly repayments.

Cons: Slower decisions than fintech lenders; smaller loan book means less certainty of funding; less brand recognition than Funding Circle.

Best for: Established profitable businesses wanting to compare peer-to-peer rates before committing to Funding Circle.

4. BizcCap — Best for same-day funding

BizcCap uses open banking to make rapid credit decisions, often within hours, with same-day or next-day funding in most cases. Its minimum requirements are lower than Funding Circle’s, accepting businesses from 6 months of trading.

Rates and amounts: From 1.5% per month; £5,000–£250,000; 3–24 months.

Eligibility: 6 months trading, £5,000/month average turnover; open banking access required.

Pros: Same-day or next-day funding; open banking simplifies application; accepts early-stage businesses; no early repayment charge.

Cons: Rates higher than Funding Circle; maximum loan lower (£250,000 vs £500,000); shorter maximum term.

Best for: Businesses that cannot meet Funding Circle’s 2-year trading requirement or need money faster than Funding Circle can move.

5. Capify — Best for businesses with adverse credit

Capify offers both term loans and Merchant Cash Advances to businesses that have been declined by mainstream lenders. It considers CCJs, thin credit files, and shorter trading histories, making it one of the most accessible options in the market.

Rates and amounts: Factor rates from 1.2; loans from £5,000–£500,000.

Eligibility: 6 months trading, £10,000+ monthly turnover; adverse credit considered.

Pros: Adverse credit accepted; fast decisions; minimal documentation; MCA option for revenue-based repayment.

Cons: Higher total cost of borrowing than Funding Circle; factor rate structure requires careful comparison; not suitable for long-term capital investment.

Best for: Businesses declined by Funding Circle due to credit history that still need access to working capital.

6. Start Up Loans — Best for early-stage businesses

Start Up Loans is a government-backed scheme offering unsecured loans at 6% fixed APR — cheaper than any commercial lender including Funding Circle. The scheme has no minimum trading requirement and pairs every loan with 12 months of free mentoring.

Rates and amounts: 6% fixed APR; £500–£25,000 per applicant (up to £100,000 per business); 1–5 years.

Eligibility: Pre-revenue or early-stage; no minimum trading period; business plan required.

Pros: Lowest rate available in UK market; government guarantee; free mentoring; no arrangement fee.

Cons: Maximum £25,000 per director; requires full business plan and cash flow forecast; 6–10 week decision process; recorded on personal (not business) credit file.

Best for: New businesses ineligible for Funding Circle’s 2-year trading requirement that need affordable startup capital.

7. Capital on Tap — Best for revolving credit alongside term loans

Capital on Tap provides revolving credit facilities and business credit cards up to £250,000. Unlike Funding Circle’s fixed term loan, Capital on Tap works more like an overdraft — draw when you need it, repay as cash allows, and earn cashback on spending.

Rates and amounts: From 14.9% APR (credit card); revolving credit from 15.9% representative APR; up to £250,000.

Eligibility: 12 months trading, £50,000+ annual turnover.

Pros: Revolving structure for flexible cash flow management; instant decisions for returning customers; rewards and cashback; no early repayment charge.

Cons: Rates higher than Funding Circle for equivalent borrowers; lower maximum amount; not suitable for large capital expenditure.

Best for: Businesses that already have or plan a Funding Circle term loan and need a separate revolving facility for day-to-day working capital.

Comparison table

How to choose the right alternative

Choose iwoca if you need money in 24 hours, want to repay early without penalty, or have been trading for just over a year.

Choose Fleximize if you want the option to top up your facility in a few months or need a repayment holiday built into your agreement.

Choose LendingCrowd if you’re a profitable, established business looking to genuinely compare peer-to-peer rates before signing with Funding Circle.

Choose BizcCap if you’ve been trading 6–23 months and need a decision and funds the same day.

Choose Capify if you’ve had credit difficulties that have led to a Funding Circle decline.

Choose Start Up Loans if you are pre-start or early stage and want government-backed capital at 6% with mentoring included.

Choose Capital on Tap if your primary need is a revolving credit line rather than a fixed term loan — particularly if you spend on business expenses regularly and can earn cashback.

When in doubt, use a whole-of-market broker to compare across lenders with a single soft search — no credit footprint, no commitment.