We’ve had a few successful fund raises through crowd funding recently (you can see them all on our Funding Wall) and, from speaking to those looking at raising finance through the platform, it seems there are a few frequently asked initial questions.
With this in mind, we decided to compile a few of the question’s we are regularly asked and provide a few answers at the same time…
What does the application process involve?
An application is processed online in a few easy steps answering questions in a short format on the following topics:
- What the business does;
- Why the business is safe to lend to; and
- What the funding is for.
These sections are limited to a set number of characters giving a quick overview to investors and relieving business owners from the task of providing a full blown business plan.
Along with this, credit checks on the directors will be required as will statutory accounts and the latest management figures of the company.
What can the funding be used for?
Restrictions on funding are relatively minimal with applications accepted for expansion capital, working capital requirements and even commercial property transactions.
How much can a company borrow?
Platforms such as Funding Circle currently manage loans from as small as £5k right up to £1m.
How long is the term of the debt?
Loans can be repaid over a term between 6 months and 5 years and there is no penalty for early redemption.
Who can apply for funding?
The rules for listing on the site are relatively straightforward. Any entity applying for finance must satisfy the following criteria:
- Be either a Limited company or Limited Liability Partnership (LLP)
- Have annual turnover of at least £100k
- Must have at least two years’ statutory accounts filed at Companies House
- The majority of directors must be UK resident
- The company can have had no substantial CCJ’s against it
- The credit rating must be a good one
Got a crowd funding question we haven’t covered?
Just ask, it’s our job to know these things. Either use the live chat function to the left of our site or use any of the contact details below.