The Fundamental Guide to Funding Circle

Transcription

1 The Fundamental Guide to Funding Circle For Referral Partners fundingcircle.com

2 Referral Partner Program Welcome to Funding Circle As the world s leading marketplace for small business loans, Funding Circle helps established small businesses in the US, UK and Europe quickly access affordable financing. Our roots are in small business, and our co-founders experienced firsthand the difficulty of obtaining a business loan when they tried to expand their chain of successful fitness centers. After being turned down or offered terms that simply didn t make sense by more than 90 traditional lenders, they realized something was broken. So they set out to build a better financial system with a true focus on small businesses. Since our founding in 2010, we have helped more than 15,000 small businesses access over $2 billion globally but we re just getting started. We re excited to work with you to introduce your small business clients to our fast, affordable financing options. I needed to find a lender that actually believed in my ability to be a fruitful entrepreneur. Dr. Celina Hatt Pawsh Place Veterinary Care, Funding Circle borrower 2

3 Table of contents Referral Partner program Choosing your commission structure Earn additional benefits 4 Rates & terms Costs to borrower 6 Our lending criteria Minimum credit criteria Industries Use of proceeds 7 Submitting an application Required documents Verification documents (as necessary) 9 FAQ 10 Contact us 16

4 Referral Partner Program As a Funding Circle Referral Partner, you re part of an exclusive group of commercial finance professionals who can offer their clients access to fast, affordable financing that will actually help their business grow. As one of our valued partners, you also have access to our: Custom online portal Submit a client s application in just 10 minutes or monitor their progress when they use your affiliate link. Dedicated Relationship Manager Direct access to a financing specialist to answer all your questions and keep your deal flow running smoothly. Professional development resources Participate in weekly webinars and access materials that will help you close more deals in less time. Flexible commission structure Choose the commission structure that works best for you and your firm. With Funding Circle, I have an ongoing relationship with great people whom I enjoy working with. The product is top-notch, and my questions are always answered quickly. Bernard Whitley BW Capital Solutions, Funding Circle partner 4

5 Choosing your commission structure The Legacy Program Under the Legacy Program, you automatically receive 1.50% commission within 48 hours of every funded loan you refer. You may choose to charge your client additional fees, but you are responsible for invoicing and collecting the outside fees while complying with applicable laws. The Premier Program Under the Premier Program, you receive 3.00% commission within 48 hours of every funded loan you refer. You must agree to give Funding Circle up to 10 business days to make a credit decision before showing the deal to other lenders, and you may not charge your client any outside fees. Example for a $250,000 loan The Legacy Program The Premier Program Amount client receives $241,275 $237,525 Client s origination fee (subtracted from $250,000 loan) You earn $8,725 + additional fee, if you choose to add $3,750 + additional fee, if you choose to add $12,475 $7,500 Earn additional benefits If you attend all six of our core teach-in webinars (hosted Wednesdays at 1pm PT) and/or fund more than $1 million in loans on our platform in a calendar year, you can qualify for additional benefits including: Priority underwriting status Access to additional proprietary resources Increased commission rates (in Legacy Program) 5

6 Rates & terms Access to affordable capital can have a tremendously positive impact on a small business. As a Funding Circle Referral Partner, you now have the opportunity to offer your clients one of the best financing options on the market. Here s a short list of what makes Funding Circle loans so attractive to small businesses: Affordable term loans $25,000-$500,000 Only one origination fee: 3.49% or 4.99% Annual interest rates from 5.49%-27.79% NEVER any hidden fees or prepayment penalties Monthly payments with 1-5 year terms Funding in under 10 days Costs to borrower 12 months 24 months 36 months 48 months 60 months Annual interest rates 5.49% to 23.29% 7.99% to 25.79% 8.99% to 26.79% 9.79% to 27.79% 10.49% to 21.29% Origination fee 3.49% or 4.99%* A one-off fee to cover the costs of evaluating and originating the loan. This fee is deducted from the total loan proceeds at the time of funding. *Dependent on your commission structure. See previous page for details on the legacy and premier options. 6

7 Our lending criteria We know that a successful business cannot be summed up by a single number, which is why our underwriters take a holistic view of each applicant s business considering everything from cash flow and credit history to online customer reviews. To help you find clients that are most likely to get funded on our marketplace, here is our basic eligibility criteria. Minimum credit criteria Borrower FICO Business revenue (most recent year) Business net income Years in business 620 $150,000 $0 (at least 1 of last 2 years) 2 years No history of criminal or bankruptcies within 7 years. Quick tip: Use this list to pre-screen your clients, so you don t waste time on applications that may ultimately be declined. You can also quickly check a client s eligibility in just 60 seconds using your Partner Portal. Industries Examples of industries we lend to Restricted industries and business types Agriculture Commercial and professional services / IT Construction Food and restaurant services Healthcare and social assistance Manufacturing Professional, scientific, and technical services Retail and e-commerce Tourism Sole proprietorships Non-profits Pawnbrokers Pornogrophy or adult entertainment Firearms dealers Marijuana-related businesses Real estate development Car dealerships where financing arm accounts for >25% of annual gross revenue...and many more! 7

8 Use of proceeds Below are examples of acceptable and prohibited ways for your clients to use their Funding Circle loan. Neither list is comprehensive, so please contact your Relationship Manager with any questions. Acceptable uses of proceeds Unacceptable uses of proceeds Purchasing inventory Purchasing equipment Hiring new employees Purchasing supplies and materials Closing an accounts receivable gap Launching a new marketing campaign Leasehold improvements Management buy-out Only for C-corporations that can hold treasury stock* Opening an additional business location* Acquisition of another business* Speculative ventures Property development, real estate development, commodities trading Refinance of personal debt Lending to others Auto-financing, pawnbrokers, insurers Purchase of titled assets Used car dealerships Paying tax liens or dividends Down payment to secure additional financing Management buy-outs If principal(s) increases the ownership percentage of remaining owners *Contact your Relationship Manager for specifics 8

9 Our simple application process Refer your client Talk with us Get them funded Earn your commission 10 minutes Within 72 hours Under 10 days Same day Easily upload their documents or share your affiliate link. Get started Your personal Account Manager can communicate directly with you or your client you decide. Affordable financing for your client, when they need it most. Get paid for every funded deal or pass the savings on to your client. Required documents: 2 years of most recent business tax returns 1 year of most recent personal tax returns 6 months of most recent business bank statements Business debt form If loan size $300K, interim financials (YTD profit & loss + balance sheet) Verification documents (as necessary): Copy of driver s license Completed wire transfer form Funding Circle s online platform makes it easy to get a submission in quickly and accurately...but one of the things I love most about Funding Circle is their hands-on service for referral partners. Dirk Davis Merchant Funding International, Funding Circle partner 9

10 FAQ FUNDING CIRCLE BASICS 1. What does it mean to be a marketplace for small business loans? 2. Who is investing in or buying these loans? GETTING STARTED AS A REFERRAL PARTNER 3. Who will be my main point of contact? 4. What will I receive in commission? 5. When will I receive my commission? 6. Will you invoice and collect fees that I have pre-arranged with clients? 7. I can t access the Partner Portal what should I do? 8. Can I create log-ins for other colleagues who work with me? 9. Will you include me in communications with my client? 10. Can I use Funding Circle s logo on my website? THE APPLICATION PROCESS 11. How do I submit a loan application? 12. What documents will I need to get from my client? 13. When will you pull credit on my clients? 14. Will I receive a copy of my client s credit report? 15. Can I check the status of a loan application? 16. How long will it take to get a decision on a loan application? 17. Once a loan is listed on your marketplace, how long does it take for the borrower to receive funding? OUR PRODUCT 18. Can you make exceptions on your credit criteria? 19. What is your policy on repeat borrowers? 20. Can current Funding Circle borrowers take out additional debt from other lenders? 10

11 FUNDING CIRCLE BASICS 1. What does it mean to be a marketplace for small business loans? Funding Circle connects small businesses who want to borrow with investors who want to lend. While Funding Circle underwrites and dictates all of the loan terms, we don t fund loans off of our own balance sheet. 2. Who is investing in or buying these loans? Globally, more than 45,000 individuals, financial institutions, and even the UK Government invest in small businesses through our platform. In the United States, we have a wide range of investors, from individuals and family offices to large global asset managers. These investors believe in the power of successful small business development to help the American economy grow. GETTING STARTED AS A REFERRAL PARTNER 3. Who will be my main point of contact? As a valued Funding Circle Referral Partner, you have two main points of contact who will work together to ensure you have a great experience on our platform: Your Relationship Manager will work with you at a high level, communicate major program and product changes to you and your team, discuss opportunities for growth, and respond to any questions or feedback you have for us. Your Account Manager will be your point person on details regarding each deal you submit. If you want, your AM can help you chase documents from borrowers and communicate specifics regarding loan approvals and declines. 4. What will I receive in commission? Your commission will vary between 1.50% and 3.00% depending on the commission structure you have chosen and the deal flow you have submitted to Funding Circle. Please refer to page 5 for details and contact your Relationship Manager with any questions. 5. When will I receive my commission? We pay your commission at the same time we fund the loan to your client. Funds are wired 11

12 by 1:00 PM Pacific Time. Depending on how quickly your bank processes the transaction, it can take 48 hours from the date of funding for the amount to be reflected in your account. 6. Will you invoice and collect fees that I have pre-arranged with clients? No. You may only charge additional fees if you have selected our Legacy Commission Program, and you will need to invoice and collect these fees yourself in accordance with applicable laws. 7. I can t access the Partner Portal what should I do? Make sure you are on the Funding Circle USA website by checking for an American flag in the top-right corner. Then, confirm that you are using the exact log-in credentials provided to you, remembering that your password is case-sensitive. If you continue to have trouble, contact your Relationship Manager for help. 8. Can I create log-ins for other colleagues who work with me? Not yet. Currently, we are not equipped to create unique information for multiple people in a single Referral Partner Portal. Your colleagues will either have to register as a new Referral Partner (and receive their own account) or share your Partner Portal credentials with you. 9. Will you include me in communications with my clients? The way we communicate with your clients is completely up to you! We re happy to reach out directly to loan applicants with requests for additional documents, or let you manage all of the communication yourself. Every relationship we maintain is unique, so please advise us of your communication preferences as early as possible with each application submission. To improve your clients chance of being funded, we are required to contact applicants directly at three points during the application process: After their application is submitted: Once we have verified that your client passes our pre-screen checks, we will your client (with you in copy) to inform them of our receipt of the application and to let them know to expect a call from an underwriter. Credit call during underwriting: Funding Circle s underwriters often require a diligence call to learn more about your client s business. This is not necessary 12

13 for every deal, but relatively common. Standard topics covered include: use(s) of proceeds for the loan, existing debt on the business, significant year-over-year changes on financial statements, standout items from personal financial profile, and ID protection questions. Delivery of loan documents: We send all of our loan documents via a third-party vendor called DocuSign. To create a legally-binding contract, we must send loan documents directly to your clients and/or guarantors for their digitally-authenticated signature(s). We can, however, copy you on the loan documents at your request. 10. Can I use Funding Circle s logo on my website? Referral Partners and other third parties may not use the Funding Circle logo a registered trademark of Funding Circle Ltd. without written permission. However, your Relationship Manager can provide you with white-label marketing materials upon request. THE APPLICATION PROCESS 11. How do I submit a loan application? Once you have access to the Partner Portal, you can submit applications in two different ways: Option A: Click Start new application to fill out an application on behalf of your client. Option B: Click Send application link to copy and paste your affiliate link into an (or on your website). Any application submitted using this link will tie back to your account and appear on your Partner Portal dashboard. 12. What documents will I need to get from my client? 2 years of most recent business tax returns 1 year of most recent personal tax returns 6 months of most recent business bank statements Business debt form If loan size $300K, interim financials (YTD profit & loss + balance sheet) 13

14 13. When will you pull credit on my clients? We ask for your client s address on the second page of our application. Once this is entered, we will run a soft pull on their credit score. If we are unable to run a soft pull at this point, we will allow you to proceed. Regardless, we will run a hard pull on the applicant s credit once the online application is completed in its entirety. 14. Will I receive a copy of my client s credit report? No, we are not able to send you or your client a copy of their credit report. If we decline a loan application, we will send a notice of adverse action to your client that provides a list of up to two reasons for our decline along with instructions to obtain a copy of their own credit report through the appropriate credit agency. 15. Can I check the status of a loan application? Yes! You can sort and track all of your active and archived applications using the dashboard in your Partner Portal. You will be able to see the status update in real-time as we evaluate your client s application. Of course, you are also always welcome to call your Account Manager directly. 16. How long will it take to get a decision on a loan application? In almost all cases, we can make a decision on a loan application within 3-4 business days of receiving the full application submission (including all required documents). 17. Once a loan is listed on your marketplace, how long does it take for the borrower to receive funding? A loan is guaranteed to receive funding one business day after it is listed on our marketplace. Funds are wired at 1:00 PM Pacific Time, but depending on your client s bank, it can take business hours from the date of funding for the amount to be reflected in their account. 14

15 OUR PRODUCT 18. Can you make exceptions on your credit criteria? No. We cannot make any exceptions to our credit criteria. As a marketplace lender, we have to consider the investors on the other side of the platform who are buying these loans. We guarantee that all of our listed loans meet our minimum pre-qualification criteria, which is why we cannot make exceptions. Borrower FICO 620 Operating history of at least 2 years Business revenue of $150,000 in most recent tax return year Profitable (business net income >$0) in at least 1 of the prior 2 years Not a sole proprietorship or non-profit No more than 4 active tax liens on the personal or business side in the last 10 years No personal or business bankruptcies in the last 7 years 19. What is your policy on repeat borrowers? We will consider making a second loan to a Funding Circle borrower if at least 6 months have passed since the borrower took out his/her first Funding Circle loan and the borrower has not been late or delinquent on a payment. 20. Can current Funding Circle borrowers take out additional debt from other lenders? Per our loan documents, we require that you or your client inform us before your client takes out any additional debt. Funding Circle was founded by small business owners, and we are passionate about working with our borrowers to ensure that they have the appropriate amount of capital and resources to grow their business. 15

16 Contact us We look forward to working with you! If you have any additional questions or would like to discuss our platform, product, or company in more depth, please contact us. Mike Rabil Vice President, Partnerships (direct) Brian Soloway Senior Manager, Partnerships (direct) Nick Rockwell Senior Manager, Parnerships (direct) Teddy Augustine Senior Relationship Manager (direct) Ronjohn Dadd Senior Relationship Manager (direct) Shivani Dasani Relationship Manager (direct) Porter Drake Relationship Manager (direct) Jessica Evans Relationship Manager (direct) Molly McGowan Senior Relationship Manager (direct) Derek Nutley Senior Relationship Manager (direct) Chris Risi Relationship Manager (direct) Jordan Segue Relationship Manager (direct) Destinie Slavich Relationship Manager (direct) Noah Smith Business Development Rep (direct) John Verdon Relationship Manager (direct) Calley Weiner Relationship Manager (direct) Funding Circle 747 Front Street, Floor 4, San Francisco, CA

17 Building a better financial world. Referral Partner Program