THE FINE PRINT
In 2022, our family business needed to grow. We'd been trading for years. We had customers, staff, a track record. We saw an opportunity. Like thousands of small businesses, we looked for funding.
Funding Circle appeared everywhere. The friendly face of small business lending. Not like the big banks. A "partner" who understood entrepreneurs. We applied. We were approved. We signed.
We thought we understood what we were signing. We didn't.
The economy turned. Costs rose. Customers tightened belts. We didn't give up. We used our savings to keep staff employed. We downsized. We cut everything we could cut.
For 27 months, we never missed a payment. Not one. The direct debit went out, month after month, even when we knew the end was coming. In late 2024, we finally had to stop. The business entered voluntary insolvency.
We'd lost everything. Our company. Our livelihood. Our savings. And then came the letter - demanding more than we'd originally borrowed.
But before we get to that, let's look at what we actually signed.
The paperwork looked straightforward:
Simple enough. Expensive, but clear. What the headline didn't show was this: before we saw a penny, Funding Circle took a "Completion Fee" of 10% of what we actually received.
So we borrowed one amount but owed more from day one. Before we'd made a single payment. Before we'd hired anyone. Before we'd served a single customer. That completion fee was profit for Funding Circle before we'd even started.
16.9% per annum. For context: the Bank of England base rate in mid-2022 was around 1%. Our rate was more than ten times higher. Over the full six years, we would have paid back far more than we borrowed - in interest alone.
We understood we'd pay interest. What we didn't understand was the clause buried in the terms about what happens if you default. More on that later.
This is the document that changed everything.
The loan was to our limited company. In theory, if the business failed, creditors could only pursue the company's assets. That's what "limited liability" means. It's the entire foundation of modern business. But Funding Circle wanted more. They required both of us - husband and wife - to sign a Personal Guarantee.
Joint and several liability. We are both individually liable for the full amount. They can pursue either of us for everything. If one can't pay, the other owes it all.
Personal assets at risk. This isn't about the business anymore. Our savings. Our family home. Everything we own.
Both spouses required. Not just the business owner. Both of us had to sign. Our family's entire financial security tied to one business loan.
The Personal Guarantee form asked for our "Non-Business Email Address" and "Non-Business Telephone." That tells you what this document really is. It's not a business formality. It's a claim on your personal life.
This is something we only discovered later - much later.
When you take a Funding Circle loan, you deal with Funding Circle. Their name is on the emails. Their staff answer the phone. Their logo is on every document. You'd assume Funding Circle is your lender.
They're not.
Buried in the contract is a clause that defines the "lender" as the entity that actually funds the loan. And that entity's name? It's "made available on request." In other words: when we signed, we had no idea who we were actually borrowing from.
For two and a half years, we made payments. We dealt with Funding Circle. We assumed they were our lender. Then, in 2025 - after the business had failed - we received a notice. The "investor" holding our loan had changed. And then another notice. It had changed again. Our debt had been transferred. Twice. During our settlement negotiations.
We'd never been told who the original lender was. We still don't know who "RHONDDA" - the name on the first transfer notice - actually is.
We signed a contract without knowing who we were really dealing with.
To be fair, the Personal Guarantee did contain warnings:
"THIS IS AN IMPORTANT DOCUMENT. YOU SHOULD TAKE LEGAL ADVICE AND ENSURE YOU FULLY UNDERSTAND IT BEFORE SIGNING."
And:
"If two or more guarantors are married... the non-involved guarantor must not sign until he/she has confirmed to Funding Circle that he/she has taken independent legal advice."
Did we get legal advice? No. Like most small business owners, we were focused on running our business, not reading legal fine print. Should we have? Yes. We know that now.
But here's the question: If this document is so important that legal advice is essential, why is it presented as routine paperwork in an online application?
If we default, we owe all the interest for the entire 72-month term - even if we only had the loan for a fraction of that time. We used the money for 27 months. They want interest for 72.
On default, a "collection charge" of 10% of the outstanding principal is added automatically. Is that what it actually costs to collect? Or is it just a penalty?
The contract allows our debt to be sold or transferred "without notice." So the entity deciding whether to accept our settlement offer might not be Funding Circle at all. It might be an Irish investment fund we've never heard of. We have no way of knowing who's really calling the shots.
If you're considering a Funding Circle loan:
1. Understand the completion fee. You don't receive the "loan amount." You receive less.
2. Read the Personal Guarantee. Really read it. It puts your home at risk.
3. Understand who the lender is. It's probably not Funding Circle.
4. Understand the default terms. The "contractual interest" clause means you can owe interest for years you never had the money.
5. Get legal advice. The documents tell you to. There's a reason.
6. Consider alternatives. We wish we had.
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