MarketFinance v Funding Circle: How their CBILS products compare

MarketFinance has become the latest alternative lender to unveil its product range under the coronavirus business interruption loan scheme (CBILS) but how does it stack up against other providers?

The British Business Bank accredited MarketFinance for CBILS lending last month and it joins Funding Circle, Assetz Capital and ThinCats among the alternative lenders offering the finance package to struggling businesses.

Assetz Capital and ThinCats are yet to unveil their range but here is how MarketFinance and Funding Circle stack up against each other.

Products

Peer-to-peer lending giant Funding Circle gained CBILS accreditation in April and launched its products in early May.

Borrowers can apply for business loans of between £50,000 to £250,000 with rates of between 1.4 per cent and 8.9 per cent for between two and five years.

It is also applying to provide bounce back loans.

Read more: Industry gives the Bounce Back Loan scheme a wary welcome

MarketFinance is only offering loans under the scheme of up to £150,000 and has slightly lower rates of between 1.02 per cent to 6.34 per cent for two to three years.

Businesses can also apply for its invoice finance product, offering facilities from £50,000 to £5m.

All CBILS finance is interest-free for the first 12 months.

Neither will ask for a personal guarantee for the loans but MarketFInance said it may require one for invoice finance facilities above £250,000.

Eligibility

All CBILS applicants must be adversely affected by coronavirus.

Both platforms require firms to have turnover of up to £45m although MarketFinance requires a minimum of £100,000.

Applicants will need three years of trading history to apply with Funding Circle or two years for MarketFinance.

Read more: P2P lenders hope to meet coronavirus business loan criteria

Companies must be registered in the UK and MarketFinance requires at least one director to live in the country.

Funding Circle states that 50 per cent of turnover must come from trading activity.

MarketFinance said applicants must operate in the business-to-business space, meaning they must sell goods or services to other firms.

Non CBILS finance

Funding Circle is focusing solely on providing CBILS finance.

In contrast, MarketFinance has said it is still offering standard loan and invoice finance facilities for non-CBILS borrowers.