Update to minimum bid rates. Weekly Lending Review: week 3

Week 3: 13 – 19 January 2014

In this week’s lending review we’ve got a further 72 new lending opportunities and an update to minimum bid rates, which will take effect on Monday 3rd February.

The majority of new loans were allocated to the A and B risk bands, and expansion was the most popular reason for needing funding.

New loans

There were 72 new business loans listed last week and there are currently 55 auctions on the marketplace.

The total value of the new listed loans was £4,012,800; that’s an average of £55,733 per loan. The largest loan value was £150,000 and the smallest loan value was £5,000.

Business loans still available for bidding on for the next 3 days or more:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The average gross yield graph is reported weekly and shows a rolling two week average. Number of loans, value of loans and secondary market are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 13-Jan represents the week of 13th – 19th January.

Weekly average gross yield (2 weeks rolling)


Number of listed loans per week


Listed loan value per week


Update to minimum bid rates

We review the minimum bid rates in the middle of every month to decide whether they should be changed or kept the same. A number of factors are considered when reviewing the rates, including general economic conditions and costs of alternative borrowing products.

This month, the decision has been made to increase rates by 0.1% on the A, B, C and C- risk bands. The new rates will come into effect for loan requests listed after 9am on Monday 3rd February 2014. The new rates are as follows:

A+: 6% (no change)

A: 7.9% (+0.1%)

B: 8.9% (+ 0.1%)

C: 9.9% (+ 0.1%)

C-: 11.6% (+ 0.1%)

Community Discussions

This week we’re talking about how unsuccessful bids are shown on your summary page. You can join the discussion on our community forum.

Loans defaulted last week

IT services provider. Loan ID 3696

This Bristol business has been trading since 1998 but has not kept up with repayments. The original loan amount was £100,000 which has been credited back to the accounts of all 1,185 investors affected. For further details on this, please read the announcement on the forum.

Enjoy lending, The Funding Circle Team

Read last week’s Weekly Lending Review.

Jack Pritchett

Senior Communications Manager


3 thoughts on “Update to minimum bid rates. Weekly Lending Review: week 3

  1. Becky, I asked the “why” question the last time FC raised rates and you came back some time later with the corporate answer. As FC seem now to be changing rates more frequently can you please ask someone to provide a better answer? The answer needs to address the effect on the second hand market for loans of this micro management of rates. Without knowing why rates move (apart from the drab corporate non-answer) how can any investor trust that there is a second hand market for their loans? What is now happening seems to indicate a future inevitable inability to sell second hand loans at previous minimum bid rates.
    Please PLEASE do not respond with a bland corporate answer – no answer is better!!!! And please do not take this personally I am sure you do a fine job but FC need to take some responsibility for their actions if they want investors to keep faith in their professional expertise.

    • Hi CFP, apologies the previous answer did not give you the detail you were hoping for. The aim of having minimum bid rates (MBRs) is to offer attractive risk adjusted returns to our investors. Average rates decreased last year and in response, MBRs were introduced in June. The initial increase was too steep, and having listened to investors, MBRs were reduced. We stated our objective was to increase MBRs in small increments (no more than +/ – 0.5%) towards these levels and this is what we have been doing. To address your point about secondary market liquidity, this is assessed each month in our review and we have seen no material correlation between the pricing of primary & secondary loans and liquidity. You can read last year’s comments from our CEO about the review on the forum. Thanks for your comments and I hope this gives you some more comfort about the future direction of the marketplace. Becky.

      • I agree with CFP. Its getting very difficult to sell loans which are more than a few months old because the rates have increased. Is funding circle planning to do something to make it easier to sell in the future)

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