iPad app & update to the annual net return. Weekly Lending Review

Week 8: 17 – 23 February 2014

Last week, a record £6.3 million worth of new loans were listed on the marketplace, available for you to lend to. The majority of loans were assigned to the A risk band and the South East of England had the most businesses looking for funding.

Investors have also secured rates as high as 15%, 14.9% and 14.7% for loans accepted in the C-, B and A risk bands respectively* so now is a great time to increase your lending to businesses across the UK.

New loans

There were 97 new business loans listed last week and there are currently 84 auctions on the marketplace.

The total value of the new listed loans was £6,313,520; that’s an average of £65,088 per loan. The largest loan value was £250,000 and the smallest loan value was £10,400.

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: 17-Feb represents the week of 17th – 23rd February.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Our iPad app has landed in the App store

You can now download the Funding Circle app for free for use on your iPad. You won’t miss out on the end of auctions again as you can turn on alerts which will notify you of auctions closing.

Annual net return increase

Last week we updated the headline annual net return rate across the site. We have also decided to change the headline rate from a simple average to a weighted average based on the amount each investor has lent, as we think this is a better reflection of the performance of all lending.

Recommend a friend and share £80

If you recommend a friend to Funding Circle and they lend at least £1,000 to our great British businesses, you could each have £40 cashback** paid into your Funding Circle accounts!

Community Discussions

This week we’re talking about interest and fees. You can join the discussion on our community forum.

Unsure how to get started?

Take 5 minutes to read through our blog which explains how to start lending to businesses through Funding Circle.

Loans defaulted last week

Egg producer. Loan ID 1396

This Scarborough business produces free range eggs and has been trading since 2010. The original loan amount was £20,000 and all 234 investors have been notified.

Adult careers service. Loan ID 1546

This Bridlington business has been trading since 2001 and has failed to keep up with repayments. The original loan amount was £50,000 and all 571 investors have been notified.

Our insolvency team are working to recover the outstanding amounts for all of these loan.

Enjoy lending, The Funding Circle Team

 

*Based on all successful bids into loans accepted between 17/02/2014 and 23/02/2014. For further information please see our statistics page.

** Terms & conditions apply

 

British Business Bank lends £40m through Funding Circle

In three and a half years since we launched, thousands of British people, as well as organisations such as local councils and universities, have helped to lend over £220 million to 4,000 businesses. We are currently lending an average £5 million worth of loans per week.

Last March the Government began lending to British small businesses through Funding Circle, as part of its Business Finance Partnership scheme. Government involvement has played an important role in increasing awareness of Funding Circle in the business community.

Today we’re pleased to reveal that they have nearly lent out their entire £20 million commitment to over 2,000 businesses across the country, helping to create an estimated 6,500 jobs. We’re also pleased to confirm that the Government-backed British Business Bank Investment Programme has decided to invest a further £40 million alongside private investors. It’s worth noting that there is still a week’s worth of money left from the original £20 million so you will see loans part-funded by the Government this week (24th February).

The British Business Bank Investment Programme is a part of the British Business Bank programme, which is currently run directly by the Department for Business, Innovation and Skills and is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. British Business Bank plc will operate as a Government-owned financial institution once HM Government has received European Commission State aid clearance, which is expected in 2014.

The objective of the British Business Bank programme is to support economic growth by bringing together public and private sector funds to create more effective and efficient finance markets for smaller businesses in the UK.

The investment through the Funding Circle platform is made alongside investors from the private sector on equivalent terms and represents the final 10% of funding requested by a borrower, once private sector lending has reached 90% of the requested amount. The British Business Bank programme’s funding does not provide an endorsement, recommendation or any warranty, either expressed or implied, about the creditworthiness of a borrower or the activities and procedures of Funding Circle, and its funding has the same risk of loss as for any private sector investor.

Neither the British Business Bank programme, the Department for Business Innovation and Skills nor any other government department or agency is involved with the operation or management of Funding Circle.

This further lending commitment recognises the contribution that non-bank channels, such as Funding Circle, can play to help ease the flow of finance to businesses.

News

Annual net returns update

Today, we’ve updated the headline annual net return rate across the site.

The previous reported headline rate was a simple average across investors and was 5.7%. This has now risen to 5.8%.

As part of this update we have decided to change the headline rate from a simple average to a weighted average based on the amount each investor has lent.

Given the range and types of investors on the site, we think this is a better reflection of the performance of all lending through Funding Circle. We also expect this approach to be in line with FCA regulation starting in April 2014. The headline rate is now showing as 6.1%, up from a comparative figure of 5.9% previously.

The weighted average for investors who are lending to more than 100 businesses with a maximum exposure of 1% of their lending to anyone business is 6.3%, and 71% of investors are earning more than 6%, up from 62% in the previous period.

net returns

You can see the full updated statistics on the statistics page.

Enjoy lending

Our iPad app has landed in the App Store

It’s here! You’ll now be able to download the Funding Circle App to use on your iPad. Functionally, it’s the same as the iPhone app which was released in December, but it’s been adapted to work more beautifully on the larger screen of the iPad.

ipad screenshot ipad1

It’s free to download from the App store and will allow you to bid when you’re on the move or even lying in bed. You’ll be able to easily keep track of all of your bids and you can have notifications sent to your iPad when loan requests you’re interested in are coming to an end.

On top of this, there are some useful features like the auto login, which means you don’t have to login to your account every time you open the app on your iPad. Safety is important to us which is why you can’t deposit or withdraw funds using the app, so you can rest assured that your money is safe.

The app is also intended for existing Funding Circle investors only, so if you haven’t yet created an account to lend to businesses, you can so do here.

Updates to the Terms & Conditions and Minimum Bid Rates

Weekly Lending Review 

Week 7: 10 – 16 February 2014

Last week, a record £5.4 million made its way to businesses across the UK thanks to your lending. We also saw close to 100 new business loans available for you to lend to, totalling £5.6 million.

The average gross yield for investors has been increasing steadily over the past month across all risk bands, with rates as high as 15%, 14.8% and 14.4% accepted into loans last week, in the C-, B and C risk bands respectively.*

New loans

There were 96 new business loans listed last week and there are currently 86 auctions on the marketplace.

The total value of the new listed loans was £5,632,880; that’s an average of £58,676 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: 10-Feb represents the week of 10th – 16th February.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Updates to the Terms & Conditions

We’ve made some change to our terms & conditions which will reflect (1) improvements to our debt collection processes, (2) more lending and borrowing opportunities, and (3) necessary changes for FCA regulation later this year. You can read about the changes in more detail on our blog. It’s important to have a look, as by continuing to use the Funding Circle marketplace you agree to be bound by these revised terms.

No change 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. Minimum bid rates for March will remain at February levels, as the majority of loans have been clearing above these rates: 6%, 7.9%, 8.9%, 9.9% and 11.6% for the A+ to C- risk bands.

Recommend a friend and share £80

If you recommend a friend to Funding Circle and they lend at least £1,000 to our great British businesses, you could each have £40 cashback** paid into your Funding Circle accounts!

Unsure how to get started?

Take 5 minutes to read through our blog which explains how to start lending to businesses through Funding Circle.

Community Discussions

This week we’re talking about updates to the T&Cs. You can join the discussion on our community forum.

Loans defaulted last week

Berkshire restaurant. Loan ID 697

This business operates a Michelin star restaurant and has been trading since 2004.The original loan amount was £100,000 and all 727 investors have been notified.

Fish & chip restaurant. Loan ID 135

This Norfolk business has been trading since 2006 and suffered a fire at their premises last year. The original loan amount was £30,000 and all 308 investors have been notified.

Our insolvency team are working to recover the outstanding amounts for all of these loans.

Enjoy lending, The Funding Circle Team

* Based on all successful bids into loans accepted between 10/02/2014 and 16/02/2014. For further information please see our statistics page.

** Terms & conditions apply.

 

How to start lending to businesses through Funding Circle

If you’re interested in becoming an investor with Funding Circle, but still have a few questions about how it all works, then this is a great place to start. As you’ll soon find out, getting going as an investor is really easy and you’ll be up and bidding in no time!

How can I lend to businesses?

Any resident of the UK can get involved in peer-to-peer lending by lending money to UK businesses through the Funding Circle marketplace. Each loan request is funded using an online auction, where people bid against one another in multiples of £20. They can offer rates of typically between 6% and 15%; whatever rate they are happy to lend at. As you’re bidding against other people, you’ll need to ensure your bid is competitive enough to become part of the loan. If the bid is successful and the business accepts their loan offer, investors hold what’s called a ‘loan part’. As an investor, you are free to buy and sell loan parts from other investors, so you don’t have to be tied to a loan for its duration.

Step 1 – Create an account

Firstly, you’ll need to create an account on the Funding Circle website, using your email address. You’ll need to provide information such as your name, date of birth and address history so we can identify you at a UK address. Once you have successfully created your account, you’ll have complete access to the marketplace, allowing you to view details of the businesses that are currently looking for funds. It may be worth looking through each tab of your account to familiarise yourself with the content.

Create your account here

Step 2 – Credit your Funding Circle account

To start lending money to businesses, you will need to deposit funds into your Funding Circle account. You will need to click on the ‘Transfer Money’ tab in your account to do this. You can either use a debit card, where a minimum deposit of £100 is required, or you can make a bank transfer where there is no minimum. Funds transferred using a debit card will appear in your account immediately, however bank transfers can take up to 3 working days to arrive. It’s worth noting that if you plan on lending though a limited company, the account is restricted to bank transfers.

Transfer funds here

Step 3 – Lend money to businesses

Once your account is funded, you can start lending to businesses. The minimum bid size is £20. There are two different ways to lend to businesses on the marketplace:

1. Automatic lending using Autobid

Most users opt to use the Autobid tool to lend their money quickly and easily to businesses automatically. It’s also a great way of diversifying your lending. You choose the level of risk, the interest rate and the maximum exposure you’re comfortable with for each business, and Autobid will lend your funds on your behalf.

2. Choose businesses yourself

You can review details of each business looking for funding on the loan request page of your account. There is a lot of supporting information on each loan if you click on the loan title, which will help you make your lending decision. You’ll see their risk band, region, sector, the business’s financials and reasons for the loan.

When you find a business that interests you, decide how much you’d like to bid and at what interest rate, using the two drop down boxes on the right hand side of the screen. Even if the loan request is fully funded you can still place a bid, but it will have to be at a lower rate than another person’s bid.

Top Tip

You can also buy and sell loan parts from other people. If you’re looking at lending to another loan, or you wish to withdraw your funds, you will need to sell your loan parts. You can do this in a quick and easy 2-step process by clicking on the ‘Sell’ tab in your account. This is a really useful option if you’re looking to diversify your lending portfolio, as you can buy loan parts for all repaying loans since we launched, instead of waiting for new loan requests.

Now I’ve lent my money, what’s next?

Repayments from businesses come in every month and are distributed in equal instalments over the course of the loan. You’ll be able to keep track of your progress using the Summary Page in your account. You can also download a statement so you can clearly see how much capital has been repaid and what interest you’re earning.

If you have any questions about your account or would like help navigating around the site, please feel free to call the team on 0207 401 9111 or you can email us.

Become an investor here 

Updates to the Terms & Conditions

Following from our last update, we’re making some additional changes to our Terms & Conditions which will be introduced on Monday 17th February 2014.

These changes will reflect (1) improvements to our debt collection processes which are being brought in-house, (2) more lending and borrowing opportunities through the extension of loan types on the marketplace, and (3) necessary changes for FCA regulation later this year.

Here are the key changes you should know about:

1. We’re improving our debt collection and bringing it in-house

We will soon handle all debt collection procedures in-house so we can work directly with responsive borrowers to help them if they come into financial difficulty, which will also help us to provide more detailed communication to investors about these loans.

We’re also making changes to ensure that we can act faster and more robustly with non-responsive borrowers. Going forward, investors will now have 7 days to opt out of novation after a loan defaults, reduced from 14.

We’re improving the clarity in the Loan Conditions surrounding payments received from businesses whose loan is in arrears. Any payment received will be first applied to the arrears, before the most recent monthly amount owed.

2. Bringing more property finance to the marketplace

As you may be aware, we are expanding the types of loans on offer to investors and businesses, by bringing more property finance loans to the marketplace. We’ve created Funding Circle Property Finance Limited, a subsidiary that will mirror Funding Circle Recoveries Limited. It will be used for holding security of property finance loans.

We’ve also had some feedback from borrowers about the name of “Funding Circle Recoveries Limited” (FCRL), which currently holds security on borrowers. This name is on a public record and borrowers have told us that “Recoveries” in the name may suggest that the borrower has been in financial difficulty when this is not actually the case. We’re changing the name to Funding Circle Trustee Limited (FCTL) as it is better suited, since it reflects the fact that the company is predominantly a security trustee.

3. Getting ready for regulation

From April, the peer-to-peer lending industry will be regulated and we are starting to make small changes now so we’re on course to comply with regulation. One such change is formalising the handling of fair complaints, which is an operating principle set out by the P2P Financial Association.

These changes will be reflected in the updated Loan Conditions, as well as the Terms & Conditions for investors, borrowers and intermediaries. It’s important to have a look, as by continuing to use the Funding Circle marketplace you agree to be bound by these revised terms.

On Monday 17th February, before making a bid you’ll also be asked to re-accept the Loan Conditions.

Join 5,974 investors who have secured double digit rates

Week 6: 3 – 9 February 2014

Over the past 3 weeks, we’ve seen an average 100+ new loan requests available each week for you to lend to. With so many lending opportunities on the marketplace coupled with the 5,974 investors who have secured double digit rates since the beginning of the year*, there’s never been a better time to lend!

Last week was no exception with more than £5.4 million worth of new loans available for you to lend to. The two areas that had the most businesses looking for funding were located in the South East and North West of England.

New loans

There were 104 new business loans listed last week and there are currently 82 auctions on the marketplace.

The total value of the new listed loans was £5,488,640; that’s an average of £52,775 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: 03-Feb represents the week of 3rd – 9th February.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Recommend a friend and share £80

If you recommend a friend to Funding Circle and they lend at least £1,000 to our great British businesses, you could each have £40 cashback** paid into your Funding Circle accounts!

News you should know

Valentine’s Day is nearly upon us, so why not spoil your significant other with something from one of our great Funding Circle businesses. We’ve compiled a list of 6 gift ideas for a range of budgets. Happy shopping!

Community Discussions

This week we’re talking about what user testing that is being carried out this month. You can join the discussion on our community forum.

Loans defaulted last week

Italian restaurant. Loan ID 325

This business was established in 2005 and went into liquidation last year.The original loan amount was £20,000 and all 279 investors have been notified.

Marketing agency. Loan ID 465

This Kent business has been trading since 2005 and went into liquidation last year. The original loan amount was £60,000 and all 367 investors have been notified.

Footwear retailer. Loan ID 1322

This Kendall business has been trading since 1977 and went into administration last year. The original loan amount was £80,500 and all 799 investors have been notified.

Electrical wholesaler. Loan ID 1360

This Durham business has been trading since 2004 and went into liquidation in December 2012. The original loan amount was £36,000 and all 437 investors have been notified.

Our insolvency team are working to recover the outstanding amounts for all of these loans.

Enjoy lending, The Funding Circle Team

* The number of investors in 2014 who have had successful bids at 10% and higher accepted into loans.

** Terms & conditions apply.

6 peer-to-peer gift ideas for your Valentine

It feels like we’ve only just said goodbye to Christmas, but with Valentine’s Day just around the corner, now is a great time to showcase some more independent businesses who have grown thanks to the backing of people all around Britain through Funding Circle. We’ve picked businesses that will fill you with Valentine’s spirit and give you some ideas on ways to impress your significant other, on a range of budgets! From diamond jewellers to an independent florist, have a read of the top peer-to-peer ideas for Valentine’s Day.

1. Diamonds

First up, we’ve seen many independent jeweller’s come through the Funding Circle doors over the past 3 years. One that particularly sticks out is Beverley Hill’s Jewellers, who was one of the first businesses to borrow over £200k. They are the place to go if you’re in the capital and are searching for a diamond as they’re located in the heart of Hatton Garden; the centre of the UK’s diamond trade.

2. Unique jewellery

If you’re not quite ready to say something with a diamond or are searching for fun gifts for your friends and family, you could always head down to Tatty Devine. This female design duo have been awarded MBE’s for their services to fashion and design and hand make quirky and fashionable pieces, from necklaces to cufflinks, which you can buy online or in various stockists across the country. They even do personalised pieces which will make them extra special.

jewellerydiamond

3. Flowers

Flowers make the perfect gift for anyone so if you’re around Nottingham you could visit Susan’s, an independent florist who have created Valentine’s bouquets. Alternatively, you can order a gift online to be delivered nationwide.

4. Cards

If nothing says it better than a card, you could visit an outlet run by M&P Cards; a small card shop chain operating in and around Hampshire, Berkshire and Wiltshire. Four of their outlets have teamed up with Thorntons so you could purchase your heart shaped chocolate gifts there too.

valentine1

5. Chocolate

Speaking of chocolate, is there ever a time when it doesn’t go down a treat? We featured some peer-to-peer chocolate brands in our Christmas gift ideas blog and we’ve managed to find one more: Choc Affair who are based up in York, make fairtrade chocolate by hand and even have a heart shaped range. But, if you’re thoroughly sick of seeing heart shaped goodies they do also make animal shaped choccies like lions and crocodiles too…

6. Holiday of a lifetime

And finally, if you’re really looking to splash the cash then why not book a trip to South America this year. Infinity tours run holidays all over the continent so you could combine seeing the Iguazu Falls with soaking up the atmosphere at the Football World Cup. As hosts of the World Cup and the Olympics, our recommendation would be to visit Brazil, as there’s never been a more exciting time to go!

 iguazu

2014 starts with a bang. January industry news

2014-new-year-hd-wallpaper1

Christmas may have meant December was a quieter month in the media than usual, but that didn’t stop the industry from coming back with a bang in 2014.  January has been jam-packed full of peer-to-peer lending news, from political speeches to property to being featured on the Martin Lewis Money Show.  Here’s a few highlights…

Funding Circle reaches £200 million milestone in business lending

We kicked off the month with news that our investors have now lent over £200 million to businesses since we launched three and a half years ago.  Although it’s still fairly small compared to the banks, we’re growing at a rate of knots – with £130 million of this lent in 2013 alone. The news was also covered by Credit Today and Bridging & Commercial.

Banking will be transformed – by technology, not politics

Following Ed Miliband’s speech on the economy, where he said he plans to enhance competition in the banking sector by looking at creating two new banks, the Observer ran an editorial that us peer-to-peer lenders would tend to agree with. They argue that things have already moved far past the need for more bank branches. Our collective technology has already disrupted the wider financial services industry to the point of no return, much like in the music and travel sectors. James Meekings, one of our co-founders was also on the BBC Radio 4 Today programme to talk about the transformation that we’re seeing.

Start-ups challenge big banks’ technology

In a similar vein, the BBC warns big banks to beware of the “innovative technology challengers” who are “coming to eat your lunch.” That was the key message which emerged from FinTech City London, a series of events for financial services technology professionals, where our CEO and co-founder, Samir Desai, did a sterling job at highlighting just how much the wider financial services landscape is changing.

Online lenders plot new challenge to big banks

Another theme this month, and something we’ve already touched on in previous media blogs, is how the industry is going mainstream. As we move from disrupting to changing an industry, working with traditional players will become increasingly important. This Sunday Times piece reports that the government is drawing up a plan to help alternative lenders compete with banks, and the Mail Online takes a look at how bank partnerships will increase borrowing opportunities for businesses. The Financial Times also take a look at the need for non-bank financing to go mainstream in order to prosper.

Martin Lewis Money Show

At the time of writing, there was still two weeks left to view the peer-to-peer lending feature on Martin Lewis’ money show. He explains the basics of peer-to-peer lending from an investor perspective and compares our technology to an “online financial matchmaking” service, and asks viewers if they’re “ready for a new financial partner”.

P2P group Zopa secures £15m investment from Arrowgrass Capital

Our consumer lending friends at Zopa also raised £15 million to “expand their business and bolster efforts to familiarise people with ‘P2P’”. The fundraising comes as valuations for the most active peer-to-peer lending sites have been rising amid growing interest in the sector. The Evening Standard also covered the news.

P2P lenders bankroll development of new homes

Property finance also made the headlines this month as we begin to increase the number of property loans we offer to both borrowers and investors. This is all part of our ongoing commitment to help millions of small businesses access finance.  The Guardian and Mortgage Introducer also covered the news.  And ourselves and Lendinvest made the front page of the Financial Times with news of the world’s largest peer-to-peer loan.

Funding Circle’s Samir Desai: After the banking cowboys, here comes the new-wave loan arranger

And finally (phew!) we just had to include this recent profile of Samir in the Evening Standard. Happy reading!

 

News

£13.7 million lent in January & rates of 15%. Weekly Lending Review: week 5

Week 5: 27 January – 2 February 2014

It was another bumper week at Funding Circle with more than £5.9 million worth of new loans available for you to lend to, contributing to £11 million of lending opportunities over the past two weeks. The majority of loans were for businesses in the retail sector and the South East of England had the most loans.

Investors have also secured rates of 15%, 14.6% and 13.8%* in loans accepted over the past week in the A, B and C risk bands respectively, so it’s a great time to be lending!

New loans

There were 91 new business loans listed last week and there are currently 79 auctions on the marketplace.

The total value of the new listed loans was £5,927,520; that’s an average of £65,138 per loan. The largest loan value was £210,000 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: 27-Jan represents the week of 27th January – 2nd February.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

News you should know

We’ve spent another 5 minutes meeting members of the Funding Circle team, and in this installment we’re with the Credit Assessment team. You can read about the backgrounds of each team member, what they do outside of Funding Circle and what they consider to be the highs and lows of their job.

Your lending totalled £13.7 million in January alone, as 258 loans made their way to businesses across the UK.

Community Discussions

This week we’re talking about adding premiums to loan parts. You can join the discussion on our community forum.

Loans defaulted last week

York public house. Loan ID 367

This business ran a public house and B&B in York and was established in 2001. The business went into administration last year and has failed to maintain repayments. The original loan amount was £20,000 and all 174 investors have been notified.

Food importer. Loan ID 1983

This Buckinghamshire business has been trading since 1997 and has failed to keep up with repayments. The original loan amount was £100,000 and all 1,026 investors have been notified.

Roofing company. Loan ID 2058

This Walsall business has been trading for 7 years and failed to maintain repayments.  The original loan amount was £70,000 and all 794 investors have been notified.

Construction company. Loan ID 2419

This Southport business has been trading since 2008 and went into liquidation last year. The original loan amount was £70,000 and all 713 investors have been notified.

Our insolvency team are working to recover the outstanding amounts for all of these loans.

Enjoy lending, The Funding Circle Team

* Successful bids in loans accepted between 27/01/2014 and 02/02/2014. For more information please see our statistics page.

 

Your 5 minutes with… the Credit Assessment Team

So far in this series, we’ve spent some time with members of two key areas of the Funding Circle team: the customer relations team and the insolvency team. Now it’s the turn of the team who make informed decisions about the loans you invest in: the credit assessment team.

The team has grown steadily over the past 3 and a half years, with Kevin starting in May 2010 (before Funding Circle had even launched) growing to 8 members today, who share over 80 years of experience between them within the credit and risk underwriting industries.

underwriters team interview

Day-to-day activities include:

Assessing applications from potential borrowers who come to Funding Circle for a business loan. This includes reading biographies of where a business is, where it has come from, and where it wants to be in years to come. With that information, coupled with our our in-house assessment model and external sources of data, the credit assessment team can then work out how we could help them get to where they want to be. As well as this, they have regular catch ups with the credit analytics team, including Andrew Mullinger (co-founder and Head of Credit) to update and refine our credit model, to identify trends and raise any suggestions or comments.

So let’s get a feel of who the team are and where they’ve come from… Can you all tell me a bit about your backgrounds?

Kevin: Sure, as you mentioned, I was the first employee at Funding Circle. We had no website, no credit scoring models, no procedures, nothing! I have over 17 years’ Credit Underwriting experience working for various banks and finance companies.

Craig: I joined in May 2013, having 5 years’ credit underwriting and deal structuring experience. I’ve done quite a range of underwriting including property and shipping finance.

Penny: I only joined last November, but have 15 year’s experience and an asset finance background at ING.

Duncan: I became part of the team in August 2012, having 12 year’s experience in credit underwriting; specifically in agriculture and construction finance.

Jas: I joined pretty early on in February 2012. Before this, I had 10 years in risk underwriting and was previously at ING.

Ari: I actually knew Jas from ING, and focused on asset finance. In total, I’ve probably got around 15 years experience too.

Louisa: I joined a bit before you Ari, wasn’t I? February 2013 I think. I have 5 years’ credit underwriting experience, in leasing and asset finance.

Sandy: I started last month and previously worked as a trade credit underwriter for 2 and a half years, having come from Sydney where I worked as a mortgage insurance underwriter.

So it seems you all have a variety of backgrounds, and many years of experience! Do you think that helps with the decision making here?

Kevin: It definitely helps. Our team have a wide variety of experience, gained across several areas and while we do seek opinions from others, we try to ensure that all underwriters review applications across the whole spectrum.

Penny: It helps, yes. If you’re not 100% sure of something, then nobody has a problem with you passing it on or asking for some input. We all work together, and because of the range of businesses that come through to Funding Circle, it’s great that everyone is accessible.

And what would you say the common goal for the team is?

Kevin: I’d say it’s really to acquire well measured risk in a fair, prudent and accountable manner.

Craig: We’re guardians of peoples savings but we’re also investing in the future of businesses. Overall, I’d say we’re here to lend as much money as we can, in a sustainable and responsible way.

Duncan: Yes, and we hope to change people’s lives for the better.

Louisa: Definitely. We want to encourage the right type of business and protect investors’ money.

Yeah, it’s definitely important to reach that balance. So why did you decide to work at Funding Circle?

Duncan: I wasn’t happy at my old job. A recruiter called me, so I met Andrew and immediately I was sold! I joined when the company was a lot smaller and the business hadn’t massively taken off, but Andrew completely sold it for me.

Kevin: It sounds a bit sycophantic, but as soon as I met the three co-founders, I knew that Funding Circle would be a success (remember I joined before we launched). Looks like I was right!

Sandy: I think the concept of peer-to-peer lending is brilliant. Funding Circle has a platform which is able to provide a win win situation for both borrowers and investors, and we’re the industry leaders which is even better!

Craig: I wanted to work at a company where people liked working and people believe in what we do. I think a lot of the negativity in finance comes from legacy issues, like what happened in 2008 for example, whereas we don’t have the legacy issues here, and we love having our name in the newspaper!

Louisa: I wanted a change and thought this would be a great opportunity to grow with a company, and without sounding too clichéd I thought it looked very exciting!

Do you think any of our processes differ to other institutions you’ve worked at?

Kevin: I helped to design some of our processes, so there are similarities with others I have experienced. I think the biggest difference is that we are not risking our own money, but that of our investors, so we have to be extra vigilant.

Duncan: Our speed sets us apart I think. Other places take 6 weeks to make a decisions, where as we can get a decision out within 48 hours which is incredible for businesses, and also brings plenty of lending opportunities to investors.

Ari: I’d say the process has a general look and feel of everywhere else that I’ve been, but there are some improvements that can be made which we’re working on.

Jas: There’s not a lot different, the systems weren’t in place when I joined but we’re getting there. Generally I’d say we’re fairly inline with industry standard.

You must have seen hundreds, if not thousands of applications now. Has anything surprised you about the types of businesses that come to us?

Louisa: Not really surprising, but the average business tends to be well established; having weathered the last 5 or 6 years.

Ari: They are the “S” in “SME!” Usually husband and wife teams, generally asking for about £70k.

Penny: I’d call them lifestyle businesses. I used to see a lot of the same deals coming through in my previous company, but here – anything goes!

Sandy: Exactly. They’re typically SME family lifestyle businesses, so you know that they have a vested interest in making their business work, which provides some comfort when looking at their applications.

Craig: For me I think it’s the cross-section of businesses that we see, I mean it really could be anything.

Duncan: Anything could come through the door, from high street shops, to newsagents, to filmmakers, to hot tub manufacturers.. The list is endless.

Kevin: Not really. I have been doing this for a long time, and have seen many strange things.

That sounds interesting! Go on..

Kevin: We had an application where the company bought some land somewhere in Africa for £10,000 but had revalued it at £57 million in the accounts.

You’re right, something does sound amiss there. What’s your favourite thing about working at Funding Circle?

Jas: For me, it’s the people, everyone is really genuine.

Penny: I agree, it’s a nice place to come in to. They’ve also been very flexible with my childcare needs. Everyone is accessible and is happy to hear from you.

Ari: It’s also the people for me, it’s a great place to work, you don’t get the blues about waking up in the morning and we’re in early and stay late.

Craig: People are happy to be here. I don’t rush home at 6pm, I’m happy to continue working.

Kevin: I love the buzz and the energy. The people are generally young and vibrant, and being the oldest employee, I find it is infectious.

Louisa: Yeah, there’s a real positivity everywhere. We’re all excited about where the company is going.

Sandy: The dynamic and fresh culture. The people at Funding Circle are such a cool bunch and are really friendly.

Duncan: It’s nice to work somewhere where you are valued and the staff do matter. Everyone has a voice.

And what would you say the hardest part of your job is?

Ari: I love working here but the hours can be long.

Jas: Leaving work on a Friday afternoon!

Kevin: I think it’s remembering everybody’s name. We are growing so fast that I lose touch.

Craig: Trying to predict the volume that’s going to come in as it’s moving so quickly. Also, dealing with businesses who we’ve rejected is pretty tough, as rejection is always going to be taken personally.

Penny: I’d say seeing businesses, or their applications, that are just not quite there yet. You want to help them but you always have to remember that investor’s money is at risk. So I guess finding that balance is tough.

Louisa: You can sympathise with the company which really does need financial help, but we just can’t get them there.

So aside from Funding Circle, what other interests or hobbies do you have?

Louisa: I love doing anything outdoors, like running and hiking. And I enjoy going out in London with friends.

Penny: Looking after (and running after) my 5 year old son!

Duncan: I really enjoy cooking.

Sandy: I enjoy boxing and yoga.

Kevin: I love football, and played for many years at various levels, but now it’s confined to watching from my armchair.

Jas: At the moment, its managing an ongoing and overrun building project: my house. We started 10 months ago and it’s still not finished!

Oh no, I’m sure a lot of people can sympathise with that one. Thank you all for your time, I know you’re all keen to get back to reviewing loans so let’s finish with this one. Do you have any interesting facts that you wouldn’t mind sharing with us all?

Penny: I’m really scared of heights but I managed a bungee jump. I don’t think I’d do it again, as I’m sure I fainted at the top.

Duncan: I nearly became a chef and instead opted for underwriting.

Craig: I can juggle wine bottles.

Kevin: I did have an almost encyclopedic knowledge of 1970’s pop chart music.

Jas: Ari and I were once in a TV advert. It was for the National Lottery and there were some hilarious hairstyles going on.

Ari: Yes, we were. And Jas showed everyone the clip before I had even joined. Thanks Jas!

Excellent, I’m sure we can dig out that clip if enough people want to see it. And Duncan, why don’t you start a Funding Circle “Bake Off”, I’m sure there would be plenty of eager participants.

We’ll be spending our next 5 minutes with the credit analytics team, so stay tuned for our next installment.