Whole loans trial and 51 new listings

Week 17: 21 – 27 April 2014

Over £3 million made its way to businesses across the UK last week and we saw 51 new lending opportunities listed on the marketplace, including thirteen loans for over £100,000. Nearly half (24) of the new loans were for working capital and just under a third (18) were for expansion and growth. This week the Midlands saw the most businesses listed.

New loans

There were 51 new business loans listed last week and there are currently 41 auctions on the marketplace.

The total value of the new listed loans was £3,108,000; that’s an average of £60,941 per loan. The largest loan value was £150,000 and the smallest loan value was £10,000.

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 of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn. Number of loans and value of loans are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 21-Apr represents the week of 21st – 27th April.

Weekly average gross yield (2 weeks rolling)

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Number of listed loans per week

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Listed loan value per week

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News you should know about

Whole loans trial from 1 May

We announced last week that we will be trialling listing whole loans to help us to continue to grow and become a significant part of the small business lending market. You can read more on our blog and FAQs as well as join the discussion on our forum.

Loans defaulted last week

Portable water provider. Loan ID 2612

This business has been going for nine years but we understand the borrower discovered some financial anomalies created by certain employees shortly after taking the loan. This resulted in the borrower having to pay a number of invoices which it could not afford due to the seasonality of the business. The business has entered into administration in order to precipitate a sale to a third party.The original loan amount was £100,000 and all 1490 investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for this  loan.

Enjoy lending, The Funding Circle Team

 

Investment through Funding Circle involves lending to small and medium sized businesses, so your investment can go down as well as up. Remember, past returns are not necessarily a guide to future returns.

Natasha

Head of Corporate Communications

 

6 thoughts on “Whole loans trial and 51 new listings

  1. I would be interested to know why the weekly number of loans listed and the value of the loans dropped by 50% from March 24 to April 21.

    • Hi Thomas, thanks for getting in touch. The drop off between March and April is seasonal and a result of Easter and school holidays. We’re already seeing demand ramp up again and expect to be back at those levels soon.

  2. the “forum” link above doesnt work! appealing to institutional investors is flawed because they arent investing their own money and make money regardless of rates. an institutional investor trying to invest 100 million quid cannot study a 50k loan. just because there is a big market out there doesnt mean you can participate, the FC credo must eventually saturate: to grow any bigger you have to abandon the old principles. I think FC are being greedy eyeing the big institutional investors and the big market and wanting some. there are much less opportunities for me to lend at FC because someone is hogging all the higher rate loans. these are only available second hand, but I cannot ask questions on second hand loans. the second hand loan links dont change colour when you click them so its very difficult to browse these as I keep revisiting ones I have already rejected. I have emailed FC twice about this problem and no reply yet.
    the entire problem with the stock exchange is because the companies want to expand forever. you cannot expand forever, it is blind greed to try to keep expanding. the smaller companies are interesting because they keep within their limits and they dont have monopolistic tendencies.

    • Hi financier, thank you for your feedback. The link to the forum has now been updated.

      it is important that Funding Circle has a diverse source of lenders on the platform, and will ensure that the marketplace is sustainable in the long term. This does not mean we are leaving our original investors behind, far from it, and please be assured that we are fully committed to ensuring that no investor is favoured over another.

      Larger investors operate on a separate marketplace, and all loans are randomly assigned to both marketplaces to ensure fairness.

      I hope this helps, and I am sorry to hear you haven’t had a response, you can call the team on 0207 401 9111, weekdays 9am-6pm, and they would be more than happy to discuss further with you.

      Thanks.

      • Hi, FC have now replied, but they say currently they cannot make the “loan parts” links change colour on being clicked.

        note also that with the london stock exchange there are some 3000 companies, but the big fund managers only dabble with the top few hundred. they dont dabble with the lower ones because there is usually just one fund manager, so he cannot micromanage 500 companies. he will focus on shares from the top 100 or top 200 etc. fund managers will visit each company they invest in (“kicking the tyres”) and interview the executives, to avoid boiler room scams, and be on first name basis with the executives.

        you are asking these fund managers to dabble with say a 100k loan. but they need a minimum risk exposure of 1%, ie 100 companies, its just too much work for them to micromanage loans. loans are a conveyor belt of continually changing companies. these fund managers prefer the stock exchange because they can keep trading the same companies eg BP as the fund grows. loans are a totally different paradigm from stocks.

        its the banks who dabble with smaller companies, this is because each branch manages loans, so they have much more micromanagement and smaller loans. but the banks ultimately conform to the central banks agenda, and this is to have very low interest rates. but the savers dont want low interest rates, so there is a problem of liquidity. instead people put their money on the stock exchange but that is a casino. FC works because its based on a different principle. it uses realistic higher rates, which then attracts savers creating liquidity. but FC will probably always be niche because the due diligence requires too much time and effort for most people.

        FC works for a certain interval of wealth and a more studious investor. if you have too little money its too much due diligence. if you have too much money, there isnt enough liquidity for the reinvestment side.

        its great for me, I make a nice amount of money from FC loans, but if I had a million quid I would put that elsewhere as I could handle a lower return rate. I had some 20k of reinvestment money build up to reinvest at FC, but cannot even make the 10k kindle promotion, because there just isnt enough liquidity.

        what works in america wont necessarily work in the UK, the US is a much bigger catchment, about 5x that of the UK. so you would have much more liquidity. more bigger companies.
        each market has a different geometry.

        when you invest your own money its totally different from when you invest someone elses. a lot of the financial crisis was caused by people investing other people’s money where the rogue traders develop a cavalier attitude. FC initially was interesting because investors were investing their own money, and borrowers owned their companies. it was totally personal. stock exchange companies are mostly zombies where nobody owns them: they are owned by the big funds, but the fund manager doesnt own the fund, the fund is other people’s money. FC is now trying to bring in the zombie funds.

        fund managers make their commission even if the fund goes down, so they basically dont care. its dangerous becoming involved with the big funds. FC isnt there to rescue the pension industry. everyone’s business is nobody’s business.

        with the betting industry, betfair brought in peer to peer a long time ago, and is very successful. but the market is still dominated by the traditional bookmakers. peer to peer will always be a niche for the more elite client. its too difficult to understand for the mainstream people. eg betfair bets are more complex, eg there can be less liquidity eg some great odds but only 5 quid available from the other peer side.

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