Business tips from an experienced entrepreneur

Earlier this summer we visited David Potter in County Durham, and asked him to share his top tips for other business owners. Having set up Ambic, a manufacturing business, over 30 years ago, David has a wealth of experience.

In this short video, David talks us through the 3 most valuable lessons he’s learnt over the past 30 years.

In summary, his top 3 business tips are:

  • Keep your staff happy.They are your biggest asset. You’ll need to find out how to motivate them, but if you look after them, they’ll look after you.
  • Be patient. Things may not always happen when you want them to but you should try to be patient, and adjust your plan if needed.
  • Be resilient. And rely on your own ability which you have within you.

Ambic manufacture furniture for schools and universities, and the majority of their customers are located in the North East. They took out a £100,000 business loan from 1,277 people through Funding Circle last July.

Over £7m in new loans and our latest success story. Weekly Lending Review

Week 34: 18 – 24 August 2014

Last week we saw over £7 million of new lending opportunities come to the marketplace; including over £1.1 million in property development loans. They are located in Oxfordshire, North London, and West London.

The majority of new loans were allocated to the A risk band, with manufacturing and property & construction the 2 most common industries.

New loans

There were 92 new business loans listed last week and there are currently 52 auctions on the marketplace.

The total value of the new listed loans was £7,163,280; that’s an average of £77,862 per loan. The largest loan value was £550,000 and the smallest loan value was £8,340.

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: 18-Aug represents the week of 18th – 24th August.

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

Did you lend to this business?

This month we went to Birmingham to visit Street Advertising Services, a Funding Circle borrower. They are the innovative advertising team behind the world’s biggest shave campaign; featuring Roger Federer. In this short video, you’ll meet Kristian, the founder, and see clips of some of the artwork they have created.

Would you like to meet businesses?

We’re really keen to open our business visits up to investors, so you too have the chance to see how your money makes a difference. We’ll be sending out emails to investors of upcoming case studies, so if you’re interested in attending, make sure you check your emails!

Last few days to share £100 with a friend!

If you recommend a friend to Funding Circle before 1st September and they lend at least £1,000 to businesses by the end of the offer period, you could each have £50 cashback* paid into your Funding Circle accounts. There’s only a few days to go to recommend a friend, so make sure you don’t miss out.

Loans defaulted last week

Printing business. Loan ID 3607

This Wakefield business has been trading since 1996 and is in liquidation. The original loan amount was £105,000 and all affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans.

Enjoy lending, The Funding Circle Team

 

*Terms and conditions apply

 

Shaving Roger Federer and other eye-catching artwork from a Funding Circle business

gillete

This month we travelled to Birmingham to meet Kristian Jeffrey, founder of Street Advertising Services, who shared his business story with us.

Street Advertising Services creates innovative advertising campaigns for brands and agencies, by using vibrant art and technology. Their work is designed to grab people’s attention, and judging by some of the artwork in this video, it’s not hard to see why.

One of the most memorable campaigns they’ve been responsible for was for the ‘World’s Biggest Shave’ for Gillette in 2011; part of which is shown in this short video. Kristian also explains how he set up his business and the sacrifices that were made when doing so.

In June 2014, Kristian took out a £40,00 business loan so they could employ more people and move to new offices. More than 500 people lent to Street Advertising Services through peer-to-peer lender Funding Circle.

If you’re interested in taking out a business loan in the future, you can find out more details here.

 

Record £6.4m lent to coincide with our 4th birthday. Weekly Lending Review

Week 33: 11 – 17 August 2014

Last week, we welcomed over 100 new businesses to the marketplace; the majority of which were allocated an A risk band.

Investors had bids of up to 15% accepted on loans in the C risk band, and bids of up to 14.1% in loans in the A+ risk band*. We also saw a record £6.4 million lent to businesses across the UK, thanks to all of your lending.

New loans

There were 102 new business loans listed last week and there are currently 61 auctions on the marketplace.

The total value of the new listed loans was £6,836,040; that’s an average of £67,020 per loan. The largest loan value was £460,000 and the smallest loan value was £6,260.

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: 11-Aug represents the week of 11th – 17th August.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

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Listed loan value per week

value

News you should know

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, we have decided to increase rates by 0.2% on the C- risk band. These changes will take effect on Monday 1st September. The new minimum bid rates for loan requests listed after 9am on 1st September are as follows:

A+: 6% (no change)

A: 8% (no change)

B: 9% (no change)

C: 10.2% (no change)

C-: 12.2% (+ 0.2%)

Happy Birthday Funding Circle!

It was our 4th birthday last week and to celebrate, we published an infographic which tracks the rise of peer-to-peer business lending up to this year, when the industry became formally regulated.

2 weeks left to share £100 with a friend!

If you recommend a friend to Funding Circle and they lend at least £1,000 to businesses by the end of the offer period, you could each have £50 cashback** paid into your Funding Circle accounts. There’s only 2 weeks to go to recommend a friend to Funding Circle, so make sure you don’t miss out.

Loans defaulted last week

Radiator retailer. Loan ID 2125

This Northill business has been trading since 1997 and is in liquidation. The original loan amount was £100,000 and all affected investors have been notified.

Heating maintenance business. Loan ID 2721

This Widnes business has been trading since 1995 and is in arrears with repayments. The original loan amount was £30,000 and all affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans.

 

Enjoy lending, The Funding Circle Team

 

* Based on all successful bids in loans accepted on the marketplace from 11th August – 17th August.

**Terms and conditions apply

 

Funding Circle celebrates its 4th birthday!

Today, we are celebrating our fourth birthday, and what an incredible journey the last few years have been. We want to say thank you to all of the investors and borrowers who have made the last four years possible.

To date, you have lent over £330 million to over 5,500 small businesses across the country, creating an estimated 16,500 jobs. To celebrate, we’re publishing an infographic which tracks the rise of peer-to-peer business lending right up to this year, when the industry became formally regulated.

If you’re a small business owner looking for finance, then why not put an application in now? Apply here.

Infographic FINAL resized for blog

News

Meet David, who 1,277 of you helped last year. Weekly Lending Review

Week 32: 4 – 10 August 2014

It was another good week for listings as nearly 100 new businesses came to the marketplace, with the A+, A and B risk bands sharing a similar volume of loans.

A £400,000 loan for a property developer is closing in the next few days. It will be used to convert flats in a central London location into one family-sized home, and is A+ rated at a fixed rate of 8%. It is first bid, first served, so place your bids before it’s too late!

New loans

There were 96 new business loans listed last week and there are currently 61 auctions on the marketplace.

The total value of the new listed loans was £6,135,460; that’s an average of £63,911 per loan. The largest loan value was £581,000 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 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: 4-Aug represents the week of 4th – 10th August.

Weekly average gross yield (2 weeks rolling)

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Number of listed loans per week

number

Listed loan value per week

value

News you should know

Digging into the data: Collections and recoveries

We’re starting a series which will look at the data behind Funding Circle and the first post examines the decline in late payments by businesses and the increase in the amount of money recovered for investors when they experience a bad debt.

Meet David, a business owner you’ve helped

We visited David Potter, director of Ambic, who borrowed £100,000 from 1,277 investors last year. He set up his furniture business over 30 years ago and it is still going strong. You can find out what they did with their loan in this short video.

Share £100 with a friend!

If you recommend a friend to Funding Circle and they lend at least £1,000 to businesses by the end of the offer period, you could each have £50 cashback* paid into your Funding Circle accounts. There’s only 3 weeks to go to recommend a friend to Funding Circle, so make sure you don’t miss out.

Loans defaulted last week

Electrical contractor. Loan ID 5864

This Southampton business has been trading since 2007 and has experienced a change in circumstances. The original loan amount was £75,000 and all affected investors have been notified.

Furniture retailer. Loan ID 4705

This Chesterfield business has been trading since 2008 and is in arrears with repayments. The original loan amount was £20,000 and all affected investors have been notified.

Poultry business. Loan ID 1963

This equipment supplier has been trading since 2009 and is in liquidation. The original loan amount was £26,500 and all affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans.

 

Enjoy lending, The Funding Circle Team

* Terms and conditions apply

One year on: did you lend to this manufacturer?

Last month we visited David Potter, Director of Ambic, who is based in County Durham and borrowed £100,000 in July 2013.

Ambic is a long-established UK manufacturer and their primary focus is making and fitting educational furniture. They supply schools, universities and offices in the North East of England and pride themselves on the quality of their furniture; and the experience their staff bring to the field.

In this short video you’ll meet David, who set the business up 30 years ago. You can find out more about his manufacturing business and how his Funding Circle loan helped him with working capital over the busy summer months.

Ambic borrowed £100,000 from 1,277 investors through Funding Circle in July 2013.

If, like David, you’re interested in taking out a working capital loan for your business, you can get started on the application here.

Peer-to-peer lending set to hit £1 billion mark. July industry news

Newspapers - Copy

Peer-to-peer lending set to hit £1bn mark

Data released by industry body, the Peer-to-Peer Finance Association, shows that UK peer-to-peer lending platforms handled new loans of over £500 million in the first half of the year. In the first six months of 2014, new peer-to-peer lending to businesses surpassed £275 million, with new consumer lending at £243 million. Lending is forecast by the Association to exceed £1 billion by the end of the year.

How does peer-to-peer lending and crowdfunding work?

Following the latest round of figures from the Bank of England which show bank lending is still down, despite a better economic outlook, the BBC 6 o’clock news took at look at all the various forms of alternative finance, including crowdfunding and peer-to-peer lending. One of our borrowers, Moo Free who manufacture dairy free chocolate, featured in the piece.

Robert Steel joins Funding Circle board

We announced our series D funding round for $65 million, which means we have now raised $123 million in total to grow the business. This latest round will help us to continue to improve our offer for both borrowers and investors; helping more businesses borrow in the US and UK, and improving the investment experience for all of our investors. Coverage was also seen in the Times, Daily Telegraph and Reuters, and you can read more on our blog.

Would you invest in your favourite restaurant? Investors plough more than £1m into Burrito Bond that pays 8%

Mexican restaurant chain Chilango has been inundated by investors clamouring for a slice of its business after founders released a Burrito Bond via crowdfunding site Crowdcube. The 8 per cent four-year mini-bond has proved so popular that the two-man team has already beaten their original target of £1 million by £361,600.

Alternative finance to aid commuters

A new UK start-up, CommuterClub and consumer peer-to-peer lender, Ratesetter, have come together to bring the benefits of an annual season ticket to everyone travelling within the area covered by Transport for London’s Oyster smart card. In time, the company aims to operate in other UK cities with travel smart cards too.

The pros and cons of P2P lending

BBC Moneybox focused on peer-to-peer lending in a recent episode. Our co-founder Andrew Mullinger discussed the risks involved from an investor perspective and the importance of diversification. All Funding Circle investors who have lent to at least 100 investors with a maximum exposure to any one business of 1% are earning a positive return and 60% are earning 6% and more. Read up on the importance of diversification here.

Santander gets behind FinTech with $100m fund

Santander launched a $100 million (£58.3 million) fund to back financial technology (FinTech) start-ups, as the bank’s chief executive hailed the UK as the world’s leader in financial innovation. The money will be invested across the world, but Santander chief executive Ana Botin hinted that much of the money could end up in the UK, saying: “There is no doubt the UK is leading the way in financial innovation, not just in Europe, but globally.”

News

Digging into the data – Collections & Recoveries

At Funding Circle we are committed to being a transparent business and we want to share more of our information with you around lending and borrowing activity.

As part of this commitment we are launching a series of monthly blog posts looking at the data behind Funding Circle. The series launches today and this first post examines the decline in late payments by businesses and the increase in the amount of money recovered for investors when they experience a bad debt.

Understanding why bad debts occur

Lending to businesses can deliver attractive returns to investors while helping established British businesses to access the finance they need to grow.

However from time-to-time some businesses will be unable to fully repay their loans. This is often due to an unexpected change in their circumstances; sometimes businesses are themselves the recipient of a late payment from one of their customers, causing cash flow problems. At other times another financial provider, like a bank, may withdraw their support suddenly. Often these are only temporary setbacks for a business, but in some cases it can have a more significant impact, leading to a business failing to repay their loan on time.

When businesses are late repaying their loan at Funding Circle our in-house collections and recoveries team work closely with the business affected to deliver the best possible results for everyone. One of our core principles of collections and recovery is ‘survival for revival’. A business that ceases to trade or is declared bankrupt without any recovery for investors is never a positive outcome.

Since we brought all of our collections and recoveries processes in-house in February 2014, we have seen significant improvements in the recovery rate for investors and a reduction in the number of businesses being late with a monthly payment. What this means to investors is that more businesses are paying back on time and when an instance does occur where a business ceases to trade, we are recovering more money for investors.

Let’s take a look at some of the key numbers:

Bringing down late payments

Firstly the number of businesses that are late with their monthly repayments has dropped since February from ~1.5% to less than 1%. The lowest this has reached is 0.80% was on 31 July 2014.

Decline in % of late payments since launch of FC in-house collections and recoveries teamDecrease in late rate - August 2014

Bringing down the rate of late payments was not achieved by simply defaulting more loans. This short term gain may look good initially, but the overall recovery rate would go down with each new default.

Instead, the decline in late payments is a result of building industry leading policies for managing businesses in distress. These policies involve working closely with borrowers as soon as they experience trouble – which helps to reduce the frequency of late payments, and puts us in a better position should the business ultimately cease to trade.

Raising recoveries for investors

As a result of this work, we expect recoveries across all loans defaulted up to 30 June 2014, to recover a minimum of 34p in the pound. Based on more recent loans (between 1 January 2014 – 30 June 2014) we anticipate the recovery rate to be 40p in the pound.

To give some context to these numbers, independent research indicates that traditional lenders would expect to receive between 28p-42p recovery on a secured business loan once a business enters administration, and 1p-3p. on unsecured business loans (without a personal guarantee).

Increase in recovery rate - August 2014

What is particularly encouraging about these figures is that we believe these estimates could potentially be higher. For example we have not included estimated recoveries on bankruptcies, and any loans currently in dispute before the courts or otherwise in negotiation for a payment plan.

What this means for investors

We are committed at Funding Circle to having the best collections and recoveries process in the industry – ensuring investors feel confident in lending to businesses. We know there is still lots more to do and we are constantly looking to recover as much money as possible, and further improve our communications.

We hope you found this post useful. We’ll be talking about this in more detail on our forum – please join us there. Our next data post will appear in September.

The Funding Circle team

A record-breaking month for lending. Weekly Lending Review

Week 31: 28 July – 3 August 2014

Last month, Funding Circle investors lent a massive £21.9 million to 362 businesses across the UK, outdoing the previous record by over £1.5 million. Thank you to all who helped these businesses, we’ll have more case studies on the way soon!

Currently there are 3 property development loans on the marketplace, including one in central London, one in Ealing, and one in Barrowby.

New loans

There were 98 new business loans listed last week and there are currently 61 auctions on the marketplace.

The total value of the new listed loans was £6,884,340; that’s an average of £70,248 per loan. The largest loan value was £450,000 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 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: 28-Jul represents the week of 28th July – 3rd August.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

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News you should know

Loan book

The loan book is now available to download from our statistics page. Included are details such as the risk band and sector of the business, and whether the loan was initially offered as a whole loan (WL) or went to auction on the marketplace as a partial loan. We’re committed to providing you with as much data as possible which is why we’ll be adding financial information, accurate to the nearest £10, to the loan book in the next version.

Summer special: share £100 with a friend!

If you recommend a friend to Funding Circle and they lend at least £1,000 to businesses by the end of the offer period, you could each have £50 cashback* paid into your Funding Circle accounts. There’s only 4 weeks to go to recommend a friend to Funding Circle, so make sure you don’t miss out.

Loans defaulted last week

Coach operator. Loan ID 5309

This coach business has been trading since 1928 and is now in administration. The original loan amount was £100,000 and all affected investors have been notified.

Ready meals producer. Loan ID 1348

This Birmingham business has been trading since 1998 and is in arrears with repayments. The original loan amount was £50,000 and all affected investors have been notified.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans.

 

Enjoy lending, The Funding Circle Team

*Terms and conditions apply.