Award-winning week! Weekly Lending Review

Week 12: 16 – 20 March 2015

Last week we were delighted to win Best Alternative Funding Provider at the 2015 Business Moneyfacts Awards, the largest business finance awards in the UK, held in London. We’re proud to have also won this award in 2012 and 2013, and be highly commended in 2014.

Have you received excellent customer service? Please show your support by voting for us in the Moneywise Customer Service Awards 2015!

New loans available to you

There are currently 67 loan requests on the marketplace which are all available for you to lend to.

The total value of new Funding Circle loans was £8,662,700, averaging at £62,000 per loan. The largest loan value was £263,160 and the smallest loan value was £6,000.

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, value of loans and amount lent are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 16-Mar represents the week of 16th – 20th March 2015.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Total amount lent

lent

Loan parts available to buy from other investors

secondary

 

Easter Eggs from your favourite Funding Circle businesses

Spring has sprung at Funding Circle. Make sure its a cracking Easter by showing your support to small businesses across the country. Whether you are organising an egg hunt or buying treats for friends and family, we’ve put together a selection of marketplace treats to suit all budgets. Read about Tasty Funding Circle Easter Treats on the blog.

Providing more information around defaulted loans

If you have any defaulted loans you may have noticed that we now apply a RAG (Red, Amber, Green) rating system, also known as a Traffic Light system, in the Loan Comments on your dashboard. The purpose of the new system is to help you assess the quality of your defaulted loans, and your expected return over a certain period of time.

Loans defaulted last week

Steel provider. Loan 5934. Risk band A

This North West business has been incorporated since 1947 and is in liquidation. All affected investors have been notified.

Print management provider. Loan 2903. Risk band C

This Northampton business has been running since 2001 and is in liquidation. All affected investors have been notified.

Professional service provider. Loan 1467. Risk band A

This West Sussex business was established in 1976 and is in liquidation. 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

 

Tasty Funding Circle Easter Treats

Spring has sprung at Funding Circle. Make sure its a cracking Easter by showing your support to small businesses across the country.

Whether you’re organising an egg hunt or buying treats for friends and family, we’ve put together a selection of marketplace treats to suit all budgets.


hen-bigFor the traditionalist:
Chocolate Yellow Chick Basket 

This cute chick contains delicious chocolate eggs, which have the added bonus of being dairy free. The only question is which to eat first?

D & D Chocolates borrowed over £11,000 from 125 investors  in September 2014.

For the discerning relative: Easter Milk Chocolate Bar

Hamiltons chocolatiers will personalise your Belgian chocolate for a truly unique Easter gift. The bar is decorated with milk chocolate sugar coated eggs, milk chocolate rabbits, and even multi coloured sugar strands.

This sumptuous slab is made in the Cotswold Village of Broadway by husband and wife team, Andrew and Sheila Campbell who borrowed £20,000 from 263 people back in February 2014.

 

Hot-Cross-Bun-Pralines-loose_productimageFor the seasonal sister: Hot Cross Bun Pralines

A modern take on this seasonal favourite, milk chocolate cases are filled with a ganache of fresh cream, luxury dried fruit and subtle spices then topped with the traditional white cross. Delicious!

James Chocolates borrowed £60,000 from over 1,000 investors in July 2014.

 

Because everyone should be able to enjoy chocolate: Cheeky Orange Easter Egg

New for Easter 2015, award winning dairy-free chocolate manufacturer, Moo Free Chocolates have created the Cheeky Orange Easter Egg complete with infused orange crystals in the shell. Eggscellent!

Mike Jessop, co-founder of Moo Free met one of the investors who lent to his business. Find out how their meeting went in this short video.

 

crop rabbitFor the little ones: Rabbit Lolly

Choose from scrumptious creamy milk or white fairtrade chocolate in an adorable rabbit shape made by hand in Yorkshire. Guaranteed to make kids smile.

Choc Affair borrowed £60,000 from 957 investors in July 2013.

 

For the budding chocolatier: Making and Tasting Chocolate Workshop

Feeling eggstravagant? Why not give the ultimate gift this Easter and treat a loved one to Black Mountain Gold’s Chocolate Workshop. Master Chocolatier, Jules, will share some of the essential skills for making fresh, handmade fine chocolates.

Black Mountain Gold borrowed £15,000 from 204 investors in August 2014.

 

For the Petit Four penchant

Planning an Easter party? Casemir Chocolates will handle all your chocolate catering needs. Try their sister company too: The Grown Up Chocolate Company

 

Does your business need finance? We’ve helped more than 7,000 businesses in both the UK and US access finance for a whole range of capital needs. You can apply online in less than 10 minutes.

Enjoy Lending. The Funding Circle Team

 

Breaking down the Budget

Today was the last Budget before the upcoming General Election and, alongside some of the headline pieces of news, the red box included a number of interesting updates for both Funding Circle investors and borrowers.

Bad debt tax relief

The main news for investors centred on the introduction of new bad debt relief for your lending through Funding Circle. This was first announced by the Chancellor in December’s Autumn Statement, but it was today confirmed that through self-assessment individuals will be able to make a claim for relief on losses incurred from April 2015. This is good news for all investors and, depending on your individual tax situation, we estimate you will soon be able to earn up to 25% more as a result of these changes.

ISA update

As expected there was no immediate update on including your lending within an ISA, however the Chancellor did confirm that results from the consultation will be released this summer, once the General Election has passed. Conversations have so far been very positive with the Treasury and we remain confident that there will be confirmation on how your lending will be able to be structured within an ISA this year. You can read more about our recommendations for a Lending ISA here.

In other tax news the Chancellor also confirmed that from next year the first £1,000 individuals earn from investments will be take free.

Business referral platform

Finally, for businesses there was some further news around access to finance and greater competition in the market. The Treasury confirmed that it will be inviting expressions of interest from platforms wishing to act as an intermediary for banks to refer on business customers to non-bank platforms. This news is designed to achieve greater collaboration between banks and non-banks and better help businesses looking to access finance – and follows on from existing bank partnerships Funding Circle already has with RBS and Santander.

Providing you with more information. Weekly Lending Review

Week 11: 9 – 15 March 2015

Over the past week we have been using a new system to help you assess the quality of any loans that have defaulted, by improving the loan comments you see in your summary page. We hope this is useful going forward and look forward to hearing your feedback on our new system.

New loans available to you

There are currently 73 loan requests on the marketplace which are all available for you to lend to.

The total value of new Funding Circle loans was £11,219,800, averaging at £57,537 per loan. The largest loan value was £325,000 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, value of loans and amount lent are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 9-Mar represents the week of 9th – 15th March 2015.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Total amount lent

lent

Loan parts available to buy from other investors

2ndry

Providing more information around defaulted loans

If you have any defaulted loans you may have noticed that we now apply a RAG (Red, Amber, Green) rating system, also known as a Traffic Light system, in the Loan Comments on your dashboard. The purpose of the new system is to help you assess the quality of your defaulted loans, and your expected return over a certain period of time.

Loans defaulted last week

Holiday provider. Loan 5386. Risk band C

This Hounslow business has been running since 2006 and is in arrears with their repayments. All affected investors have been notified.

Haulage provider. Loan 3807. Risk band C

This West Yorkshire business has been incorporated since 2010 and is in liquidation. All affected investors have been notified.

Textile machinery manufacturer. Loan 4264. Risk band B

This Kent business was established in 2009 and has ceased trading. 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

Providing more communications around bad debts

If you have any defaulted loans you may have noticed that we now apply a RAG (Red, Amber, Green) rating system, also known as a Traffic Light system, in the Loan Comments on your dashboard. The purpose of the new system is to help you assess the quality of your defaulted loans, and your expected return over a certain period of time.

This post will give you a bit more detail about this new system, and how we are applying it.

Timing

Every fortnight each member of the Collections & Recoveries team review  defaulted or late loans and (if appropriate) add in Loan Comment. We will add a comment where we have taken any steps in the recovery of the loan, or otherwise where there has been a significant development (such as a recovery or convening of a creditors’ meeting).

Where borrowers (and guarantors) are in a formal insolvency process the comments are likely be separated by 6 months or 12 months in accordance with the formal reports. We will explain timescales on these longer-term cases to keep investors updated.

Content of comments

The reason we are doing this is because you have told us you would like more information about the process of recovering bad debts. We think this new system should explain more about the progress and state of our negotiations.

Where we have agreed a payment plan, we will let you know where that payment plan will get you within 5 years from the date of the loan comment. If there is to be a full recovery within 5 years, then we will let you know how long it should take to get that result.

Whilst 90-95% of our recoveries come through the personal guarantee, we appreciate that investors are interested in why the borrower failed. Where possible, which may be when we receive a liquidator’s or administrator’s report, we will summarise the reasons for the borrower’s failure.

The RAG system relates to principal at default, but please note that we always try to recover all contractual interest (as it accrues), and if we consider it appropriate we will also try to recover any additional interest that may be payable on any outstanding principal after the end of the contractual term.

The RAG rating system

The parameters around the RAG system are as follows:

Red: This is where we expect no material recovery (i.e. less than 30p in the £ of outstanding principal at default within 5 years of the date of the comment), or where negotiations are at such a stage that we simply cannot estimate the likely outcome.

At the point of default, most loans will be Red, as we will be trying to contact the guarantors or in the midst of difficult and uncertain negotiations.  As guarantors start to get their financial affairs in order we would expect the loan to move to Amber or Green, and we will update the RAG rating accordingly.

Amber: This is where we expect a partial recovery (i.e. less than 90p in the £, but more than 30p in the £, of outstanding principal at default within 5 years of the date of the comment).  Often, Amber loans will end up Green, as a borrower or guarantor increases their monthly payments, or with the passage of time as a payment plan becomes a full recovery within 5 years.

Green: This is where we realistically expect a full recovery (i.e. 90p or more in the £ of outstanding principal at default within 5 years of the date of the comment).

Assumptions

In order to assess the estimated recovery in 5 years, we will primarily consider the terms of our agreed payment plans, and whether payments under that plan have been regular and in the amounts agreed.

If we are aware that a guarantor is remortgaging or selling a property, in our experience these loans end up as a full recovery within 2 years, and so we would give this loan a Green status.

We will take into account amounts specified in IVA proposals, and estimates provided to us by Official Receivers and Trustees in Bankruptcy. However, where we do not have any such proposals and are uncertain as to the level of recovery we will give the loan a Red status.

Legality

Please note that our estimates are non-binding and may change over time. We are not promising any recovery over any period, nor are we indemnifying you against any losses.

The information we provide will always be compliant with the Data Protection Act, and we will not give any information that we consider in any way prejudices the commercial interests of the borrower, guarantor or other creditors.

We hope that this new strategy provides you with greater information regarding late and defaulted loans, and will help you to understand the recovery process. If you have any feedback on how we could further improve the loan comments further, please let us know.

The Funding Circle team

 

We made it to The Sunday Times 100 Best Companies list! Weekly Lending Review

Week 10: 2 – 8 March 2015

We’re really pleased to have made it onto The Sunday Times Best Companies list, in straight at number 46!

New loans available to you

There are currently 71 loan requests on the marketplace which are all available for you to lend to.

The total value of new Funding Circle loans was £10,916,460, averaging at £66,160 per loan. The largest loan value was £407,000 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, value of loans and amount lent are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 2-Mar represents the week of 2nd – 8th March 2015.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Total amount lent

lent

Loan parts available to buy from other investors

secondary

News you should know

No change to minimum bid rates for April

Minimum bid rates will remain at their current levels for April:

A+: 6%

A: 8%

B: 9%

C: 10.2%

C-: 12.2%

Funding Circle named in Sunday Times 100 Best Companies

We’re absolutely thrilled to have made it to number 46 in The Sunday Times 100 best companies to work for! More than 570 firms entered and we’re excited to have done so well in what was our first year of entering. Interested in joining the team? Take a look at our jobs page for more information.

Join the conversation

David T, our VP of engineering, answered your techie questions on our community forum. You can join the conversation.

Loans defaulted last week

Off license. Loan 5972. Risk band B

This Liverpool business is in arrears with their repayments. All affected investors have been notified.

Mobility equipment supplier. Loan 4215. Risk band B

This Manchester business has been incorporated since 1997 and is in liquidation. All affected investors have been notified.

Advisory services. Loans 5627 & 2569. Risk band C

This London business was established in 2006 and is in liquidation. All affected investors have been notified.

Legal firm. Loan 2122. Risk band C

This Nottinghamshire business was established in 2008 and is behind with their repayments. 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

Borrowing £100,000 has helped me completely refurbish my new premises

Over the past 4 years we’ve enjoyed visiting small businesses across the country who have come to the Funding Circle marketplace, not only to find out how your lending has helped them, but also to hear their unique stories which we share with you.

For our latest business story we’re in Central London to visit Rufus Grantham, co-founder of BloodandSand Limited, who borrowed £104,000 in October 2014 from hundreds of Funding Circle investors. BloodandSand Limited runs 2 cocktail bars in London; ‘The Hide’ on fashionable Bermondsey Street, and their second establishment which has just opened near Bank underground station.

B60A2479

Rufus co-founded BloodandSand Limited more than 8 years ago with a university friend who shared his passion for delivering delicious drinks in an unrivalled atmosphere. Having successfully run “The Hide” for many years, they looked to open new location.

After searching for more than a year for their second site, they found a derelict pub in the City of London and both agreed that it was the perfect location, so applied for a loan to refurbish the premises. They have split the premises into 2 distinct venues, a cocktail bar in the basement called ‘Demon, Wise & Partners’ and a London themed bar called ‘The Arbitrager’ on the ground floor, where they’ll only stock London-brewed beers and London distilled gin to show support for their local economy. 

In this short video you’ll meet Rufus, hear more about why he started the business and what he liked most about using Funding Circle to help his business grow.

Do you live in London?

If you’re London-based and read the Evening Standard, you may have seen Demon, Wise & Partners mentioned as one of the most anticipated bar openings for 2015! Why not show your support and pop down and have a drink? They open in mid-March, so not long to wait now!

Are you interested in lending to businesses like Rufus’?

You can support small businesses like BloodandSand Ltd by lending to them, and you can earn a great return by doing so. Simply sign up online and use our investor information guide to get you started. We have thousands of loans which you can be a part of, making it quick and easy to build a diversified portfolio. Remember, by lending to businesses your capital is at risk.

Does your business need finance?

We’ve helped more than 7,300 business in both the UK and US access finance for a whole range of capital needs. You can apply online in less than 10 minutes.

Cheers all round for peer-to-peer funding revolution. February industry news

Newspapers - Copy

Democratising finance: Botín charts Santander’s digital course

Following the ‘democratising finance’ series from last month, the Financial Times takes a deeper look into how technology is impacting the way we finance small businesses. This piece touches on our partnership with Santander, and how technology companies are working alongside banks to help them contribute to the growth of small companies.  Another disruptive and exciting step towards helping more small businesses access finance.

Hargreaves to enter P2P lending market

Hargreaves Lansdown, the UK’s leading fund supermarket, announced that it is to set up its own peer-to-peer lending platform. They will be looking to compete with the UK’s largest operators and get a taste for the rapid growth in the industry. Peer-to-peer lending is expected to grow even more once it becomes included within ISAs.The Peer-to-Peer Finance Association is currently recommending that the government introduce a third Lending ISA.  James Meekings, co-founder, was quoted in the Financial Times following last week’s Alt Fi conference: “The Isa is going to change the industry.”

Too young for Pensioner Bonds? 5 other shortcuts to a better deal on your savings

Julia Rampen gives some great tips on how to make the most of our savings, with a round up of ISAs and peer-to-peer lending investments. As already mentioned, lending through Funding Circle will become included within the tax-efficient ISA. Exact timings are yet to be confirmed but we expect the government to respond to the consultation within the next month. It’s a big step forward for the industry and a great way for you to feel better about lending! Check out a few more tips about how to how to profit from peer-to-peer lending in this article in DepositAccounts. If you have any questions or would like to start a conversation, please check out our forum here.

The wisdom of the crowd or herd mentality? Crowdfunding looks tempting but it pays to tread carefully

As the alternative finance industry grows and many different companies and models are springing up, the Daily Mail took a look at the options available to investors. This article encourages first timers to try members of the Peer-to-Peer Finance Association, who have a demonstrable track record and have worked hard to build trust amongst consumers. Although peer-to-peer lending lies at the safer end of the spectrum and is regulated by the FCA, investors must remember that returns can go down as well as up, because your capital is at risk. At Funding Circle we believe that full transparency builds trust, and as a registered investor you can download our entire loanbook here.

Cheers all round for peer-to-peer funding revolution

Following our recent announcement that RBS will now refer small business customers they are not able to help to Funding Circle, Anthony Hilton discusses how the industry is growing and working with the wider financial ecosystem. He calls peer-to-peer lending and crowdfunding  ‘the phenomenon of our time’ and ‘a revolution indeed’ as the industry continues to boom. Nesta quotes that funds raised via these lending platforms have risen from £267 million in 2012 to an astounding £1.42 billion last year.

U.S. Victory Park Capital invests with peer-to-peer lender

This month we are pleased to announce that we have partnered with Victory Park Capital who will lend $420 million to both US and UK small companies over the next three years via the Funding Circle marketplace. By welcoming larger investors to Funding Circle, we are able to help thousands more businesses to access finance. Victory Park will be lending to businesses via whole loans – you can read more about this here. Sachin Patel, our head of UK Capital Markets, discussed the news on CNBC and you can also read more by Peter Renton on LendAcademy.

European market for online alternative finance surges

And finally, the Financial Times reminds us of the UK’s domination over the European alternative finance market following a benchmarking report by Nesta. Andrew Hagger’s article in the Independent looks at how peer-to-peer lending is becoming more mainstream as we shape the way that finance is provided, creating an easier and quicker approach to lending and borrowing.

Building more homes by offering new lending opportunities. Weekly Lending Review

Week 9: 23 February – 1 March 2015

February was a fantastic month for lending as £38.5 million made its way to small businesses across the UK.

New loans available to you

There are currently 56 loan requests on the marketplace which are all available for you to lend to.

The total value of new Funding Circle loans was £10,651,780, averaging at £64,000 per loan. The largest loan value was £350,000 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, value of loans and amount lent are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 23-Feb represents the week of 23rd February – 1st March 2015.

Weekly average gross yield (2 weeks rolling)

yield

Number of listed loans per week

number

Listed loan value per week

value

Total amount lent

lent

Loan parts available to buy from other investors

secondary

Offering the full suite of property loans

Over the last 12 months we have received a significant number of enquiries from businesses interested in taking shorter-term loans for property finance. In order to meet this demand, we are broadening the types of loans you’ll be able to lend to over the coming months.

Loans defaulted last week

Printing company. Loan 2398. Risk band C

This Caerdydd business was established in 1987 and is in liquidation. All affected investors have been notified.

Law firm. Loan 4015. Risk band A

This Merseyside business has been incorporated since 2008 and is in arrears with their repayments. All affected investors have been notified.

Contractor. Loan 1761. Risk band C

This Suffolk business was established in 2007 and is in arrears with their repayments. All affected investors have been notified.

Insurance broker. Loan 1221. Risk band B

This Northampton business was established in 2008 and is behind with their repayments. All affected investors have been notified.

Online retailer. Loan 5494. Risk band A

This Essex business was established in 2010 and is in liquidation. 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