Picture story: Meet Introducer Richard Hounsell

Richard Hounsell is a Director at South West Commercial Finance and has been involved in commercial finance for his whole working life. He was first introduced to Funding Circle through the NACFB. Since then he has used it many times for clients looking to access fast, flexible finance.

We visited Richard to discuss why he continues to bring clients to Funding Circle, and why he felt it was a good fit for this particular business, a Neal’s Yard Remedies franchise in Bath. In Richard’s own words, here’s the story of his Funding Circle experience:

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If you’d like to have a chat with our dedicated business development team about how we might be able to help your clients, then please give us a call on 020 3667 2208 or email us.

$150 million investment to fuel growth | Weekly Lending Review

Week 17: 20 – 24 April 2015

Last week we were delighted to announce that we had completed a $150 million equity investment. This latest round of funding will help us to continue to improve our offer for both borrowers and investors; helping more businesses borrow, and improving the investment experience for all of our investors. Read more about the announcement on the blog.

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 £8,907,920, averaging at £65,499 per loan. The largest loan value was £400,000 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: 20- Apr represents the week of 20th – 24th April 2015.

Weekly average gross yield (2 weeks rolling)

Yield

Number of listed loans per week

Loans listed

Listed loan value per week

Loan Value

Total amount lent

Amount Lent

Loan parts available to buy from other investors

Loan parts available

Positively perfect picnic ideas from your favourite Funding Circle businesses

Summer is coming. The weather is slowly improving and we have two May Bank Holidays to look forward to. Make it a summer to remember by showing your support to small businesses across the country with our positively perfect picnic ideas. Read about preparing the perfect Funding Circle picnic 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

Digital Media Agency. Loan 5069. Risk band A

This Bedfordshire business has been running since 1999, and has entered into administration. All affected investors have been notified.

Restaurant. Loan 5219. Risk band C-

This Argyll business has been incorporated since 2012, and is late in its 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

 

Top Google Advertising Tips for Small Businesses

Untitled 1 - birgittaBirgitta is the Digital Marketing Manager at Funding Circle, and has worked at the company since December 2012. Originally from Sweden, she is a digital specialist and joined Funding Circle to bring paid search in-house.

We asked Birgitta for her Top Tips to help businesses looking to explore Paid Search.

What is paid search?

Paid search is advertising within the sponsored listings of a search engine, for example Google Ads (also called Adwords). The top three results of a Google search and the adverts on the right hand side are sponsored. My job is to make sure Funding Circle appears there for the relevant keyword searches.

What were the first things you learnt about paid search?

Data! The endless amounts of real time data you get access to. It’s very powerful as it allows you to run tests on wording in adverts or landing pages, these findings can later be applied across the business.

What would you say are the key items people should think of when setting up paid search?

Select the keywords you bid on carefully and start out small. Ensure the advert copy is relevant to the keyword and that the landing page is optimised to convert the user (whether that is sign up for a newsletter or purchase a product).

What is it that you do day to day?

Lots of testing! Advert copy testing, landing page testing, keyword expansion and funnel analysis to make sure we’re managing spend efficiently.

Are there any online tools that might help businesses looking to set up paid search?

Google Adwords provides a free keyword expansion tool called keyword planner. This should be used when setting up a paid search account as it estimates search volumes for selected keywords and helps expand on the keywords you’ve already identified for your business.

Top tip?

When evaluating performance, if you choose to bid on your own brand terms, always split brand traffic from generic as they perform completely differently.

Prepare the Perfect Funding Circle Bank Holiday Picnic

Summer is coming. The weather is slowly improving and we have two May Bank Holidays to look forward to. Make it a summer to remember by showing your support to small businesses across the country with our positively perfect picnic ideas.  

Whether you’re having a family day out or simply enjoying a picnic in your local park we’ve put together a sumptuous selection of marketplace food and drink.

The perfect set up

Picnic Mat – Rummy Stripe picnic mat - stripes company

For the seasoned picnic goer this vintage inspired picnic mat is a must have. Complete with khaki waterproof nylon lining, a delightful turquoise border, and even a beautiful Bolster Bag for easy carrying. The only question will be finding the perfect picnic spot.

The Stripes Company borrowed £25,000 from 315 investors back in January 2011.

What to drink?

JuicesApple-Elderflower

Inspired by the bounty of England’s orchards and hedgerows, Lovely Drinks produces award-winning handmade sparkling soft drinks and juices. Choose from their wide range of flavours, including Apple, Apple & Elderflower or Apple & Gooseberry. These juices are made with all-natural flavours in the North Somerset countryside.

Lovely Drinks borrowed £25,000 from 336 investors in May 2014.

Wine

Lindley Fine Wines based near Huddersfield has a range of over 350 wines for all tastes, occasions and pockets. They’ll be delighted to help you choose the right wine to compliment your food. Just don’t forget the glasses!

Lindley Fine Wine borrowed £6,000 from 108 investors in January 2015.

The main event

Wholemeal or more adventurous breads

Whether you favour a slice of focaccia or a more traditional wholemeal loaf, The Dutch Bakery in Southport has something to suit every taste. Established in 1959 by Nic and Vera Klassen, the family-run bakery is now managed by their third son, Derek. Now just how to fill your barmcake…

The Dutch Bakery borrowed £50,000 from 704 investors in March 2014.

Cured meats

Whether its Wiltshire, Smoked, York or Shropshire black; glazed with honey and mustard or lashings of marmalade, a succulent ham is a picnic staple. Dukeshill Ham has a selection of the very best hams cured the “old fashioned” way.

Dukeshill Ham is committed to sustainable and ethical farming and borrowed over £90,000 from 1195 investors back in August 2013.

Chutney’s, relish and accompaniments

Voted one of the 50 best delis in the country, Deli Flavour stocks award-winning relishes along with olives, antipasti and a range of cheeses. From the traditional whole grain English mustard or Westmoreland Chutney through to exotic and spicy chilli jam or hot banana pickle, these condiments will add a tasty twist to your picnic. They have two shops in Leicester and a selection available online.

Deli Flavour borrowed £25,000 from 275 investors back in November 2013.

A sweet treatlindseys cheesecake pots lime

Based in Barnstaple & Bideford, North Devon, Lindsey’s Cake & Dessert Shop bakes award-winning cakes, cheesecakes and desserts. Choose from five different delicious cheesecake flavours in a handy picnic friendly pot. Delicious!

Lindsey’s Cake & Dessert Shop borrowed over £30,000 from 479 investors back in March 2014.

Just sit back and relax

 

Does your business need finance? We’ve helped more than 7,000 businesses in both the UK and US access finance for a range of requirements. You can apply online in less than 10 minutes and check your eligibility in just 30 seconds.

Are you interested in lending to businesses through Funding Circle? Create an account online and start lending the same day. Remember, by lending to businesses your capital is at risk.

Enjoy Lending. The Funding Circle Team

 

Funding Circle announces $150 million investment to fuel growth

Today we’re delighted to announce that we have completed a $150 million equity investment, in a round led by DST Global, with participation from Baillie Gifford, a fund managed by BlackRock, Sands Capital Ventures and Temasek. This latest round of funding 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.

We’re also pleased to welcome David Yu and Chitra Nayak to the team. David is the former CEO and CTO of Betfair and joins us as Global Chief Product Officer. He will oversee both technology and product going forward and we look forward to introducing you to him soon. Chitra joins us from Salesforce and is our new Chief Operating Officer in the States.

Your collective lending, both here in the UK and in the US, has now passed $1 billion globally. This is a huge milestone and we want to thank you for your continued support and lending. You are on track to lend $1 billion over the next year, showcasing the huge potential of marketplace lending on the global economy.

You can read the full press release for today’s news here and read some of the coverage in the Financial Times, New York Times and Reuters. Our CEO, Samir Desai, was also on the Today Programme this morning discussing the news. Listen in at 23 minutes 50 seconds here.

We are talking about today’s news on our forum, so come and join the conversation.

The Funding Circle team

News

Over £600 million lent through the marketplace | Weekly Lending Review

Week 16: 13 – 17 April 2015

This week we were delighted to hit the 10,000 loans to UK businesses milestone. We also passed £600 million lent through the Funding Circle marketplace since 2010!

You are now helping to lend  more than £40 million a month to established small businesses, and the Funding Circle marketplace is currently one of the largest net lenders to small businesses in the UK. Since launch, your lending has created an estimated 24,000 jobs.

New loans available to you

There are currently 74 loan requests on the marketplace which are all available for you to lend to.

The total value of new Funding Circle loans was £6,280,940, averaging at £64,700 per loan. The largest loan value was £460,000 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: 13-Apr represents the week of 13th – 17th April 2015.

Weekly average gross yield (2 weeks rolling)

Yield

Number of listed loans per week

Loans listed

Listed loan value per week

Loan value

Total amount lent

Amount Lent

Loan parts available to buy from other investors

Loan parts

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

Rawdon Motors. Loan 3588. Risk band B

This Yorkshire business has been running since 2011, and has entered into an individual voluntary arrangement. All affected investors have been notified.

Open Business Services Limited. Loan 7915. Risk band C

This Middlesex business has been incorporated since 2012, and is late in its 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

 

What a week!

This week we were delighted to hit the 10,000 loans to UK businesses milestone. We also passed £600 million lent through the Funding Circle marketplace since 2010!

Investors are now lending more than £40 million a month to creditworthy small businesses, and the Funding Circle marketplace is currently one of the largest net lenders to small businesses in the UK. Since launch, this has created an estimated 24,000 jobs.

Lakeland Picnic - banner

Michelle Partington has been running Lakeland Picnic since 2007, making homemade burgers and sausages from their base in the Lake District. In September 2013, the business borrowed £36,000 from 221 people across the UK, alongside the UK Government, to revamp the look of their street stalls.

Michelle said: “There was a list of nearly 5 pages of people who had lent me money…I was nearly crying: these people believe in what I’m doing!”

Are you interested in lending to businesses like Michelle

You can support small businesses like Lakeland Picnic 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.

 

News

Picture story: how over 5,000 people are helping build homes in London

Back in April 2014, we expanded the types of loans we offer to include property loans and in the past 12 months, £45 million has been lent to small businesses in the property sector.

London-based property development company Medina Capital Investments has borrowed £890,000 from over 5,000 people through Funding Circle since September 2014. They are part of the way through the development they’re working on in West London, and are expecting to complete the construction and sale of 2 family homes by March 2016.

We visited Nidal Al-Khail, founder of Medina Capital Investments, to look at the site where the homes are being built. Here’s the story of his business and his experience of Funding Circle in Nidal’s own words:

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Property development loans were available between April 2014 and April 2017. If you work in the property industry and are looking for finance, we may still be able to help you with an unsecured loan up to £350,000 with a personal guarantee, or a secured loan up to £1 million.

Get an instant quote online or speak to our dedicated team today on 0800 048 8747.

 

Will you take advantage of pension freedoms? | Weekly Lending Review

Week 15: 7 – 10 April 2015

Ahead of the pension changes that will allow you to draw down your savings as cash, we’re interested in what you are planning to do. Please take part in our short survey and we’ll share the results with you.

New loans available to you

There are currently 42 loan requests on the marketplace which are all available for you to lend to.

The total value of new Funding Circle loans was £6,609,740, averaging at £67,000 per loan. The largest loan value was £460,000 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: 6-Apr represents the week of 6th – 12th April 2015.

Weekly average gross yield (2 weeks rolling)

Yield

Number of listed loans per week

Loans Listed

Listed loan value per week

Loan value

Total amount lent

Amount lent

Loan parts available to buy from other investors

loan parts

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

Kitchen designers. Loan 4193. Risk band C-

This Essex business has been incorporated since 2010, and will shortly be liquidated. All affected investors have been notified.

Seafood distributors. Loan 6497. Risk band A

This Lincolnshire business has been running since 2006, and is in administration. 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

 

 

Another great Budget for marketplace lending. March industry news

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Peer-to-peer investors to get savings tax break

Hot off the heels of the announcement in the Autumn Statement that investors will be able to offset their losses against income tax from this month, the Chancellor announced last month that peer-to-peer lending would be included within the new Personal Savings Allowance. The tax break will apply to both peer-to-peer lending and cash savings, in the latest boost to the sector. Read more about what the Budget meant for your savings and investments in the Financial Times, Daily Telegraph, the Times and on our blog. After advice from HMRC, we have also made a change to the way we charge for loan servicing. Neither investors nor borrowers will pay any more, and you can read the full details here. Please get in touch with any questions.

Lending to small businesses rises sharply as confidence improves

Some positive news last month that traditional sources of finance are beginning to lend more to small businesses again. The Federation of Small Businesses conducted a study that showed 60% of loan applications were approved in the past three months compared to only 45% a year ago. As the landscape continues to become more competitive, this is only good news for small businesses who are trying to access finance. 77% of businesses who have already borrowed through Funding Circle would always come back to us first, over a bank, showing the demand that exists for fast, fair and transparent finance.

Britain’s quiet fintech revolution has begun – and we’re determined to back it

“So what is fintech?” In this article, written by Andrea Leadsom, City Minister and Economic Secretary to the Treasury, she discusses the full spectrum of financial technology  and how it is transforming the way people can lend directly to small businesses in their community and across the country. At Funding Circle, we are right in the middle of this revolution, with ever-growing awareness amongst investors and borrowers, as well as continued support from the Government to help further develop this new source of finance. An exciting future for investors and businesses in the UK is upon us.

After 10 years, has it paid to be a peer-to-peer lender?

10 years ago this month, a new way to grow and invest your money began when Zopa, a peer-to-peer lender for personal loans, launched. Since then over £2 billion has been lent out via this model in the UK alone, helping thousands of people and small businesses prosper across the country. Read more about how the industry has blossomed over the years in the Independent.

This is the future of savings – but you can profit today

This piece follows the story of a mother using peer-to-peer lending as a way to save money for her children to go to university. With £11,000 invested to begin with, and assuming she continues to deposit £50 each month, she will have saved £27,815 in 11 years. She states that she isn’t concerned that peer-to-peer lacks deposit protection because her money is lent out in small amounts to many people and companies.

UK scheme to promote alternative lenders to be running by 2016

Also to come out of the recent Budget Statement, from 2016, banks will be mandated to refer small businesses to financial companies when they aren’t able to lend. The British Bank is leading the process with careful steps to get the system implemented to become a designated clearing platform. Exciting news for those small businesses that aren’t aware of the other forms of finance and great news for us in being able to help them succeed.

Out of the pension pot and into … ? It’s time to rethink your retirement

This month, the annuity changes announced last year will come in, meaning people will have more freedom when it comes to thinking about how best to maximise their pension pots. Everyone over 55 will be able to draw down the cash in their pension and invest it how they wish. As people look to make their money work harder, peer-to-peer lending is an attractive option. Added to this, the news that the lifetime allowance in a pension has been reduced from £1.25 million to £1 million, people will be searching out higher returns from their savings and investments in order to compensate for the reduction in tax benefit. At Funding Circle, you can earn attractive returns without the volatility of the stock market, but always remember that when you lend, your capital is at risk.

Did you lend to this Surrey technology company 18 months ago?

Danny Long set up his technology business more than 10 years ago. Pure Technology helps other small businesses make sure their IT systems are robust, their communications secure, and their processes efficient.

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Pure Technology’s story

Back in October 2013, Danny was looking to take out a loan to help his business with cashflow and came across Funding Circle. After completing the online application and passing our credit assessment, more than 1,200 individuals lent £99,500 to Pure Technology. Each investor lent as little as £20 to the Surrey business.

Earlier this year, we went to meet Danny and the team so we could see first-hand how their loan has helped the business over the past 18 months.

In this short video you’ll meet Danny, see the team in action and have an understanding of how your lending helps small businesses across the UK.

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Are you interested in lending to businesses?

You can support businesses like Pure Technology and you can earn a great return by doing so. It takes minutes to sign up online and you can use our investor information guide to help you get 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.

Do you need a business loan?

We’ve helped more than 7,600 businesses in the UK and US access finance for a range of finance needs. You can check your eligibility online in just 60 seconds.

Record-breaking start to the year | Weekly Lending Review

Week 14: 30 March – 2 April 2015

During the first quarter of 2015 (1 January to 31 March) 1817 businesses borrowed £110 million through the marketplace. This means 50% more businesses borrowed in comparison to the same period last year, thanks to your lending.

New loans available to you

There are currently 51 loan requests on the marketplace which are all available for you to lend to.

The total value of new Funding Circle loans was £9,118,000, averaging at £68,000 per loan. The largest loan value was £400,000 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: 30-Mar represents the week of 30th March – 2nd April 2015.

Weekly average gross yield (2 weeks rolling)

Yield real jpeg

Number of listed loans per week

Listed

Listed loan value per week

Loan value

Total amount lent

Amount Lent

Loan parts available to buy from other investors

Loan parts available

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

IT support service. Loan 6526. Risk band C-

This Surrey business has been incorporated since 2011, and will shortly be liquidated. All affected investors have been notified.

Heating Engineers. Loan 5694. Risk band B

This North West business has been running since 2005, 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

Updates to our T&Cs and Talking Tax | Weekly Lending Review

Week 13: 23 – 27 March 2015

March has been a busy month at Funding Circle. The Chancellor announced the launch of the Personal Savings Allowance in the Budget meaning that from April 2016, we estimate more than 80% of investors will be able to earn tax free returns at Funding Circle. See Talking Tax for more information.

New loans available to you

There are currently 66 loan requests on the marketplace which are all available for you to lend to.

The total value of new Funding Circle loans was £12,135,000, averaging at £61,600 per loan. The largest loan value was £400,000 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-Mar represents the week of 23th – 27th March 2015.

Weekly average gross yield (2 weeks rolling)

Yield

Number of listed loans per week

number

Listed loan value per week

Loan value

Total amount lent

Amount lent

Loan parts available to buy from other investors

Loan parts available

News you should know

T&Cs

We have made some changes to our T&Cs for investors (specifically clauses 8.1 and 15.1), clarifying the way we cover the cost of servicing loans. Our loan conditions have also been updated which means you’ll need to re-accept them before placing a  bid, or, buying a loan part. Please view our updated terms and conditions, or contact a member of our customer service team if you have any questions.

Talking Tax

Included in the March Budget were a number of new announcements relating to lending through Funding Circle. Additionally, we have recently received news from HMRC regarding changes to how investors are required to pay tax on their lending. Following these announcements and for clarity, read about what this means to investors 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

Footwear retailer. Loan 3172. Risk band C

This North West business has been incorporated since 1994 and is in liquidation. All affected investors have been notified.

Machine tool manufacturer. Loan 6707. Risk band A

This Lancashire business has been running since 1995 and is in liquidation. All affected investors have been notified.

Commercial printers. Loan 6784. Risk band C

This Oxfordshire business was established in 2007 and is in liquidation. All affected investors have been notified.

Building contractors. Loan 5726. Risk band B

This Essex business has been running since 2005 and is in liquidation. All affected investors have been notified.

Domain management company. Loan 121. Risk Band B

This London business has been incorporated since 2000 and owes a small amount of money until this loan is repaid in full. All affected investors have been notified.

Anti-vandal manufacturer. Loan 4648. Risk Band B

This East Sussex business was established in 2005 and is now 4 months in arrears. 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

 

Talking Tax

Included in the Budget last week were a number of new announcements relating to lending through Funding Circle. Additionally, we have recently received news from HMRC regarding changes to how investors are required to pay tax on their lending. Following these announcements we wanted to clarify what this means to investors.

Personal Savings Allowance

As some of you will be aware, the Chancellor announced in the Budget the launch of the Personal Savings Allowance. From April 2016 the first £1,000 of interest for basic rate taxpayers and the first £500 of interest for higher rate taxpayers will be tax free. Importantly this applies to both interest earned from traditional savings accounts or through peer-to-peer lending.

This is fantastic news for investors and a significant step by HMRC. We estimate this change will ensure that more than 80% of investors will now be able to earn tax free returns from Funding Circle, meaning you keep even more of your earnings.

Servicing fees

HMRC has recently confirmed that from 6th April investors will have to pay tax on the gross interest rate before deduction of fees. As a result we have made changes to the terms and conditions for investors and borrowers to clarify the way we cover the cost of loan servicing.

From April 6th we will no longer charge an annual investor fee. Instead we will take this same amount directly from the borrower repayments as a servicing fee.

There is no change to the amount paid by borrowers or the amount received by investors.

This change is reflected in clauses 8.1 and 15.1 and you can find updated investor terms and conditions here.

The loan conditions will also be changed (update to clause 5.2) to reflect the way in which fees are deducted, and you will be asked to accept them when you next bid. We hope this provides clarification.

Whilst making this change, we also made some additional amendments to the loan conditions. We have simplified the wording around the completion fee taken by Funding Circle from borrowers in clause 5.1, and deleted clause 8 which refers to our ability to restructure loans which we no longer require. This has also been removed from the terms and conditions for investors; where clauses 6.6 – 6.9 have been deleted.

Bad debt tax relief and ISA update

As we mentioned in the previous post, the Chancellor has confirmed that through self-assessment individuals will be able to make a claim for relief on losses incurred from April 2015. HMRC is still looking at the detail of this and we will provide further information once it has been clarified as to how this will work. You can read its proposed criteria for relief from bad debts here.

Additionally the Treasury has confirmed that you will be able to use your ISA to lend through Funding Circle by April 6th 2016.  We’re working with the Treasury around what type of ISA your lending will be included in and you can read more about our recommendations for a Lending ISA here.

Whilst the majority of investors will benefit from tax-free lending through the Personal Savings Allowance, these new changes will benefit every individual investor and is another sign that lending through marketplaces like Funding Circle is becoming a mainstream way for individuals to earn attractive returns on their money.