Did you lend to this flower essence manufacturer? | Weekly Lending Review

Week 21: 18 – 22 May 2015

Back in 2013 The Flower Essence Repertoire took out a business loan so they could buy more raw materials to increase production. Based on the picturesque Isle of Gigha, in the Inner Hebrides, the business manufactures a range of flower essences, including orchid essences from orchids in their greenhouse, exporting them worldwide.

We visited founder, Don Dennis, to find out why he started the company. Read about Don’s Funding Circle experience on the blog.

New loans available to you

There are currently 53 loan requests on the marketplace which are all available for you to lend to.

The total value of new loans listed on the Funding Circle marketplace was £9,015,500, averaging at £79,470 per loan. The largest loan value was £500,000 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: 18-May represents the week of 18th – 22nd May 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

Aquatic and pond suppliers. Loan 3401. Risk band B

This Essex business was established in 2011 and has agreed to nominal payments. All affected investors have been notified.

Master subcontractor. Loan 8316. Risk band C

This Essex business was incorporated in 2004, and has ceased trading. All affected investors have been notified.

Cake baking and decorating company. Loan 10357. Risk band B

This Lancashire business has been running since 2011, and has been unresponsive. All affected investors have been notified.

Cleaning product supplier. Loan 8122. Risk band B

This Bedfordshire business was established in 2003, 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. Read what happens during the recoveries process on our blog.

Enjoy lending, The Funding Circle Team

What are you doing this weekend? | Weekly Lending Review

Week 20: 11 – 15 May 2015

Whether it’s a staycation in Scotland or Saturday night in Somerset, we’ve put together the Top 5 Funding Circle Weekend Retreats so every weekend will feel like a Bank Holiday. Our handy guide will help you explore Britain and support small businesses along the way.

New loans available to you

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

As part of lending to businesses, some may be unable to fully repay their loans, which is why we believe diversification is so important. We’ve created a short video which runs through the basics of diversification and how you can diversify at Funding Circle. Remember, by lending to businesses your capital is at risk.

The total value of new loans listed on the Funding Circle marketplace was £13,895,060, averaging at £79,954 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, value of loans and amount lent are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 11-May represents the week of 11th – 15th May 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

News you should know

Have any technical questions for us about the website? Our VP of Engineering David, will be answering your questions on our community forum. Ask your questions here.

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

Business telephone supplier. Loan 2882. Risk band C

This London business was established in 1995, and has placed itself in insolvent liquidation. All affected investors have been notified.

Financial management organisation. Loan 4131. Risk band B

This Birmingham business has been running since 2000, and entered administration in February 2015. All affected investors have been notified.

Art gallery. Loan 4803. Risk band C

This London business was incorporated in 2005, and is 3 months in arrears. All affected investors have been notified.

Security training company. Loan 4697. Risk band C

This Buckinghamshire business was established in 2009, and is proposing a Company Voluntary Arrangement. All affected investors have been notified.

Business consultancy service. Loan 6669. Risk band C

This London business was incorporated in 2008, and has entered into liquidation. All affected investors have been notified.

Energy services company. Loan 7765. Risk band B

This Belfast business was established in 1991, and is proposing a Company Voluntary Arrangement. All affected investors have been notified.

Accountant. Loan 1523. Risk band A

This Hampshire business has been running since 1998, and is one month 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. Read what happens during the recoveries process on our blog.

Enjoy lending, The Funding Circle Team

Top 5 Funding Circle Weekend Retreats

However you like to spend your weekends we’ve put together a handy guide to help you explore Britain and support small businesses along the way.

Staycation in St Andrews, Scotland

Whether you’re a keen golfer, or married to one, the Craigmore Guest House located in the heart of St Andrews is a must see. It is a pleasant stroll from the famous ‘Old course’, or if you can coax yourself off the golfing green there is St Andrews Castle and Cathedral, or even the beach to enjoy.

Craigmore House borrowed over £35,000 in November 2014.

Saturday night in Somerset crown at wells

Hop on down to Somerset and stay at the glorious 15th Century coaching inn at Wells. The Crown, who took out a business loan in 2012, is based in the heart of the historic City, a stone’s throw from Wells Cathedral and Bishop’s Palace. It even featured as an integral part of the smash hit comedy Hot Fuzz, filmed in Wells in 2006, and has a rustic Bistrot and Bar. The bar is named after Quaker William Penn (who gave his name to Pennsylvania USA) as he famously preached to a crowd from an upper window of the inn in 1685. You’ll be sure to learn something on this trip!

The Crown at Wells borrowed £50,000 from 674 investors.

Lounge in the Lake District

Situated on the edge of picturesque Grasmere Village, and surrounded by the majestic lakeland fells, the Rothay Garden Hotel is the perfect break for weary workers. After a long lakeland walk the hotel’s new Riverside Spa, complete with herbal pine sauna, hydro spa and heated infra-red loungers, is guaranteed to leave you feeling revitalised. Bliss.

Rothay Garden Hotel borrowed £95,000 from 1,064 investors back in March 2012.

Weekend escape in Wales

Spend a romantic weekend amongst the magnificent Welsh countryside at this stunning hilltop hotel. Located just 20 miles from Cardiff Llechwen, meaning ‘white slate’, guarantees a memorable visit. Splash out on a sumptuous four-poster room for a truly luxurious weekend.

Llechwen Hall Hotel borrowed £70,000 from 996 investors back in September 2014.

Merry in the midlandsblakelands

Fine furnishings, family heirlooms and antique furniture. A weekend at Blakelands Country House will be fabulous. Enjoy Afternoon Tea at The Lodge Restaurant or simply marvel at the impressive Queen Anne building. What fun!

Blakelands Country House borrowed £85,000 from 1,156 investors in December 2014.

Does your business need finance? We’ve helped more than 8,000 businesses in both the UK and US access finance. You can apply online in less than 10 minutes and check your business’ eligibility in 30 seconds.

Interested in supporting more small businesses? Read our complete list to Funding Circle chocolatiers or join to become investor. Remember, by lending to businesses your capital is at risk.

Enjoy Lending. The Funding Circle Team

 

Picture story: ‘Thank you to all those people who lent us money through Funding Circle’

Back in 2013 The Flower Essence Repertoire took out a business loan, funded by 266 investors, so they could buy more raw materials to increase production. Based on the picturesque Isle of Gigha, in the Inner Hebrides, the business manufactures a range of flower essences, including orchid essences from orchids in their greenhouse, and exports them worldwide.

We visited founder, Don Dennis, to find out why he started the company. Here’s the story of his business and his experience of Funding Circle in Don’s own words:

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Do you need a business loan?

We’ve helped more than 8,000 businesses in the UK and US access finance for a range of finance needs. You can check your eligibility online in just 30 seconds.

How our collections process works (part 1)

Lending to businesses can deliver attractive returns to investors while helping established British businesses to access the finance they need to grow. As part of lending to businesses, some will be unable to fully repay their loans, which is why we believe diversification is so important.

When a business falls behind with their repayments, we have a process in place to try to get them back on track. We have spent some time with our Collections and Recoveries team to find out more about how they do this, and wanted to share this with you.

In this post and the next, we explain in detail how our collections and comments process works, which we hope you will find useful.

THE COLLECTIONS & RECOVERIES PROCESS

(i)                 Late Payment

We typically find out if a direct debit has failed 3 days before the payment date.  At this point we automatically send an email to the borrower, and we try to retake the direct debit.  We will also  phone the borrower to ensure that the relevant account is in funds.

We will be informed of the second direct debit failing within 4 business days of taking it.  Such failure results in us sending a formal demand letter to the borrower and the guarantors.

We then spend the next 6 days phoning and emailing the borrower and the guarantors to arrange a manual payment to clear the arrears.

Unless we are arranging a payment plan, if the loan is still late 7 days after the payment date we will charge an administration fee of 15% of the arrears, and send another demand letter.  The purpose of the fee is to encourage borrowers to get the loan back to fully performing, and not to prioritise other creditors over their debt to Funding Circle investors. The fee, if received, goes towards our irrecoverable third party costs for recovery action which we start.

We will continue to contact the borrower and guarantor through phone calls and emails.

It is important to note that behind the scenes we work hard to contact borrowers and guarantors. We use a variety of techniques including tracing other phone numbers and addresses, and checking other business interests. We believe that it is in both our interests to resolve each late payment or defaulted loan as quickly as possible and have money repaid to you.

Depending on the circumstances, if we have had no contact from the borrower or the guarantors for at least 17 days we may then decide to Default the loan.

(ii)               Defaulted loans

When the loan is defaulted we demand full payment of the full outstanding liability from the borrower and the guarantors.  This has the effect of crystallising the debt of the guarantors, and enables us to commence legal action (or formal insolvency action) against them.

Most of our recoveries are through the guarantors, and so our enforcement action will end up in one of the four ways set out below.

1. Payment plans

We will always seek to agree a fair and affordable payment plan with borrowers and guarantors.  We want guarantors to get back on their feet and repay the loan in full over time, and usually we will not agree to an early settlement figure for less than 100p in the £.  We always ask for contractual interest to be paid too. This strategy appears to be quite successful although it can be frustrating for investors initially as often payments are small at the start of a payment plan, and take several months until they increase.  If the payments are below a certain threshold, we will require security on the guarantor’s property.

2. Individual voluntary arrangements

We do not accept informal settlements and will only allow the debt to be reduced if the guarantor enters into an Individual Voluntary Arrangement (IVA).  The reason for this is that an insolvency practitioner, who is an officer of the court, is standing behind the IVA and is responsible for ensuring that the proposal is fair and accurate.  This is not the case in an informal arrangement. Also, an IVA is designed to give people another chance, and we need to respect the legal purpose behind this procedure.

3. Bankruptcy

Sometimes bankruptcy can be the right option for an individual.  When a guarantor is made bankrupt, we will always try to get an insolvency practitioner from our panel appointed as Trustee in Bankruptcy (i.e. the person who takes controls of the bankrupt’s assets and carries out various investigations).  However, sometimes this is not possible.  When an individual enters bankruptcy it is very rare that there will be a material recovery for investors.

4. Court Action

Sometimes court action may result in us appointing High Court Enforcement Officers (i.e. bailiffs) to agree a payment plan with a guarantor, or we seek to obtain a charge on their property and then an Order for Sale. This is very much the last resort for us.

We will always stop any legal action in its tracks if the guarantor starts communicating with us again. That said, if we have any reason to believe that a guarantor is deliberately trying to deceive us (rather than simply being afraid to face up to his or her responsibilities), we will always take legal action or commence bankruptcy proceedings rather than try to negotiate or approve an IVA.

What’s next?

We hope this has been helpful in understanding more how the collections process works. Stay tuned for the next installment where we’ll run through how we update you: loan comments.

Are you diversified? | Weekly Lending Review

Week 19: 4 – 8 May 2015

Our aim at Funding Circle is to help you have the most enjoyable experience possible, by earning attractive returns in a sustainable way.

We’ve created a video which runs through the basics of diversification, why we believe it’s so important and how you can diversify at Funding Circle. Learn more about diversification here.

New loans available to you

There are currently 50 loan requests on the marketplace which are all available for you to lend to.

The total value of new Funding Circle loans was £7,722,420, averaging at £69,039 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, value of loans and amount lent are reported weekly. The dates on the graph should be read as ‘week beginning’, for example: 4-May represents the week of 4th – 8th May 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

Jewellery and gift shop. Loan 4608. Risk band B

This Bath business was incorporated in 2007, and has entered insolvent liquidation. All affected investors have been notified.

Film editing company. Loan 5904. Risk band B

This Derbyshire business has been running since 2008, and has entered insolvent liquidation. All affected investors have been notified.

Engine supplier. Loan 6521. Risk band A

This Lancashire business was established in 2002, and has entered insolvent liquidation. All affected investors have been notified.

Medical research company. Loan 3485. Risk band A

This Welsh business was incorporated in 2002, and the guarantor has proposed an individual voluntary arrangement. All affected investors have been notified.

Digital language tools. Loan 8883. Risk band A

This London business has been running since 2011, and the business is entering into a company voluntary arrangement. 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 does diversification at Funding Circle mean?

Our aim at Funding Circle is to help you have the most enjoyable experience possible, by earning attractive returns in a sustainable way.

In this short video we run through the basics of diversification, why we believe it’s so important and how you can diversify at Funding Circle.


 

 

How many businesses are you lending to?

If you’re lending to less than 100 businesses you may be missing out on a more stable return.

Log back into your account today to see how many loans you hold. Could you increase this number over the coming months? Remember, by lending to businesses your capital is at risk.

Want to know more?

You can visit our statistics page for further details on the benefits of lending to at least 100 businesses.

As of 1st October 2017, approximately 91% of investors who have lent to 100 businesses equally are earning more than 5% per year (after fees and bad debt, but before tax). This is based on investors who have been lending for at least 1 year and have been at the stated level of diversification for at least 75% of the days they have been lending for. Remember, past returns are not necessarily a guide to future returns.

We update these numbers regularly so you can compare your account against others and find out how much other investors are earning by level of diversification.

We’re on-hand to help if you have any questions about your account or how you can diversify. Simply call us, or send us an email.

The Funding Circle team

 

Transcript

Our aim at Funding Circle is to help you have the most enjoyable experience possible, by earning attractive returns in a sustainable way.

In this video we’re going to talk about diversification, which simply means lending small amounts of money to lots of different businesses.

It’s really easy to become diversified at Funding Circle. Lending £2,000 or more will help you build a portfolio of at least 100 businesses. Choose one of our lending options and you’ll automatically spread your funds across businesses like David’s manufacturing company in Durham and Celia’s farm in Somerset.

Investors who lend small amounts to many different businesses, help a lot more small businesses access the finance they need to grow, and also earn a return which is much more stable.

Here’s an example of how diversification at Funding Circle works. You have £2,000 and lend £20 to 100 businesses. If some businesses are unable to pay back their loan, it won’t affect your overall return too much.

Statistically, every investor who has lent to at least 100 businesses equally has earned a positive return. In fact, 90% of investors who have followed these 2 simple guidelines are earning more than 5% per year.

-Lend to 100+ businesses

-Lend 1% of your total to each one

However, if you take the same £2,000 and lend £500 to 4 businesses, if one of those businesses is unable to repay then your overall return will drop significantly.

By spreading your money and helping hundreds of British businesses, you can see your money, and the UK economy grow.

Remember, by lending to businesses your capital is at risk.

 

You’ve helped build over 400 new homes! | Weekly Lending Review

Week 18: 27 April – 1 May 2015

Funding Circle investors have now lent more than £50 million to small businesses who develop property, helping to build over 400 new homes across the country!

New loans available to you

There are currently 54 loan requests on the marketplace which are all available for you to lend to.

The total value of new Funding Circle loans was £7,661,060, averaging at £59,852 per loan. The largest loan value was £565,000 and the smallest loan value was £6,200.

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: 27-Apr represents the week of 27th April – 1st May 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

Blacksmiths. Loan 4027. Risk band A

This Perthshire business has been running since 2003, and has entered liquidation. All affected investors have been notified.

Refurbishment and building support business. Loan 2739. Risk band A

This Derbyshire business has been incorporated since 2003, and has entered insolvent liquidation. All affected investors have been notified.

Building contractors. Loan 4578. Risk band B

This Staffordshire business has been running since 1999, and their payment plan has overrun. 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

$150 million investment in marketplace lending. April industry news

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Funding Circle raises $150m in new boost for London tech sector

We were really pleased to announce a large equity investment into Funding Circle last month. New investors include DST Global, who have invested in companies such as Facebook, Twitter, Airbnb and Alibaba. The money will ensure we 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 investors. Investors have now lent $1 billion collectively to small businesses in the UK and US, so thank you for your continued support and lending. You can read the full press release here  and find more coverage in the New York Times, Wall Street Journal and TechCrunch. If you have any questions, please get in touch.

Funding Circle raises $150 mln, aims to be top UK lender to SMEs

We were 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. Our CEO, Samir Desai, was on CNBC and Bloomberg to discuss the news.

‘I invested £4k in peer-to-peer lending’: Fed-up savers turn to riskier investments – we weigh up the alternatives tempting them

As people continue to look for more attractive returns, the number of investors that are tempted to cut out the banks and look towards peer-to-peer lending platforms continues to rise. In 2014, individuals lent £1.2 billion via peer-to-peer, or marketplace, lending; nearly double the amount in 2013. This article takes a look at what is on offer right now and highlights the benefits of using an online marketplace like Funding Circle, including the ability to access your money early and sell your loan parts onto other investors. Remember your capital is at risk, and returns can go down as well as up.

How Larry Summers would regulate peer-to-peer lenders

Last month our team attended LendIt, the largest conference dedicated to connecting the global online lending community, which has grown immensely over the past year. In this article, Larry Summers, Former US Treasury secretary and speaker at LendIt, talks about his views on regulation, and some key principles on the best way forward. He also highlights the importance of transparency. At Funding Circle, we believe transparency builds trust, which is why you can download our full loanbook here. If you need more evidence that the online lending market is exploding, just take a look at the crowd at this year’s conference on CNBC.

Boutique chocolate makers growing faster with help from thousands of small investors

This article is about the story of James Hutchins, and how he borrowed money for his business, James Chocolates, through the Funding Circle marketplace. More than 2,500 investors have lent £166,000 to artisan chocolatiers in the past year. Great news for all of you chocolate lovers out there. Remember, it’s important to lend small amounts to hundreds of businesses at Funding Circle in order to minimise risk.

Karen Mills supports marketplace lending

In a bylined article in the Guardian by small business champion, Karen Mills, who was Administrator of the Small Business Administration in the US, we hear why support for marketplace lending platforms is so key. She acknowledges that the future of small business finance isn’t going to come solely from traditional banks. There are now many options for small business owners looking to grow and expand, and the challenge going forward is to raise awareness of these.