Furnishing the set of Downton Abbey, thanks to over 2,000 people | Weekly Lending Review

Week 26: 22 – 26 June 2015

The Stripes Company, based in Chester, supplied delightful deckchairs and sun shelters for the set of Downton Abbey! A striped fabric specialist, they have borrowed over £175,000 across 3 Funding Circle loans since 2011 to help with cashflow. Founder Maria discusses her experience of Funding Circle on the blog.

New loans available to you

There are currently 47 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 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.

The total value of new loans listed on the Funding Circle marketplace was £11,375,820, averaging at £64,811 per loan. The largest loan value was £430,000 and the smallest loan value was £7,500.

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: 22-June represents the week of 22nd – 26th June 2015.

Weekly average gross yield (2 weeks rolling)

WLR 26 Yield

Number of listed loans per week

WLR loans listed

Listed loan value per week

WLR 26 Loan value

Total amount lent

WLR 26 Amount lent

Loan parts available to buy from other investors

WLR 26 Loan parts

News you should know

We’re introducing a new risk band and renaming C-

We’re excited to announce that we’re introducing a sixth risk band, E, to help more small businesses access finance, whilst offering investors more borrowers to lend to. These loans will be listed on the marketplace over the coming weeks.

Within the next few weeks, C- will also be renamed to D to make our risk grading easier to understand. The new risk band structure will be: A+, A, B, C, D, E,  where A+ is lowest risk. Please note all loans parts you hold which are C- will be renamed to D shortly.

More information about the new risk band and renaming risk band C- to D can be found on our blog or if you have any questions about this update please contact us.

Providing more information around defaulted loans

If you have any defaulted loans you may have noticed we apply a RAG (Red, Amber, Green) rating system, also known as a traffic light system, in the loan comments on your dashboard. This 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

Retail outlet. Loan 8629. Risk band B

This Glasgow business was established in 2008 and is entering liquidation.

Building contractor. Loan 3322. Risk band C

This Merseyside business was incorporated in 2007 and has entered insolvent liquidation.

Heating control specialists. Loan 3156. Risk band A

This Hertfordshire business has been running since 2004 and has entered insolvent liquidation.

Dairy cow herd. Loan 7966. Risk band A+

This Staffordshire business was established in 2014, and the borrower has become unresponsive.

Car accessory specialist. Loan 9129. Risk band C

This West Midlands business was incorporated in 2011 and has ceased trading.

Legal service. Loan 6344. Risk band B

This Bedfordshire business has been running since 2014 and the owner is proposing an individual 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. Read how our collections and recoveries process works on our blog.
Enjoy lending, The Funding Circle Team

The new 10 minute application process at Funding Circle

We have launched a new 10 minute application process for introducers. This will allow you to submit loan applications twice as quickly as the previous application. In three easy steps, and on any device, you can prequalify your client for a loan. And in just 30 seconds, you will receive an indicative quote which you can discuss with your client.

Information required

As part of the new process, we only need to see total new debt over £25,000 and management accounts if filed accounts are older than 16 months.

To assess your client’s application we will need the following, which you can either upload after submitting the application when you are logged in, or email directly to the credit assessment team:

  • Latest full filed accounts
  • Last 3+ months of bank statements
  • If filed accounts are more than 16 months old we need a full year P&L and balance
  • sheet (management accounts, spreadsheets, accounting software reports are
  • acceptable)
  • Statement of personal assets and liabilities – if loan amount is £150,000 or larger

For more information about how to apply for a loan on behalf of your client, take a look at our new guide for introducers – available to download in your summary page. Log in now.

Flexi-fee option

Following feedback that you would like the option to decrease or increase the fee you charge clients based on the time you spend with them, you can also now change the total fee you charge your client. Please speak to your Business Development Manager to find out more about this flexi-fee option.

Next day payments

We have introduced next day payments, so you and your client will receive the loan and commission the day after completion.

New risk band

Finally, we’re excited to announce that we will soon be launching a sixth risk band, to help more of your clients access finance. These loans will be listed on the marketplace over the coming weeks. Here’s what you need to know:

  • the new risk band is called E
  • the minimum bid rate for E loans is 18.2% and the maximum is 20% (gross interest rates)
  • businesses that are rated as an E may generally show lower profit after tax than businesses in other risk bands, but they will not have poor payment performance. We may be able to reconsider clients as long as they were not declined for policy reasons, such as director credit history or trading history
  • C- is being renamed to D to make our risk grading easier to understand
  • this does not mean they have been reassessed and have higher expected bad debt rates, we’re just changing the name

We hope this has been a useful update on improvements to the Funding Circle application process. If you have any questions or feedback, please get in touch with your Business Development Manager or get in touch by emailing introducer@fundingcircle.com

The Funding Circle team

Picture story: Did you help furnish the set of Downton Abbey?

Maria Hopwood set up her online fabric business The Stripes Company in 2007, after spotting the striped fabric business opportunity while on holiday. “After years of French-influenced neutral designs, Britain was just ready for the bright stripes,” she said.

Fast forward to 2015 and the striped fabric movement has become so popular that last year, The Stripes Company supplied delightful deckchairs and sun shelters to the set of Downton Abbey. Fans of the show might remember the scene in the series 4 finale when Molesley takes a quick break!

Like the cast of Downton Abbey, Maria has set her sights on America and recently expanded her ecommerce site across the pond. To help continue IT development to service UK and overseas expansion, The Stripes Company has borrowed more than £175,000 across 3 Funding Circle loans since January 2011.

In April we met Maria to find out how the loan has helped her business. In this picture story below, Maria discusses her experience of Funding Circle:

Stripes 1 - Downton Abbey Set

Stripes 2 - Deckchair canvas

Stripes 3 - antique shop

Stripes 4 - striped fabric

Stripes 5 - Shakespeare's Globe

Stripes 6 - The White Company

Stripes 7 - cashflow

Stripes 8 - identify

Stripes 9 - investors

Stripes 10 - trading

 

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.

We’re introducing a new risk band and renaming C- to D | Weekly Lending Review

Week 25: 15 – 19 June 2015

We’re excited to announce that we are  introducing a sixth risk band, E, to help more small businesses access finance, whilst offering UK investors more borrowers to lend to. These loans will be listed on the marketplace over the coming weeks.

Within the next few weeks, C- will be renamed to D to make our risk grading easier to understand. The new risk band structure will be: A+, A, B, C, D, E,  where A+ is lowest risk. Please note all loans parts you hold which are C- will be renamed to D shortly.

More information about the new risk band and renaming risk band C- to D can be found on our blog or if you have any questions please contact us.

Record value of new lending opportunities

There are currently 70 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 £13,689,600, averaging at £67,159 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: 15-June represents the week of 15th – 19th June 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

Are you diversified?

We’ve created a short video about diversification, which simply means lending small amounts of money to lots of different businesses, to help you earn an attractive return in a sustainable way. Remember, by lending to businesses your capital is at risk.

Providing more information around defaulted loans

If you have any defaulted loans you will 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

Property management company. Loan 10116. Risk band C

This London business was established in 2010 and is entering a long-term payment plan.

Software products supplier. Loan 6194. Risk band B

This Essex business has been running since 2011 and has entered liquidation.

General engineering manufacturer. Loan 3790. Risk band B

This Stafford business was incorporated in 1970, and has entered liquidation.

Car suspension manufacturer. Loan 3258. Risk band C-

This Hampshire business was established in 2008 and is now two 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 how our collections and recoveries process works on our blog.

Enjoy lending, The Funding Circle Team

 

We’re introducing a new risk band and renaming C-

We’re excited to announce that we’re introducing a sixth risk band, to help more small businesses access finance, whilst offering investors more borrowers to lend to. These loans will be listed on the marketplace over the coming weeks. Here’s what you need to know:

1. Introducing E

The new risk band will be called E and will offer an attractive risk-return profile for investors. The gross interest rates you can bid at for loans in the E risk band will be between 18.2% and 20%, to reflect a higher expected annualised bad debt rate of 8%.

If you’re using Autobid you will need to update your settings to include E, as Autobid will not lend to E loans automatically. We’ll notify you by email when the new risk band has launched so you can do this.

risk band

2. Renaming C- to D in the coming weeks

To make our risk grading simpler, we are going to rename C- to D. Over the next few weeks, all loan parts you hold which were C-, will be renamed to D. This will be reflected in your summary page, and we’ll confirm once the change has been made.

Our risk bands will be:

A+, A, B, C, D, E  where A+ is lowest risk.

This does not mean that C- loans have been re-assessed or have higher expected bad debt rates than they did before. We’re simply changing the name to make the risk grading easier to understand.

3.  The evolution of risk bands at Funding Circle

In 2010 we started with 3 risk bands: A+, A and B. We launched C in September 2011, and D (formerly C-) came in July 2013.

Adding our sixth risk band, E, is a natural step. We have been tracking the performance of all businesses who have come to Funding Circle, including those whose applications were declined, for more than 2 years so we can estimate the risk of these businesses.

4. Estimated returns for all risk bands

For each risk band, the table below shows:

  • the minimum bid rates for each risk band;
  • the estimated annual bad debt rates;
  • the estimated returns (based on minimum rates) after fees and bad debt, but before tax.

Actual returns may be higher or lower and your capital is at risk.

Risk table

5. Higher interest rates to reflect greater level of risk

The minimum bid rate of 18.2% for E loans has been set based on a range of factors including the risk and volatility associated with lending to these borrowers, macroeconomic factors and competition in the market. Estimated returns are therefore higher on E loans, and this is to reflect higher estimated bad debt rates and greater volatility.

It’s worth remembering that estimated bad debt rates are no guarantee of the actual bad debt you will experience for each risk band, so we would recommend spreading your lending across lots of borrowers in different risk bands to reduce the impact of any single bad debt. You can read more about how to do this in our blog about diversification.

6. Helping small, creditworthy businesses

We will still only allow creditworthy businesses to borrow through the marketplace, and every loan application will be assessed by our experienced credit assessment team.

Businesses who have loans in the E band may generally have lower profit after tax than other risk bands – not because they have poor payment performance.

A Delphi score (from Experian, a third party bureau measure of business risk) is one of the many factors which are considered when we assess a loan application. We expect E band loans to have an average of 62/100, which is higher than the UK average of 45 for small businesses.

delphi score

How can you lend to these businesses?

You will see the first E loans listed on the marketplace over the next couple of weeks, and you can place your bids as you would normally. The highest gross interest rate you can bid at will be increased to 20%.

Do you use Autobid?

If you’re an Autobid user you will need to update your settings as your Autobid will not automatically include E loans. When E loans launch, turn your Autobid off, tick the box beside E to include these loans, and turn it on again. Remember by lending to businesses your capital is at risk.

Join us on the forum where we’re discussing this news. If you have any questions at all, please contact us and our team will be happy to help.

Enjoy lending,

The Funding Circle team

Meet Neil McDonagh, a Funding Circle introducer from HCF Commercial Finance

Neil McDonagh is a Director at HCF Commercial Finance, and was first introduced to Funding Circle through the NACFB in 2010.

Neil met the directors at Spartan Motor Factors, a vehicle parts supplier in South Wales, back in early 2014 and could see straight away that it was an established business that traded quickly. At the time, the business was looking for cashflow to secure a third unit in Bridgend, within a small window of opportunity. In this short video, Neil discusses why he felt Funding Circle was a particularly good fit for Spartan Motor Factors.

Spartan Motor Factors borrowed £75,000 through Funding Circle in May 2014. The loan has ensured positive cashflow allowing them to open a new branch and build a mezzanine floor in their Cardiff branch, doubling their stock.

Neil said “Funding Circle has evolved over the years and provides a very slick service. They’re very approachable if there are any questions you have about the process. They’re very helpful and it’s a very seamless end to end process.”

If you would 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.

Did you lend to this Surrey technology company? | Weekly Lending Review

Week 24: 8 – 12 June 2015

In October 2013, Pure Technology took out a business loan to help with cashflow which was funded by more than 1,200 people. Founder Danny Long discusses his experience of Funding Circle on the blog, and has a special message for those who lent to his business.

New loans available to you

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

Lending small amounts of money to lots of different businesses can help you earn attractive returns in a sustainable way. We’ve created a short video which runs through the basics of diversification and how you can diversify at Funding Circle.

The total value of new loans listed on the Funding Circle marketplace was £11,604,520, averaging at £69,147 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: 8-June represents the week of 8th – 12th June 2015.

Weekly average gross yield (2 weeks rolling)

yield 2

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
loans parts

Providing more information around defaulted loans

If you have any defaulted loans you will 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

Battery consultants. Loan 3512. Risk band A+

This Hampshire business was incorporated in 2005 and the loan is 4 months in arrears.

Call centre recruitment services. Loan 7263. Risk banc C-

This Cheshire business has been running since 2008 and the guarantor has become unresponsive.

Motor trader. Loan 5617. Risk band B

This London business was established in 2005 and has ceased trading.

Domiciliary care services. Loan 6552. Risk band A

This Milton Keynes business has been running since 2003 and is proposing a company voluntary agreement.

E-commerce beauty company. Loan 3155. Risk band C

This Swansea business was incorporated in 2006 and is proposing a company voluntary agreement.

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

 

Picture story: how 1,200 people helped a technology company in Surrey

In October 2013, Pure Technology took out a business loan to help with cashflow which was funded by more than 1,200 people. Based in Surrey, Pure Technology helps other small businesses make sure their IT systems are robust, their communications secure and their processes efficient.

Earlier this year we met Pure Technology founder Danny Long to find out how the loan has helped his business. In the picture story below, Danny discusses his experience of Funding Circle:

01 COVER

02

03

04

05

06

07

10 END

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 can small business owners finance their marketing?

A report released by the Government revealed there are 5.2 million SMEs in the UK. Yet how many are committed to the future growth of their business?

For SME business owners committed to putting growth plans in place, funding these essential steps can often be a cause for concern.

However this needn’t be the case as there are a number of grants available to businesses, some of which also cover the essential marketing spend that goes hand-in-hand with achieving sustained business growth.

Grant support

A grant is a specified amount of money that is given to a business to help with a certain project or purpose. There are a number of grants available from the Government, The European Union, local councils and charities.

You aren’t required to pay the grant amount back, but the competition for grants is high, so you have to make sure your business plan is solid to improve your chances of being considered. (For more information about getting your business plan right, read Cognition’s blog, ‘The Marketing Elements Every Business Plan Should Have To Help Secure Financing.’)

Which grant?

There are a number of different grants available (click here to browse through the different options), all of which come with their own specific access criteria.

However, given a bit of research you’ll find that they are often dependent on the location of your business, the length of time you’ve been trading for, your business turnover and the amount of money you’d like to receive.

For a grant that helps cover your marketing activity there are a number of options available, such as Business Development Grants.

These types of grants can be used in a number of ways to help SME owners grow their business, whether they’re being used for marketing, training, or to purchase equipment. The purpose of these grants is to help relatively established businesses reach that next level, by offering them a one off payment that doesn’t need to be paid back.

Business Development Grants are available from local governments and depend on which county your firm is located. To find about more about them, click here.

You could also consider applying for a Business Growth Service grant, designed to help businesses that have the ambition, capability and capacity to improve and grow. There are a number of criteria you’ll have to pass to be eligible for this type of grant, including having fewer than 250 employees and a turnover less than £40 million. You can find more about this grant, here.

So as you can see, there are a number of options for business owners committed to growing their business, and these are just two of the different types of grants available – there are many more out there. So do your research, and make sure that the grant you apply for supports a marketing strategy that will drive forward your business growth.

By Chloe McHugh, Cognition Agency

You read more tips by downloading any of Cognition’s free eguides.

Cognition is a full-service marketing agency and a Funding Circle borrower. It’s known for its commercial approach, linking marketing activity to revenue and growth.

If you’re interested in taking out a Funding Circle business loan, you can apply online at anytime.

You’ve helped lend £10.5 million to businesses | Weekly Lending Review

Week 23: 1 – 5 June 2015

Last week Funding Circle investors lent more than £10.5 million to businesses across the UK. The majority of businesses looking for funding were in the property and construction sector and the most popular reason for needing funding was to expand.

New loans available to you

There are currently 65 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 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.

The total value of new loans listed on the Funding Circle marketplace was £11,107,040, averaging at £94,152 per loan. The largest loan value was £630,000 and the smallest loan value was £8,000.

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: 1-June represents the week of 1st – 5th June 2015.

Weekly average gross yield (2 weeks rolling)

Yield

Number of listed loans per week

Loans listed per week

Listed loan value per week

Loan value listed

Total amount lent

Amount lent

Loan parts available to buy from other investors

Loan parts

News you should know

Spartan Motor Factors is  the fastest growing vehicle parts supplier in South Wales, with branches in Newport, Cardiff and Bridgend. They are dedicated to providing high quality vehicle parts at competitive prices to local garages. We met director Jason Farrugia who told us why he started the company and how his Funding Circle business loan has helped his company. Hear Jason’s Funding Circle story on the blog.

Providing more information around defaulted loans

If you have any defaulted loans you will 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

Nail and beauty products supplier. Loan 5917. Risk band C

This Tyne and Wear company was incorporated in 1998 and is now 3 months in arrears.

Industrial pipework specialists. Loan 7743. Risk band A

This Carlisle business has been running since 2010 and has entered liquidation

Engineering inspection services. Loan 9588. Risk band C-

This South Yorkshire business was established in 2007 and has entered voluntary liquidation.

Domiciliary care services. Loan 4117. Risk band A

This Milton Keynes business has been running since 2003 and is proposing a company voluntary arrangement.

Safety consultants. Loan 3931. Risk band C-

This Manchester business was incorporated in 2001 and is proposing an individual 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. Read what happens during the recoveries process on our blog.

Enjoy lending, The Funding Circle Team

 

Channel 4 Dispatches

As you may have seen, Funding Circle was included as a part of Channel 4’s Dispatches this evening. The show was called “Where to Save Your Money” and examined how individual savers have been affected since the financial crisis.

Since we launched nearly 5 years ago, investors have lent to thousands of UK businesses and earned more than £32 million net interest – an average 6.6% after fees and bad debt, but before tax.

In brief, the programme covered a specific loan that was made in 2013 and defaulted after one payment.

Whilst it is always frustrating when loans default, Funding Circle is an investment, and all investors who have been lending for at least 1 year and to 100 businesses equally are currently earning a positive return. Of the 10,800 loans issued in the UK, only six loans have resulted in a loss to investors after one or zero repayments.

We have built Funding Circle on the principles of openness and transparency. Details about specific loans would not be publicly available if we did not publish data on every single loan that has been made on the marketplace. We think it’s very important investors can see who they are lending to and the performance of these loans over time. This brings extra scrutiny, which we welcome. It makes us stronger and committed to getting things right.

Transparency makes Funding Circle unique and we remain absolutely committed to this principle and it will not change.

We appreciate there may be further questions so please join us on the forum or get in touch with our customer service team directly.

The Funding Circle team

The fintech revolution. May industry news

Cool, man

Marketplace lending features in this special report about financial technology. With topics that include payments, peer-to-peer lending and money management, ‘cool, man’ discusses the finance gap left by banks and how a range of fintech ventures are stepping in to fill them with more efficient methods. Discussing the gap in the market for small business lending and the importance of the use of data in credit assessment, Samir Desai, our CEO and co-founder, says, “There is far less readily available information to help gauge a business’s creditworthiness than there is for a person’s.”

The fintech revolution

A second article in the Economist discusses how the fintech revolution is improving finance in three fundamental ways including a quick and transparent process, new and clever ways to assess risk, and the creation of a stable credit landscape with diversification. At Funding Circle, we strongly believe in diversification. By spreading your money to hundreds of business, it not only helps you earn attractive rates in a sustainable way, but helps more small UK businesses too. To learn more about the importance of diversification, check out our blog.

Key to solving housing crisis? Giving smaller housebuilders more financial support, investment bankers say

Small property developers continue to struggle to access the capital they need from traditional sources. As awareness of other options grows, these developers have begun to use marketplaces like Funding Circle for finance. More than £50 million has already been lent to small house builders by Funding Circle investors, helping them to build more than 400 homes across the UK. Our head of real estate, Luke Jooste, says, “We are facing a huge housing supply gap which we know will only partially be met by big housebuilders.”

Retail investors at risk as big business enters P2P lending

A year ago, we introduced whole loans so that a wider range of investors could lend to small businesses through Funding Circle. By offering both partial loans, where lots of investors lend to one business, and whole loans, where one larger investors lends to a business, we are able to ensure that retail and institutional investors are given the same opportunity at Funding Circle. As part of a refresh of the Peer-to-Peer Finance Association’s operating principles, members agreed that this equality of opportunity must always be the case on member platforms. All members have made sure this is the case to date anyway so there’s no change for investors at a practical level. AltFi also covered the discussion.

Debt disruptors yet to face test from a downturn

New forms of finance have emerged and been hailed a disruptive force, offering investors attractive returns and borrowers lower rates, or finance they could not have otherwise accessed at all. But the majority of platforms have been set up since the financial crisis in 2008 and are yet to deal with an economic downturn. At the end of last year, an independent consultancy conducted a stress-test on the Funding Circle loanbook to see what the impact of a serious downturn might be. You can read about the results on our blog.

Metro Bank strikes deal to lend through P2P site

The relationship between banks and marketplaces continues to develop, with Zopa and Metro Bank announcing a new partnership last  month. As part of the deal, Metro Bank will lend to British people through the Zopa platform alongside existing investors. This unique collaboration brings together two disruptive challengers in the consumer lending space. These partnerships will continue to increase awareness of the many ways you can now access finance. Read more in Reuters and the Independent.

Is Peer-to-Peer Lending the Future of Loans?

Sam Hodges, our co-founder in the US, was interviewed on Bloomberg this month to discuss the solution to the small business lending issue also seen in the States. He talks about the impact marketplaces, like Funding Circle, are having on small businesses and the huge potential of the model  in the future.

How our collections process works | Weekly Lending Review

Week 22: 25 – 29 May 2015

Following our blog where we examined how our collections process works, we have put together a further post (part 2) which explains how and when we update you about loans which are late or defaulted.

Read more about loan comments and how the collections process works on the blog.

New loans available to you

There are currently 63 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.

The total value of new loans listed on the Funding Circle marketplace was £8,242,180, averaging at £67,664 per loan. The largest loan value was £650,000 and the smallest loan value was £9,380.

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: 25-May represents the week of 25th – 29th May 2015.

Weekly average gross yield (2 weeks rolling)

Yield

Number of listed loans per week

Loans listed real

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 will 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

Outdoor clothing manufacturer. Loan 2224. Risk band C

This West Yorkshire business has been running since 2007, and has reneged on their payment plan.

Online bathroom retailer. Loan 1929. Risk band C

This London business was established in 2001, and has entered administration.

Bespoke metal fabrication services. Loan 7213. Risk band A

This Tyne and Wear business has been running since 2006, and has entered administration.

Organic vegetable wholesalers. Loan 537. Risk band A

This County Armagh business was incorporated in 2001, and is now 3 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

 

How our collections process works (part 2)

Loan Comments

When a business falls behind with their repayments, we have a process in place to try to get them back on track which we outlined in our previous post. We will now explain how and when we update you on loans which are late, and those that have defaulted. We do this by writing loan comments which you can access in your account.

Firstly, we hope you have noticed an increase in frequency and detail in loan comments recently.

At the beginning of each fortnight, the Collections & Recoveries team takes a snapshot of all the loans and all the Defaults. We distribute these around the team so that we can check whether there has been any material activity which should be explained to you.

This means that that the longest a defaulted or late loan should be without a comment (unless we have specified a date for the next comment) will be 4 weeks. In practice, however, this will usually be around 2 weeks.

Downgraded Loans

We carry out a monthly review of all downgraded loans to see whether they should have their risk band reinstated. If we reinstate a risk band we will provide a comment to explain why we have done so.

Late Loans

If a borrower misses a payment at the beginning of one of those two week periods and we do not cure it within that period, then the loan will be given a comment the following fortnight.  We will endeavour to explain the reason that we think a loan has become late as we appreciate that it is helpful for investors who wish to buy and sell loan parts from others.

Negotiations

When a borrower enters liquidation or administration it often takes a couple of months for the guarantors to sort out their financial affairs and work out a plan for the future.  We try to work with guarantors throughout this period, but communication is often irregular and the initial forecasts can be disappointing.  That said, things often pick up, and because of our approach, guarantors either try to enter into payment plans that result in a full recovery or they seek relief through bankruptcy.

Payment plans

When a borrower or guarantor is in a payment plan and is making regular monthly payments, we will only comment when the payment comes in.  From time to time payments may slip by a few days, but we are monitoring them and will update you if we feel that there is a material risk of there being no payment or a reduced payment in that month.

Legal or insolvency proceedings

When a guarantor enters into a formal insolvency procedure (such as an individual voluntary arrangement or bankruptcy) we will try to find out what the estimated recovery is, but insolvency practitioners are often unwilling to give information outside of the prescribed reports.  These reports occur every 6 or 12 months, and there is no available information outside of that.  Likewise, court procedures can take a long time to work through, especially if the defendant is putting up a defence.  We will, where possible in these longer term cases, give you a specific date for when we will next post a comment, with a reason why that should be the next date.  Of course, if anything significant occurs before then we will let you know.

We hope this 2-part series by our collections team has been helpful in understanding more about how our collections and recoveries process works. If you have any feedback on how we could further improve loan comments, please let us know.

Read more about our RAG status for Loan Comments, or join us on the forum if you’d like to discuss this in more detail.

The Funding Circle team

 

Business owner Maria’s top three tips for budding entrepreneurs

We caught up with Maria Hopwood, owner of The Stripes Company, who shared her top tips for running a small business.

Stripes biz tips image

The Stripes Company offers a range of striped deckchair canvas along with interior fabrics, trimmings and accessories for beach, home and garden. They have borrowed over £175,000 across 3 Funding Circle business loans since January 2011 to help with cashflow.

Maria ran a successful antique shop in Chester when she spotted the striped fabric business opportunity while on holiday in India in 2007. Fast forward to 2015, and Maria has expanded The Stripes Company ecommerce site to America and recently announced a partnership with The White Company. Her striped fabric has been featured in Downton Abbey, Channel Four’s ‘Sunday Brunch’ and used by Shakespeare’s Globe Theatre and the English National Ballet. Business is booming.

In this short video you’ll meet Maria and find out why she believes advice is key to a successful business and why she’s not ruling anything out.

These are her three top tips:

  • Take all the advice you can
  • Find sound financial advice
  • Don’t be afraid to take risks

If, like Maria, you’re looking for business loan, You can check your eligibility online in just 30 seconds.

Apply online and a member of our team will get back to you within 2 working days.

We’ve helped more than 8,000 businesses in the UK and US access finance for a range of finance needs.