Marketplace lending in the UK breaks new record | Weekly Lending Review

Week 32: 3 – 7 August 2015

A record-breaking £500 million was lent to consumers and businesses through marketplaces like Funding Circle, from April to June 2015 for the first time in history. Here’s our round-up of last month’s industry news.

News you should know

We’re making some improvements to the marketplace; specifically how Autobid funds new loans. Until now, Autobid could fund up to half of each available loan at the minimum bid rate. As more money is being lent through Autobid than ever before, we’re increasing this so 65% of new loans can be funded by Autobid at the minimum rate. Should this change again in the future, we’ll let you know in the Weekly Lending Review. This update should not affect your lending experience, but if you have any questions about this please get in touch or visit our forum.

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 loans listed on the Funding Circle marketplace was £13,119,840, averaging at £73,331 per loan. The largest loan value was £400,000 and the smallest loan value was £5,000.

Business loans still available for bidding on:

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The dates on the graph should be read as ‘week beginning’, for example: 3-Aug represents the week of 3rd – 7th August 2015.

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. You can view the latest gross interest rates accepted on the marketplace on our statistics page.

Weekly average gross yield (2 weeks rolling)

WLR 32 yield

Number of loans, value of loans and amount lent are reported weekly.

Number of listed loans per week

WLR 32 loans listed

Listed loan value per week

WLR 32 value

Total amount lent

WLR 32 amount lent

Loan parts available to buy from other investors

WLR 32 loan parts

Loans defaulted last week

Retail business. Loan 8268. Risk band C

This Manchester business was established in 2011 and has entered liquidation.

Courier company. Loan 5423. Risk band D

This Cheshire business was incorporated in 2007 and has been placed in administration.

Indian restaurant. Loan 1751. Risk band B

This Birmingham business has been running since 1998 and is 2 months in arrears.

Ecological consultants. Loan 3751. Risk band D

This Wiltshire business was established in 2010 and has entered liquidation.

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

Rob McCorquodale

 

5 thoughts on “Marketplace lending in the UK breaks new record | Weekly Lending Review

  1. Perhaps more meaningful rates are seen from taking the average rate per risk band from the Statistics page (last 20 loans) and converting them to expected net rate after fees and bad debts. Figures are gross (net)
    A+ 8.2 (6.6)
    A 9.3 (6.8)
    B 10.7 (7.4)
    C 12.0 (7.7)
    D 13.3 (7.3)
    E 18.2 (9.2)
    Can see that for all risk bands except E, net rates are 7.0% +/- 0.4%. For E it’s 9.2%, clear outlier worth grabbing at every opportunity (no doubt why no risk E has achieved any rate other than 18.2%)

    • oops, mistake – should read: Can see that for all risk bands except E, net rates are approx 7.1% +/- 0.6%

    • But your spread is far higher for riskier loans and so you the expected rate should reflect this. On top of this if you are paying tax these loans are even less valuable (tax hits loans with higher risk more significantly)

      • If the bad debt rates were as FC predict (e.g. 0.6% for A+, 5% for D), then I’d agree the lower risk ones look better. Using actual bad debt rates from the Statistics page (0.2% for A+, 2.7% for D), I think it favours the higher rates, BUT that depends on when the bad debts occur (and your tax rate)

        • D and E risk rates are relatively new on Funding Circle, could it be that those predicted bad debt rates are over long lifetimes of loans, and no such long lifetimes have yet happened?

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