January’s Lending Impact and Borrower Stories


This month’s lending impact is all about kick-starting a healthy new year. First, we meet Arapina, an award winning bakery offering guilt-free sweet treats made from all natural ingredients. Next up, get in shape with five Funding Circle businesses who were able to grow thanks to your lending.


This month we’re proud to announce we took home 3 awards at the AltFi Awards 2017. This included the coveted Editor’s Choice Award, as well as P2P Business Platform of the Year and Best Clarity of Data. With your continued support, we strive to grow our success even further in 2018.


Meet Michaela, the driving force behind the award winning healthy lifestyle bakery, Arapina. Originally from Crete, Michaela grew up eating locally sourced, natural and healthy home cooked food. After moving to London, Michaela found it increasingly difficult to find sweet treats that satisfied both her vegan diet and her taste buds. As a result, Michaela, or “Lady M” as she’s known, set up Arapina to offer delicious guilt-free treats made from the best natural ingredients.

Since 2013, their mission has been to carve a path away from the sugary, artificial produce found in many bakeries and instead offer people a healthy, yet delicious, alternative. Originally, Arapina traded with only one type of cake – the famous chocolate Arapina. As the years progressed and crowds grew fond of Arapina’s delectable delights, they decided to expand their menu. Today, their decadent cakes and desserts cater for all dietary requirements, including dairy free, gluten free and vegan recipes.

Thanks to your continued support, Michaela and the team were able to purchase new equipment after relocating into their own production and retail unit.

Stay tuned as we’ll be bringing you a behind the scenes case study video very soon.

Yoga, Pilates or Bodybarre? How will you stay in shape in 2018?

It’s that time of year when the decision to become fitter is top of everyone’s to do list. Many of the world’s most well-known and successful entrepreneurs consider yoga, pilates and other forms of exercise as an essential ingredient for their continued success. Head to our blog to discover five businesses to help you get in shape this year. All of these businesses were able to achieve their goals thanks to your lending.

December’s Lending Impact and Borrower Stories

In case you missed it, here’s last month’s post, where we met the founder of the Creative Whisky Company in our latest case study video and took a tour through small business past, present and future.

Up next

At the beginning of February we’ll publish our Insights and Analysis blog to review January’s activity. This includes statistics from across the platform and helpful tips to make the most of your investment.

As always, if you have any questions or comments our dedicated team are here to help. And if you have any suggestions we’d love to hear them.

Enjoy lending, the Funding Circle team

Yoga, Pilates or Bodybarre? How will you stay in shape in 2018?

The decision to become fitter is usually top of people’s new year’s resolutions and for good reason. Many of the world’s most well-known and successful entrepreneurs consider yoga, pilates and other forms of physical fitness as an essential ingredient for their continued success. These 5 local businesses are helping the UK get in shape, so where will you start?

Record your every move at Be X Fitness

Established in 2013, this Barnsley-based fitness center offers team workouts using high tech equipment so you can get the most out of your workout. Thanks to My Zone, the connected tracking technology, users can record their every move, analyse performance and receive personalised training advice from coaches.


To support growth, Kevin Yates applied for a business loan through Funding Circle in November 2017. They accessed £106,000 in less than one week, meaning they could take on the next opportunity quickly.

Physio by Pea Green to keep you energised

Stephanie Smith launched Oxfordshire-based Pea Green Physio back in 2008. Eight years on she decided she wanted to expand into yoga and pilates and needed a business loan to open a studio. Pea Green now offers yoga and pilates classes alongside sports massages and rehabilitation therapy after raising £25,000 through Funding Circle.


Rediscover fitness with Paola’s Bodybarre

Forget what you know about traditional fitness classes and embrace Paola Di Lanzo’s multidisciplinary workout methods. From light sessions focusing on technique, alignment and flexibility, to high intensity training and weight-lifting, the wide range of classes will help you find the exercise you’re looking for. After opening her first studio in Fulham in 2014, Paola’s BodyBarre is now available in 7 other pop-ups, affiliated studios and private members clubs around London. Paula expanded the business with a £53,000 loan to open a new flagship studio in Sloane Square.

Paola's Bodybarre Studio

Yoga gets you in the right headspace

The meditation classes at London-based Yogacentric are said to improve your mental focus by connecting your mind and body. If meditation isn’t for you and you’re looking for something more active, try their hot yoga or one to one sessions. All levels are welcome.


Daniel Percival came to Funding Circle in 2016 as he wanted to grow his London studio. He secured £53,200 over 5 years to finance working capital and the fit-out of a second location.

Keep moving at Alderley Pilates

Jan and Peter Bowen founded their pilates business in Cheshire 15 years ago. The studio brings talented teachers and enthusiasts of all levels together in a friendly and relaxed environment. All of their trainers are certified by Body Control Pilates, the largest European professional pilates’ organisation.


Alderley Pilates first came to Funding Circle for a business loan in 2014. Finance from Funding Circle has helped them refurbish their premises and upgrade their website to grow the business.

Are you interested in lending to businesses like these?

Lend alongside 76,000 investors and support small businesses across the UK by signing up online today. You can use our investor information guide to help you get started. There are 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.

Looking to expand your business?

More than 32,000 businesses in the UK have accessed finance through Funding Circle. You could boost your cash flow, refurbish premises, hire staff and much more. Check if you qualify for a business loan online in just 30 seconds.

A helping hand to small businesses. December industry news.

Peer-to-peer lender shows how it’s done – Evening Standard

Happy new year! To date, you and other investors have helped a network of 40,000 businesses access $5 billion of finance globally, which has created an estimated 100,000 new jobs. This growth also saw Funding Circle become the first lending platform in the world to have facilitated more than $1 billion across two markets. None of this would have been possible without your continued support over the years, so thank you!

Brighton named ‘most enterprising’ UK city – Brighton and Hove Independent

To better understand the mentality of small business owners, we recently launched a survey which found that more people living in Brighton (64%) believe they have the right skills to set up a business than anywhere else in the UK. Christine Johnston, Brighton-based founder of The KiTE, SURF & SUP Co and Funding Circle borrower, said: “These results reveal what those of us who have set up businesses in Brighton have known for years. It’s not just the infrastructure that makes Brighton such an appealing place to start a business, it’s the type of people that gravitate towards the city and the culture that’s been created as a result.”

A helping hand for small businesses – MoneyWeek

Even a decade after the credit crunch, too many British small businesses still feel their potential is being hindered by a lack of access to suitable finance. Raising awareness of other avenues of finance available, such as borrowing directly from investors through lending platforms, is crucial for their development. When small businesses flourish, thrive and go even further, so does our economy. Read more about how the online lending sector is lending a helping hand to small businesses in the Independent.

The UK’s ‘alternative finance’ industry is now worth £4.6 billion – Business Insider

In 2017 alone, the UK’s alternative finance industry generated £3.3 billion of funding and grew by 43% from the previous year, according to a report from the Cambridge Centre for Alternative Finance. Of that funding, a whopping three-quarters went to start-ups and small businesses across the country, which is a 50% increase from 2015. It’s hugely encouraging to see that as the adoption of the sector continues to grow, more and more business owners and investors benefiting as a result.  

A brave new world: will open banking boost the UK FinTech sector? – Forbes

As some of you may know, Open Banking was designed to enable bank customers to authorise third parties, such as challenger FinTech players, to access their account details in order to create more competition and choice in financial services. Not only will this allow individuals to choose where they bank more easily, but it will also incentivise developers to create innovative apps from the new data streams, such as dashboards that list all your financial products in one handy place. Whilst the full potential of Open Banking is still unknown, it’s clear that it has the power to completely transform the way we bank.

Players who swapped the bit parts for starring roles – The Times

And lastly, to finish up the final industry news roundup of 2017, we were pleased to see our CEO and co-founder Samir Desai be named as one of The Times’ Ones to Watch for 2018. At Funding Circle, we’ve never been more excited to see what the future will bring, and we hope that you will continue on this journey with us. Together we’re creating jobs, supporting local communities and driving the economy forward. Here’s to a fantastic 2018!


Make the most of your lending experience

Here are some of our key tips to help you get the most from your lending experience as a Funding Circle investor.

Set yourself up to earn a more stable return

Data at Funding Circle shows that investors who diversify by lending small amounts to many businesses are more likely to earn a stable return. To help illustrate this, the below chart shows the minimum annualised return earned by 95% of investors lending for at least a year, by the number of businesses they have lent to.

The chart shows that 95% of investors who have lent to at least 100 businesses equally for a year or more have earned at least 4% per year after fees and bad debt. In fact, since 2010 every single investor who has followed this level of diversification has earned a positive return. (Data correct as of 1st October 2017).

Becoming diversified has never been easier, as our lending tool automatically lends no more than 0.5% of your portfolio (subject to a minimum of £20) to each business. We suggest building a portfolio of at least £2,000 to help you lend to at least 100 businesses.

Check your Lending Settings are right for you

When lending through Funding Circle you can choose from one of our two lending options, Balanced or Conservative. Both options will allow you to quickly and easily build a portfolio of creditworthy businesses depending on your personal preference:

  • Balanced – lend to the full range of creditworthy businesses, aiming to achieve an attractive, stable return.
  • Conservative – focus on businesses that have been assessed as lower risk, but with a lower projected return.

It’s important that the lending option you have chosen is right for you. You can review and change your chosen option in the Lending Settings page when logged in to your account. This is also where we will display the current projected return for each option.

Boost your earning power with the Funding Circle ISA

We’re currently in the process of rolling-out the Funding Circle ISA to all current investors. The ISA works just like your Classic Funding Circle account, but the interest you earn is tax-free. This could provide you with a significant boost to your earning power. For example, if a higher rate taxpayer lends £20,000 through the Funding Circle ISA and earns a one-year return of 7.2%* after fees and bad debt, their post-tax earnings after one year could increase from £864 to £1,440.

We’ll send you an email when your account is ready to open, so please regularly check your inbox. You can also login to your account to see if your ISA is available. Tax rules and relief can change depending on your personal circumstances, and you can find out more about the features and risks of lending through a Funding Circle ISA here.

Recognise bad debt as a normal part of lending

When lending to businesses there will always be some who are unable to repay their loan. We call this bad debt, and we account for it when calculating projected returns. Bad debt is rarely spread out evenly over the course of the loan term, and tends to happen during certain periods of a loan’s lifetime. You can see this from the chart below, which shows the annualised return, after fees and bad debt, earned by an example investor over a five year investment period:

In our example, based on five years of loan performance data, an investor lent £10,000 across all the loans originated through Funding Circle in 2012. Each month, the loan repayments and interest received were lent to new borrowers.

You can see that in this example most bad debt occurred during the period marked as phase 2, but then reduced as loans continued to mature and recoveries arrived. You can read more about how returns can change over time in our blog, but the important thing to remember is that a decrease in your return due to bad debt is an expected part of the lending experience, and will typically stabilise as your loans mature. Remember past performance is not a guarantee of future returns.

Think long-term

A modest regular contribution and a patient approach can have extraordinary results. For example, if you start with £10,000 in your Funding Circle account and set up a standing order for £100 a month, after 30 years you could have an account worth over £200,000**. Find out more about setting up a standing order, or see how your own portfolio could grow over time with this compound interest calculator.

It’s important to remember that as you lend to your own individual portfolio of loans your return may be higher or lower, and by lending to businesses your capital is at risk. Tax rules and relief can change depending on your personal circumstances.

We hope these tips help you get the most out of lending to businesses through Funding Circle. If you have any questions about your account, please get in touch.

Enjoy lending,

The Funding Circle team

*The projected return is an estimate of what investors could earn on the Balanced lending option (as of 10th January 2017), after fees and bad debts, but before tax. It uses the loans we expect to be funded on the platform, and the estimated bad debt rate of those loans based on our all-time loan data. See the full calculation here.

**Returns are based on the annual projected return of 7.2% for investors lending through the Balanced lending option (as of 10th January 2017). Returns are compounded monthly and are after fees and bad debt but before tax. Based on this, an account worth £10,000 with a standing order of £100 a month would be worth £213,837.61. Returns are calculated using a compound interest calculator.  

Your January Review – Insight and Analysis


In 2017, we helped over 10,000 UK businesses borrow over £1 billion. This year we want to do even better, helping businesses and investors achieve their goals, create new jobs and drive the economy forward. Here’s to a great 2018! Dive in below for your December review.


Last month, you and other investors helped over 1,400 UK businesses take new opportunities and reach their goals — thank you for your continued support!


December highlight: Small business infographic

Did you know there were more than 30,000 street sellers in London in the late 1800s? Was this the start of small businesses as we know them? In case you missed it, take a tour through small business past, present and future in our shiny new infographic.


These graphs show the most recent activity on our platform.

You’ve helped more than 9,300 small businesses access finance in the last 6 months…


Totalling over £630 million lent


December 2017 sector breakdown

Amount lent to each sector


December 2017 regional breakdown

Amount lent to each UK region



As part of lending to businesses, a small percentage will not be able to fully repay their loan. This is known as bad debt and is a normal part of business lending. We believe diversification, where you lend no more than 1% of your total to each business, is the best way to reduce the impact this has on your return. Our automatic lending tool will help you diversify by splitting your investment across lots of businesses. We suggest lending £2,000 or more, so you can lend to at least 100 businesses, with no more than 1% going to each one.  

Each week, we publish a list of the loans being defaulted on the Customer support section of our website under ‘Announcements.’ To see a breakdown of the loans defaulted last week simply click on loans defaulted 4th January 2018  For further information on why Funding Circle defaults loans you can read our FAQ here.



You can also read more about how our collections and recoveries process works (part one and part two) on our blog.

Up next in January we’ll be looking at the impact your lending is having on the UK economy and bringing to life some of the businesses you’ve helped access finance.

As always, if you have any questions or comments our dedicated team are here to help. And if you have any further suggestions we’d love to hear them.

Enjoy lending, the Funding Circle team

*Data from CEBR report

This blog is a general summary, and should not replace financial advice tailored to your specific circumstances. Funding Circle is not authorised to, and does not, provide investment, tax, legal or regulatory advice. If you have any questions, please speak to your professional advisor or seek independent specialist advice.