March’s Lending Impact and Borrower Stories

In this month’s lending impact, we bring you our latest case study video featuring an award-winning bakery. We’ve also got your Easter weekend covered, with five booming businesses who can help you have a great weekend. Dive in below.

We’re pleased that so many of you are already benefiting from tax-free returns with the Funding Circle ISA. Thanks to your support, we can continue to help businesses take opportunities, create new jobs and drive energy into the economy.

Trustpilot quote of the month

“When others turned their back, Funding Circle helped us turn our dreams into reality. Thanks to their trust in us we are now able to expand our business and move things forward. We can’t thank them enough. If you wish to fulfil your business ambitions then there’s only one place to go, FUNDING CIRCLE!”

In January we introduced Michaela, the founder of healthy lifestyle bakery, Arapina. Originally from Crete, Michaela grew up eating natural and healthy home cooked food. After moving to London, Michaela’s passion for food led her to trade in food markets in 2013. She began with one single product – the Arapina chocolate cake – but as demand kept growing so did their menu. In May 2017, Arapina accessed finance through Funding Circle to expand their business and have since doubled their turnover. Watch the case study video to learn more about their exciting journey.

Make the most of your Easter break with friends and family

The long Easter weekend is nearly here! Here are five Funding Circle borrowers who can help you make the most of the long break. From visiting a chocolate factory to feeding the farm animals, there’s something for everyone. All of these businesses were able to flourish thanks to your support.

February’s Lending Impact and Borrower Stories

In case you missed it, here’s last month’s post. In February’s lending impact we met Jake, the founder of Bristol Bicycles. Additionally, we announced that the University of Huddersfield has lent to over 2,000 UK business through our platform. Finally, we listed five Funding Circle borrowers to keep the Winter Olympics spirits high.

Up next

At the beginning of April we’ll publish our Insights and Analysis blog to review March’s activity, including 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

Healthy treats for everyone, thanks to your support

Michaela is the founder and owner of award-winning healthy lifestyle bakery, Arapina. The bakery focuses on reinventing Mediterranean cooking, specialising in free from and guilt-free treats.

After finishing university, Michaela went straight into work. It wasn’t long before she became bored and found herself dreaming about running her own business. Being an avid home baker herself, Michaela began trading in food markets in 2013 with one single product – the Arapina chocolate cake. Her delectable treat was an instant hit, and she started to receive requests from wholesalers. Demand kept growing and there quickly became a need to relocate into a larger premises. Shortly after, they moved into an industrial kitchen between Greenwich and Deptford.

The bakery was minimal and there was a need for funding to refurbish the premises. Michaela came across Funding Circle through an advert on social media and decided to take a loan in May 2017. “I found that I could communicate with them. They understand the mindset of an entrepreneur and that really helps” she said. Since receiving funds from Funding Circle investors, Arapina have doubled their turnover. “Without them we wouldn’t be in the position we are today”.

In this short video, meet Michaela and discover more about the exciting evolution of Arapina.

Are you interested in lending to businesses like Arapina?

Lend alongside 78,000 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 and 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.

Make the most of your Easter break with friends and family

The long Easter weekend has arrived! If you’re stumped for things to do, we’ve pulled together a list of Funding Circle borrowers to help you make the most of the break.

Visit a chocolate factory

5 years ago NOMNOM moved into an abandoned chocolate factory in South West Wales. They found an extraordinary collection of chocolate moulds, and have been steadily turning them into hand-painted sculptures of edible art. At the old factory they now offer a range of experiences to go with their treats, including workshops to design, fill and paint your own chocolate mould. For something a little more special, indulge in their 5 course Easter feast or stay the night in the farm house. NOMNOM has borrowed £176,000 across multiple loans since 2016 to continue their growth.

Embark on a countryside walking tour

Like Christmas, Easter wouldn’t be complete without an unnecessarily long family walk. But are you bored of your usual route? Check out Shepherd’s Walks for a superb collection of guided walks, including in Northumberland and Cumbria. If guided tours aren’t your thing, purchase a handheld navigator with GPS and determine your own route in an area of your choice. Since July 2015, Shepherd’s Walks have borrowed £108,000 across 3 loans to keep up with company growth.

Feed the farm animals

If you find yourself in Leicestershire for the Easter break, head to Little Jack’s Farm in Bottesford. The family run business includes a children’s farm and a garden centre – fun for all the family. At the farm, you can feed a range of animals including sheep, rabbits and ponies. If the weather doesn’t hold up, there’s also an indoor play and crafts area for children. Little Jack’s Farm has borrowed £81,000 across multiple loans to expand the children’s farm and improve their facilities.

Create your own Easter egg hunt

We appreciate that a weekend away isn’t feasible for everyone. Instead, build the excitement at home by creating your own Easter egg hunt in your garden or nearby park. D&D Chocolates specialise in chocolate and confectionery for people with allergies to dairy, gluten and nuts. They also supply to hospitals and clinics so that children don’t miss out on a chocolate Easter egg. D&D Chocolates needed to purchase a larger chocolate moulding machine and a walk in refrigeration room to keep up with interest in their dairy free chocolate. Since September 2014, they have borrowed £24,000 across two loans.

Get your garden ready for Spring

Perhaps indulging in copious amounts of chocolate over a 4 day weekend isn’t your thing. Now it’s officially Spring (and about time too!) make sure your garden looks the part. Gardening Express has a great online store, with the perfect selection of Spring Flowering Bulbs to brighten up your flower beds. To boost seasonal buying power and cash flow, Gardening Express borrowed £157,900 in April 2016.

Are you interested in lending to businesses like these?

Lend alongside 78,000 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. Not covered by the Financial Services Compensation Scheme.


Small businesses diversify funding. February industry news

Small businesses look to specialist lenders for loans – Financial Times

According to recent research by the British Business Bank, small businesses are diversifying their sources of funding away from the banks and seeking support from other avenues, such as online lending platforms. This shift shows that there is much more choice for available for small businesses today than there was only a few years ago, which is excellent to see. Business can now access fast, affordable finance online in a matter of days, without even leaving their homes. Read more about the report in the Telegraph.

Banks stress-test themselves but don’t say how they’ll support business – The National

Another recently published report, the Scottish Business Report, shows that little information is available on how banks are planning to support their small business customers post-Brexit. The report also looks at how bank net lending (which is total lending minus repayments) has significantly dropped following the referendum. In 2017, 30 of the UK’s largest banks lent £679 million to small businesses on a net basis, whilst investors at Funding Circle alone lent £600 million. This encouraging growth wouldn’t be possible without to your continued support, so thank you!

2017 was a record year for UK fintech investment – City AM

There was record venture capital investment in UK FinTech in 2017 with £1.3 billion invested in companies working in financial technology. This represents a rise of 150 per cent since 2016 which is a bigger increase than either the US or China. Globally, two of the biggest deals were for Transferwise and Oaknorth, both UK firms. Funding Circle, Interactive Investors and Monzo made up the rest of the top five biggest deals in the UK. This is encouraging as it shows the UK shaking is off concerns of a Brexit slowdown.

University of Huddersfield Lends to More Than 2,000 UK Small Businesses – Crowdfund Insider

In 2013, the University of Huddersfield became the first University to lend directly to businesses through a lending platform – and it continues to lead the way in this area today! Since then, the University has gone on to support over 2,000 UK small businesses through Funding Circle, including Ushiwear, a British clothing brand. Launched by husband-and-wife team Neil and Jilly Kapusi, the passionate duo were able to build on their success and go for growth after accessing finance through the platform. Read more on our blog.

The Sunday Times Best 100 Companies – The Times

To finish up, we were delighted to be named 16th in The Sunday Times Best 100 Companies. We’ll leave it to our UK MD and co-founder, James Meekings, to summarise: “Even though we now have 800 employees, we still feel like a small business. We still push for opportunity and for people to be creative.”

Your March Review – Insight and Analysis

Last month you and other Funding Circle investors lent over £113 million to UK businesses to help them grow and develop. Dive in below for your monthly analysis.

We’re also very proud to announce we are 16th in The Sunday Times 100 Best Companies to Work For 2018. You can see the full list here.

In February, you and other investors helped over 1,700 UK businesses take new opportunities and reach their goals — thank you for your continued support!

Meet our Collections and Recoveries Team

Our aim at Funding Circle is for you to earn stable returns when lending directly to businesses. Dive into our Q&A with Andrew Jackson, Head of Collections and Recoveries in Europe, to find out how the team has evolved over the years to ensure the best possible outcome for you and other investors.

These graphs show the most recent activity on our platform.

You’ve helped more than 10,200 small businesses access finance in the last 6 months…

Totalling over 678 million lent

February 2018 sector breakdown

Amount lent to each sector

February 2018 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 1st March 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 March we’ll be looking at the impact your lending is having on the UK economy. We’ll also bring 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 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.

Meet the Collections and Recoveries team, who help keep your returns healthy

At Funding Circle our aim is for you to earn stable returns by lending directly to businesses. With any type of lending, your capital is at risk and it’s normal for some businesses to be unable to repay their loans. We call this bad debt, and we expect a certain percentage of it to occur each year.

When a business falls behind with their repayments, our Collections and Recoveries team will work closely with them to achieve the best possible outcome for investors. We spoke with Andrew Jackson, who heads up the team, to find out more about how Collections and Recoveries have evolved over the past few years.

Andrew joined Funding Circle in 2013

Hi Andrew, thanks for speaking with us today. A lot has changed since we brought Collections and Recoveries in-house in early 2014.  What does the team look like now?

In the beginning it was just a part-time colleague and myself handling everything. Now we have more than 20 people in five specialist teams:

  • The Loan Servicing team deals with borrowers who are on time with their repayments, but may have queries or requests such as asking for statements of account or settlement figures.  
  • The Business Advisory team carries out portfolio monitoring on the whole of the loan book. They look for warning signs and work with borrowers to find ways to keep payments on time.
  • The Collections team deals with missed payments. They know as soon as a direct debit is cancelled, or 3 days before the due date if a direct debit bounces.
  • The Recoveries team deals with any loans where the borrower or guarantor has entered a formal insolvency process, or that are defaulted.  
  • Last but by no means least, the in-house Recoveries Litigation team carries out our legal work, with the help of an external panel when required. Bringing litigation into my team in 2016 enabled us to work faster and cheaper in commencing bankruptcy proceedings, obtaining security and commencing legal action.

We also work closely with external tracing agents, private investigators, surveyors, insolvency practitioners, turnaround experts and lawyers.

How has the approach of the team changed since 2014?

In the early days we were testing out new approaches and ideas, which set us apart from the usual strategies taken by banks. We found our approach seemed to work much better than industry expectations, and resulted in lots of positive feedback as well as recovering more money for investors.  

You mentioned your strategies are working? What results have they had?

We’ve seen exceptional performance over the past few years. Moody’s (the ratings agency) have published reports suggesting that we should get 30% lifetime recovery on our asset class*. However, we have seen significantly higher results, and we predict that will continue. Over the last few years, investors have consistently earned returns on average between 6-7% per year after fees and bad debt.

The difference with Funding Circle is that we don’t give up on borrowers simply because they are going through a rough patch. Entrepreneurs are a tenacious bunch. They learn from their mistakes, get back on their feet, and start new businesses – and it is from those new ventures where we see a significant portion of our recoveries. I think businesses understand this.

When we explain our policies to them they often agree that they are fair – even those who we believe are not being as cooperative as they could be. When we explain to them why we have reached that conclusion they tend to see things from our perspective, and then work alongside us in a much more open and honest way.

Thanks Andrew, we appreciate you taking the time to speak with us!

You can learn more about how the Collections and Recoveries process works at Funding Circle with the blog posts below:

Bad debt, defaults and why not to be afraid of them

How our collections process works (part 1)

How our collections process works (part 2)

How long does it take to receive recoveries?

Alternatively, if you have any questions please feel free to get in touch.

Enjoy lending,

The Funding Circle team

*Frank J. Faboozi, Handbook of Finance, Volume 1: Financial Markets and Instruments: v. 1, (J. Wiley & Sons, 2008)