VIDEO. Meet the Yorkshire businesses who grew with finance

Spanning from the Pennines to the North Sea and from Sheffield to Whitby, Yorkshire is by far the largest county in the UK. It encompasses empty moorland and crowded cities, high fells and low plains.

On August 1st each year Yorkshire celebrates its own day. Starting out as a military holiday in 1975, it has been held and enjoyed ever since. Steadily evolving over time, it’s now a day to remember and celebrate the local traditions, culture and people of God’s own country.

To join the celebrations we visited three Yorkshire businesses. Teasdale Motors, The Yorkshire Gelato Company and The Great Yorkshire Gift Shop have all been able to progress thanks to loans from Funding Circle. They’ve been able to buy more stock, employ more staff and increase turnover by up to £1 million per year.

In this short video, meet business owners Andy, Dave and Aeneas. They talk more about being a Yorkshire business owner how Funding Circle has helped them to grow.

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The new ISA season for investors and your spring industry news

The new ISA season from peer-to-peer lenders – The Telegraph

Discussing the emergence of the Innovative Finance ISA (IFISA), the Telegraph describes how the industry has been able to offer far higher interest rates than the banks. Launched in 2016, there is now a wide variety of IFISA providers lending to different types of borrowers. “After the financial crisis this new type of lending took off as savers lost faith in banks amid plummeting returns on savings accounts.” With the range of products now available, IFISA numbers are expected to swell rapidly this year.  

50 ways to boost your savings income: peer-to-peer lending – Moneywise

Looking in more detail at how to use lending platforms, Moneywise discuss the benefits of diversification. “P2P platforms operate differently, so check whether you are lending to one individual or business, or your money is being distributed between a number of borrowers.” At Funding Circle, our lending tool will spread your funds across a variety of businesses to help you build a diversified portfolio.

Report shows the dramatic impact Funding Circle has on the economy – The Times

As well as earning for your future, your lending is helping the country to thrive. A recent report by Oxford Economics showed that, thanks to your lending, businesses created and sustained 45,000 UK jobs in 2017 and contributed £2.4 billion to the economy. John Glen, Economic Secretary to the Treasury, said it showed that the rise of “peer-to-peer lending has brought about real benefits, not only for the businesses of Britain but, as this report shows, our economy, too”. Having founded Funding Circle in 2010 to help small businesses, CEO Samir Desai tells Bloomberg how rewarding it is to see the impact it’s having on the UK economy.

A dozen start-ups trying to revolutionise SME banking – Forbes

Another exciting development was the announcement that Funding Circle is on the shortlist for Nesta’s Open Up Challenge. Backed by the Competition and Markets Authority (CMA), the 12 finalists are looking to create innovative new products to improve financial services for small and medium sized businesses. City A.M. describes how each finalist will receive a grant of £100,000 to work on their ventures, plus early access to open banking data.

The UK is officially the tech unicorn capital of Europe – Evening Standard

As well as leading the way on financial innovations, the UK has been crowned the tech unicorn capital of Europe. A unicorn is any private company with a valuation of £1 billion or more. The news is not only good for growing companies looking to hire the best talent, but also for consumers who have been able to benefit from these exciting new products. From the takeaway app Deliveroo to challenger bank Revolut, consumers are enjoying a wealth of new possibilities thanks to innovative UK companies.

Is it wrong for banks to launch flanker brands? – Alt Fi

The growth of such innovative tech businesses changing the shape of financial services. In response, several banks such as Natwest, ING and Santander have launched or announced their own digital offshoots. Known as ‘flanker brands’ they have received criticism from some for trying to hide their parent company under a new brand. Samir Desai, however, disagrees, and believes it could actually be a good thing for fintech – “I don’t think [they are] morally dubious. I think banks have in the past had lots of different brands” he said. “In many ways, it’s a good thing. It expands the market and it brings more borrowers online and we’re very comfortable competing for borrowers online.”

Fintech is giving small businesses access to finance – Raconteur

While the banks look to respond, businesses are already reaping the benefits of the new opportunities tech has brought. Pirates Grog Rum describe how they have grown 100% year on year after switching from bank loans to Funding Circle. In contrast to the hassle and paperwork of applying through banks, business owner Beth Jones much preferred our quick, straightforward process “Funding Circle was so much easier and gave us what we needed, all online. In fact, we arranged the latest loan while on holiday in India. It’s a great relief to know it’s there to ease cash flow when we need to restock at busy times.”

Bobbin bicycles show how to keep the export wheels turning – The Times

Looking at more success stories, The Times interviewed Bobbin Bicycles, who have shown the path to success for British exporters in a post-Brexit world. They got support from the Department of Trade, who gave valuable advice and helped fund trips to overseas trade fairs. Combined with extra finance and a lively Instagram account, their business has gone from strength to strength. It’s amazing how people find us from around the world,” said Cofounder Sian. “A lot of it comes through social media. Someone sees a picture online and the next thing you know we are selling bikes in Uruguay.”

Funding Circle hires first female non-executive director – Sky News

Finally, as well as having an external impact, we’ve also made some exciting internal changes. In May we announced our new board member Cath Keers. A former O2 executive, Cath is an experienced executive in the technology, retail and logistics industries. “Funding Circle is changing how the world’s small businesses access finance, and the impact it’s had on the economy and job creation over the past eight years is inspiring. I share the team’s commitment to delivering the best results for customers. The company’s high levels of repeat business demonstrate that both investors and borrowers also recognise this passion.”

Remember, by lending to businesses your investment can go down as well as up and your capital is at risk.

What is compound interest and how can it boost your earnings?

Whether you’re investing for your retirement, a new home or your children’s future, compound interest can help you reach your financial goals faster. It’s effect means that even small changes in what you put away each month can make a huge difference to your earnings over time. To help you understand how, we take a look at how it works and what it could mean for you.

What is compound interest?

Compound interest can help boost your earnings over time. Here is a basic example of how it works.

Say you have an investment of £10,000 and earn interest at 5% per year, your balance would go up as follows:

Year 1

Interest added = 5% of £10,000 = £500

Total balance = £10,500

Year 2

Interest added = 5% of £10,500 = £525

Total balance = £11,025

Year 3

Interest added = 5% of £11,025 = £551.25

Total balance = £11,576.25

You can see the amount of interest that gets added each year goes up, as you are effectively earning interest on your interest. This is what is meant by compound interest.

Regular contributions can help accelerate your earnings

Naturally, putting money aside each month means you’ll have more in your account. However, regular payments will also help you earn more interest. The more money there is in your account, the more interest it will gather, and the more compound interest you’ll earn on top of that.  

If you started with £10,000, here’s an example of what you could earn on the Balanced lending option with regular monthly payments:

Compound interest table

As you can see, the amount of interest you could earn goes up rapidly with bigger monthly payments. A simple way to make regular payments into your account is to set up a standing order. Find out how here.

Think long term for bigger returns

When you start to look long term, compound interest can help your earnings grow exponentially. The difference can be really quite remarkable. Here’s an example of what you could earn on the Balanced lending option if you started with £10,000 and added £100 each month: 

20-30 years may seem like a long time, but if you’re planning for your retirement or a nest egg for your children, it may be a realistic timeline. The sooner you start, the sooner you’ll start benefiting from your compound interest. The increases in what you could earn get bigger and bigger over time. This is all thanks to compound interest. By earning interest on your interest over many years, your earning potential rises dramatically. After 16 years you could have doubled your money. After 30 years, you could have more than tripled it.

Keep lending switched on

When you receive repayments from businesses, our lending tool will automatically lend them out again to other businesses. By keeping lending active, you’ll be able to gain even more from compound interest. All you have to do is keep lending switched on for your account. If you have lending paused, you can start lending again from the Lending settings page of your account.

To add funds to your account login here, or learn how to set up a standing order. By lending to businesses your capital is at risk and funds are not covered by the Financial Services Compensation Scheme

Enjoy lending!

These figures are estimates based on lending an initial £10,000 through the Balanced lending option, earning a return of 6% per year. They were calculated using a compound interest calculator. The projected return for the Balanced lending option is 6-7% per year after fees and bad debt, but before tax. Your actual return may be higher or lower. Please note, forecasts are not a reliable indicator of future performance and your capital is at risk.

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.