Happy 7th birthday Funding Circle!

In August 2010, Funding Circle was launched by three university friends, Samir Desai, James Meekings and Andrew Mullinger above a waffle shop. Their small team of five huddled around a telephone battling for their first customers and originated £2 million of lending in their first year.

Seven years on, you and other investors have supported the growth of 32,000 small businesses across the UK, US, Germany and the Netherlands. We’re blown away by how far we’ve come together so far and that’s all thanks to your lending.

Investors earning for their future

69,000 people and organisations are lending to small businesses, including local councils, the government-owned British Business Bank, the European Investment Bank and our most recent investor, Aegon. This new strategic lending partnership will support the growth of approximately 2,600 UK businesses, creating an estimated 6,400 new jobs in the first year. A diversified investor base ensures our platform is stable and sustainable, even in times of economic stress.

Businesses driving the economy forward

32,000 businesses have accessed finance, including David’s IT business, a doggy daycare in Suffolk, and our first ever borrower, Sustainable Direction. We recently met Dr John Henry Looney, founder of Sustainable Direction, to see how his business has grown since 2010.

Small businesses like these are the driving force behind much needed job creation, which in turn fuels productivity and the economy. Lending through Funding Circle has supported the creation of approximately 80,000 new jobs across the world.

And finally, we’re proud to have launched a new look, which celebrates the people who have turned their passions into livelihoods, supporting their families and local communities.

Thank you for choosing to be on this journey with us – Funding Circle wouldn’t be where it is today without all of your support.

Meet the 12 brewers bringing back beer

We celebrate the people who’ve turned their passions into livelihoods, supporting their families and local communities. Ordinary people doing extraordinary things, pushing the economy forward.

People like Jon Swain and Peter Hills

Old friends, Jon and Peter (pictured) came together, with years of experience working in pubs and a passion for home brewing, back in 2011 to set up Hackney Brewery in London. Read their story in this short picture story.

Meet the brewers bringing back beer

Over the past few years, the humble pint has exploded onto the world scene with craft breweries and beer festivals popping up across the globe. Inspired by the Great British Beer Festival last week, we’re giving three cheers to those producing delicious beers. Read our guide to British breweries who are flourishing thanks to your lending.

Up north

Upnorthbrewery

1) Roosters Brewery in North Yorkshire brews modern classic Yankee which scooped a silver at the 2017 International Beer Awards and Baby-Faced Assassin which achieved a gold medal at the same event. To continue investing in brewing capacity, Roosters have borrowed over £150,000 since 2015.

2) Over 500 investors helped the Worsthorne Brewing Company in Lancashire expand and keep up with growing demand for their cask ales. Established in 2011, the brewery has quickly gained a reputation for quality. Try their award-winning Old Trout or Blackthorne Stout.

Down south

Down south brewery
3) Over 800 investors helped Gloucester Brewery create an onsite bar and renovate their building. This year, the brewers are concentrating on using new world hops from New Zealand, Australia and US.

4) In the heart of the Devon countryside, Hunter’s Brewery uses only the best locally-sourced ingredients. Last year, you and other investors helped them increase brewing capacity by installing a new fermentation room.

5) Based in an old brick and flint grain store in Oxfordshire, Loddon Brewery borrowed back in 2015 to hire a new specialist member of staff. Choose from their range of beers in the brewery shop, including ‘rich, nutty and malty’ Hullabaloo and ‘highly hopped session ale’ Hoppit.

6) Named after the famous naval hero, Nelson Brewery situated in The Historic Dockyard Chatham uses the finest Kent hops to produce a wide variety of ales including their Admiral of the Fleet. The brewery borrowed in 2016 to buy new equipment and increase production.

In London

London has been at the epicentre of the recent British beer revolution, with a whole host of taprooms and breweries offering tours sprouting up across the capital.
In London Brewery
7) If you’re central, take a short walk from London Bridge and hidden under the railway arches you’ll find Brew By Numbers.The brewery, which borrowed earlier this year to finance expansion, hosts a range of events including beer and cheese evenings in their Tasting Room.

8) At By The Horns in south-west London you can find beer ‘that makes an impression’. Enjoy a pale ale in their taproom or rent out the beer hall for a special occasion. Over 1,500 Funding Circle investors helped the brewery purchase larger fermentation vessels to increase production.

9) When you’re out east, bumble across to Crate Brewery in Hackney Wick who’ve borrowed over £250,000 since 2015 to expand. While you’re there take a tour of the Brewshed or enjoy a pint and hand-rolled pizza in their fantastically up-cycled bar.

10) Based further north, check out Redemption Brewery in Tottenham and taste their range of 7 core cask ales onsite. They often have local pop-up food stalls as well so you can really make an evening of it. Redemption have borrowed over £90,000 since 2016 to support growth.

Somewhere in the middle

11) If you’re still thirsty there’s Byatt’s Brewery near Coventry who borrowed £50,000 to invest in equipment after moving to a 12 barrel brewery.

Whether you prefer cask, can, case or keg we hope you’ve enjoyed our journey across the country discovering the delights of real ale. Check back next time when we’ll be visiting even more fantastic Funding Circle borrowers.

Are you interested in lending to businesses like these?

Lend alongside over 63,000 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.

Looking to expand your business?

More than 26,000 businesses in the UK have accessed finance from Funding Circle, helping with cash flow, refurbishment, hiring staff and much more. You can check if you qualify for a business loan online in just 30 seconds.

Your August Review – Insight and Analysis

August review
Each month we bring you a column by Simon Read, a personal finance expert with extensive experience in helping people make the most of their money. Last time, Simon looked at the effect rising inflation can have on your funds.

This month, fresh from filming the BBC’s Right on the Money Simon discusses how to look after the pennies with savvy financial planning. Also included in this month’s post, find out about our historic partnership with JustEat. Dive in below.

July lending figures
Last month, you and other investors helped businesses to take new opportunities, create new jobs and drive energy into the UK economy — thank you for your continued support!

July lending

July industry news

Included in last month’s industry news, The Times interview Funding Circle borrower Yilmaz Guney, who runs a Turkish Restaurant in North London, to understand how he’s benefited from Funding Circle & JustEat’s recent tie-up.

These graphs show the most recent activity on our platform.

You’ve helped more than 8,700 small businesses access finance in the last 6 months…

 No of loans July final

Totalling over £617 million lent

 Amount of loans July

July 2017 sector breakdown

Amount lent to each sector

July sector

July 2017 regional breakdown

Amount lent to each UK region

July region

Loans defaulted last week
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. You can diversify automatically using our Autobid tool.

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 3rd August 2017.  For further information on why Funding Circle defaults loans you can read our FAQ here.

Collections and recoveries

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

Up next in September, 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

*The current estimated return is a weighted estimate of the annual return after fees and bad debts that investors could earn from lending money to businesses seeking loans today. It is calculated by taking the gross interest rate less fees and estimated bad debts that will occur in the future for each of the last 3000 loans accepted on the marketplace. The average return is weighted by loan amount, compounded and before tax. The return is updated daily. See the full calculation here.

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.

Your July Impact – Lending Impact and Borrower Stories

In this month’s post find out how your lending has helped businesses across the UK achieve their goals. First up, meet our very first Funding Circle borrower, Sustainable Direction, to hear about their latest project on the Isle of Alderney. Then, whizz to beautiful Brighton to learn how your lending helped Christine Johnston take her business, Kite, Surf & Sup Co, to the next level.

In case you missed it, here’s last month’s post, when South East Timber & Damp told us how accessing finance in just 10 days revolutionised their business back in 2015, and we met Amy Cunnington, owner of The Strings Club, who borrowed to keep up with demand for her award-winning music courses.

Dr. John Henry Looney is passionate about helping the world do more with less

Last month, Funding Circle co-founder and UK Managing Director James Meekings visited John Henry to see how his business, Sustainable Direction Ltd, had developed since taking out their first Funding Circle loan back in August 2010.

Dr. John Henry Looney from Sustainable Direction

With a Ph.D. in Physiological, Community and Statistical Ecology, John Henry has over 30 years’ experience in delivering environmental and sustainability projects for businesses and organisations. Sustainable Direction Ltd helps businesses work with the natural world in order to increase their sustainability, efficiency and ultimately their prosperity. Watch what happened when John met James in this short video.

Did you help Christine take her business to the next level?

Meet Christine Johnston, founder of Kite, Surf & Sup Co, a successful British kitesurf school and online shop in Brighton. Former windsurfing World Champion, Christine has kite surfed for nine years and holds eight national titles.

Christine Johnston, founder of Kite, Surf & Sup Co

After years of working long hours in an office, Christine knew this way of life wasn’t for her, so in 2014 she followed her dream and founded Kite, Surf & Sup Co. Two years later, the company was awarded British Kitesports Recognised School status – the highest level a kite school can reach – giving testament to the high-quality lessons that Christine and her team offer.

To upgrade the website, launch an online marketing campaign and purchase additional stock, Christine took out a loan in March 2017. Asked about her Funding Circle experience, Christine said, “The customer service I received was excellent and within a week the funds were in my account.”

Watch this space for a video about Christine and her amazing business coming soon!

Up next

At the beginning of August, we’ll be publishing ‘Your August Review – Insight and Analysis’ which will focus on the numbers and include some helpful tips to help you 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 further suggestions we’d love to hear them.

Enjoy lending, the Funding Circle team.

Your July Review – Insight and Analysis

Your July Review
If, like us, you’ve been inspired by Wimbledon, get new ideas to get active this summer with our list of 7 specialist Funding Circle borrowers who’ve flourished thanks to your lending.

Also included in this month’s post, The Telegraph looks at how our economy is dependent on the stability of small businesses. Dive in below.

June lending figures
Last month, you and other investors helped businesses to take new opportunities, create new jobs and drive energy into the UK economy — thank you for your continued support!

July investor stats

June industry News

Included in last month’s industry news, The Telegraph focuses on a recent Nesta report which shows that it’s small and medium-sized enterprises, not larger firms, that are supporting greater job creation in Britain, making up 50% of GDP and 60% of private sector employment. These businesses, like the ones you’re lending to through Funding Circle, really are the backbone of our economy.

Monthly trends
These graphs show the most recent activity on our platform.

You’ve helped more than 8,700 small businesses access finance in the last 6 months…

 June no of loans

 

Totalling over £625 million lent

June amount of loans

June 2017 sector breakdown

Amount lent to each sector
June sector

June 2017 regional breakdown

Amount lent to each UK region
June region

Loans defaulted last week
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. You can diversify automatically using our Autobid tool.

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 6th July 2017.  For further information on why Funding Circle defaults loans you can read our FAQ here.

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

Up next in July, 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

*The current estimated return is a weighted estimate of the annual return after fees and bad debts that investors could earn from lending money to businesses seeking loans today. It is calculated by taking the gross interest rate less fees and estimated bad debts that will occur in the future for each of the last 3000 loans accepted on the marketplace. The average return is weighted by loan amount, compounded and before tax. The return is updated daily. See the full calculation here.

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.

Your June Impact – Lending Impact and Borrower Stories

june investor impact
This month we’re looking at some of the success stories from recent borrowers and how your lending has helped them achieve their goals, from South East Timber & Damp to The Strings Club. Dive in below to find out more.

In case you missed last month’s post, we interviewed The Naked Marshmallow Company, and got ready for festival season with 5 camping essentials from Funding Circle borrowers.

know
You and other investors have now helped more than 25,000 UK businesses access finance to grow and create much needed jobs.

When it comes to driving the UK economy forward these small businesses pack a pretty impressive punch. According to FSB statistics SMEs make up 60% of all private sector employment and 47% of all private sector turnover in the UK.

lifesaver

Annabel and deanTo help cover their staff’s wages for two months, husband and wife team Annabelle and Dean Webster borrowed £30,000 in August 2015. They’d approached a bank first but found the application process slow and cumbersome as they needed finance fast, so they did some research and came across Funding Circle. Ten days later, the couple had secured a cash injection for their business. “It’s been a lifesaver,” said Annabelle. The couple run Kent based damp specialists South East Timber & Damp. Read the full success story in The Times.

Strings Club
Award-winning musical education company, The Strings Club, offers children aged 4-11 a range of high-quality musical experiences. Founder Amy Cunnington launched the business in 2012 with the aim to give primary school children an opportunity to discover and engage with music. Their ethos is simple: for all children to be inspired by music.

kids music

The very first Strings Club took place in London with just 6 budding students. After, a parent asked, “When’s the next one?” Since then, The Strings Club has gone from strength-to-strength and Amy has remained devoted to creating musical experiences for children.

Due to the rising popularity of courses and lessons, Amy needed help keeping up with demand. Choosing Funding Circle for support, Amy said, “The loans allowed me to expand my business, hire new staff, buy more equipment and launch a marketing campaign. Overall, the experience was very efficient and very helpful.”

We’ll be visiting Amy and the team soon to film a case study video – stay tuned.

Dream wedding
We’re well into wedding season and whether you’re organising your own or supporting family or friends with theirs we’ve put together a list of 7 unique businesses to help you get ready for the big day, from finding the perfect dress to finding the right venue.

Up next

At the beginning of July, we’ll be publishing ‘Your July Review – Insight and Analysis’ which will focus on the numbers and include some helpful tips to help you 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 further suggestions we’d love to hear them.

Enjoy lending, the Funding Circle team

Your June Review – Insight and Analysis

Your June Review
Summer has arrived, and it’s been another exciting month. We’ve been given full authorisation from the UK regulator, the Financial Conduct Authority – another step forward to offering industry-leading, tax-free returns with the Funding Circle ISA, which we plan to launch later this year. You can read the full story in this article.

Also included in this month’s post, personal finance expert Simon Read looks at what the record level of inflation in the UK could mean for you and what you can do about it. Dive in below.

May lending figures
Last month, you and other investors helped businesses to take new opportunities, create new jobs and drive energy into the UK economy — thank you for your continued support!

June review
Remember, your actual return may be higher or lower as your capital is at risk.

Monthly trends
These graphs show the most recent activity on the marketplace.

You’ve helped more than 8,500 small businesses access finance in the last 6 months…

June number of loans

Totalling over £610 million lent

June amount of loans

May 2017 sector breakdown

Amount lent to each sector

Business sectors

May 2017 regional breakdown

Amount lent to each UK region

June business regions

Making the most of your investment

May Industry News

The Times looks at a variety of different apps to help make your money work harder, from keeping track of your spending to monitoring investments. Read about this and more in our round-up of last month’s industry news.

What does rising inflation mean for your money?

With inflation in the UK at a four-year high, personal finance expert Simon Read looks at what this could mean for you and what you can do about it in his latest blog.

Loans defaulted last week
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. You can diversify automatically using our Autobid tool.

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 June 2017.  For further information on why Funding Circle defaults loans you can read our FAQ here.

Collections and recoveries

How it works

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

Up next in June, 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

*The current estimated return is a weighted estimate of the annual return after fees and bad debts that investors could earn from lending money to businesses seeking loans today. It is calculated by taking the gross interest rate less fees and estimated bad debts that will occur in the future for each of the last 3000 loans accepted on the marketplace. The average return is weighted by loan amount, compounded and before tax. The return is updated daily. See the full calculation here.

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.

Your May Investor’s Impact – Lending Impact and Borrower Stories

May investor impact
We’re looking at some of the success stories from recent borrowers and how your lending has helped them achieve their goals.

Dive in below to find out how your lending helped The Naked Marshmallow Company access finance to grow, and get ready for festival season with 5 camping essentials from Funding Circle borrowers.

In last month’s post, we interviewed husband and wife team David and Angie Cusworth who run award-winning IT services provider, Firstnet Solutions Ltd. They’re in the process of opening a new data centre in Yorkshire. Meet the couple and hear their story in this short video.

Did you know?
Last week, after battling it out in a gruelling knock out tournament, Funding Circle was crowned Ping Pong Fight Club Champions! Ping Pong Fight Club is a tour de force of inter-company ping pong rivalry, bringing together teams from technology start-ups and global brands to compete for the ultimate prize. Thank you to Pongathon for organising and congratulations to our champion, Luis, and runners up Iwoca pictured below.

Ping pong fight club

A great month for

Marshmalllow infographic

Magnificent marshmallow manufacturer set to expand

Founders Ollie Rendall and Joseph Colson dreamt of starting their own confectionary business while working together on the shop floor of Next. Working out of Ollie’s mum’s kitchen, the friends experimented with all sorts of flavours. Bubblegum and Eton Mess became favourites. The feedback from their families and colleagues was overwhelmingly positive and so The Naked Marshmallow Company was born!
Marshmallow Co

Fast forward 3 years and the business has gone from strength to strength, landing deals with well known high street stores and establishing themselves as pioneers of the gourmet marshmallow market. The pair are tirelessly focused on innovating and bringing unique and sumptuous products to the UK market. They’ve also let Ollie’s mum have her kitchen back!

’The funding will allow us to scale the business further and gear up for what’s likely to be another incredible Christmas. We’re investing in staff and machinery to enable the business to cope with volume and an ever-expanding product range. Our sincere thanks goes to all of the investors who have supported our business.’ To meet demand and buy equipment, The Naked Marshmallow Company in Lincolnshire borrowed £50,000 in May 2017. You can check out their products online here.

Camping essentials
Festival season is fast approaching, so now is the time to ensure you have all your supplies ready to go! Get outdoors with our list of 5 camping essentials, from water bottles to waterproofs, while also supporting amazing local businesses across the country.

Up next

At the beginning of June, we’ll be publishing ‘Your June Review – Insight and Analysis’ which will focus on the numbers and include some helpful tips to help you 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 further suggestions we’d love to hear them.

Enjoy lending, the Funding Circle team

Your April Impact – Lending Impact and Borrower Stories

April's investor impact

You told us that monthly and weekly updates were a little too much, so to better suit your needs we’re improving the way we talk to you on a monthly basis.

In your first Investor Impact, we’re looking at some of the success stories from recent borrowers and how your lending has helped them achieve their goals.

Did you know?

This month we hit more than 60,000 investors, big and small, lending to businesses through Funding Circle. Together your lending is having a real impact on the UK economy. Already in 2017 you’ve helped more than 5,000 businesses access much needed finance to grow and prosper. We’re going to need a pretty big venue to host everyone for our next event!

60000 people

A great month for

Firstnet create 100 new jobs in Leeds

Award winning IT services provider Firstnet Solutions Ltd was founded in 2011 to provide small businesses with the best possible IT infrastructure. Based in Leeds, husband and wife team David and Angie Cusworth are passionate about helping small businesses benefit from the same IT solutions as larger companies, but for a price that suits their needs.

Firstnet solutions

Last month, Firstnet Solutions Ltd opened a new purpose-built data centre in Yorkshire. David told us ‘we envisage that this data centre will create more than 100 new jobs, providing an important source of local employment.’

To facilitate the launch of their new data centre, Firstnet Solutions Ltd borrowed £74,480 in October 2016. David added: ‘Accessing finance through Funding Circle has helped our business achieve this success and we will look to work together more as we grow.’ Congratulations to David and the team!

We’ll be visiting David and the team soon to film a case study video – stay tuned.

April's success story

Paralympian goes for gold with a Funding Circle loan

Husband-and-wife team Peter and Linda Norfolk are well-experienced in achieving excellence. Nicknamed ‘The Quadfather’, Peter Norfolk OBE is a double paralympic gold medal and multiple Grand Slam winning wheelchair-tennis player, while Linda was Head of Physio for the Paralympic GB team at the Athens Games.

Not content with just winning medals, together they also own and run Equipment for the Physically Challenged (EPC), specialising in providing high-performance wheelchairs and powerchairs.

To hire two new members of staff, Equipment for the Physically Challenged (EPC) borrowed £30,000 in 2016. Meet this inspiring couple and hear more about their story in this short video.

5 fun ideas

The glorious summer weather is fast approaching and with more bank holidays coming up in May, it’s the perfect time to start planning. We’ve put together a list of five great ideas, from picnics to watersports and weekend getaways, to help you get outdoors and support businesses that have flourished thanks to your lending.

Up next

At the beginning of May, we’ll be publishing ‘Your May Review – Insight and Analysis’ which will focus on what’s been happening on the marketplace to help you get the most from your investment.

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

Property development lending – important update

Funding Circle’s long term goal is to become the first choice for small businesses here in the UK and across the world. By attracting thousands more businesses to the platform, we can offer you many more lending opportunities, allowing you to continue to earn an attractive, stable return. To meet this goal, we have taken the decision to focus on our core small business lending product in the UK and our other markets and will scale down new property development lending, expecting to stop all lending by mid-2018.

We are proud of the lending we have facilitated to small developers since 2014. The borrowers you have lent to have built thousands of homes and credit performance has been strong; loans have generated a 7% annual return* (as of 10th April 2017) and you have earned more than £22m in interest.

By focusing on our core product you will be able to help thousands more small businesses to access finance and grow. Over the last year you have lent record-breaking amounts, with approximately £280m lent to small business borrowers in the first three months of 2017. We expect this trend to continue.

It’s important to note that this decision is not related to credit performance of property development loans, which have outperformed expectations over the last three years and we expect this to remain the case.

We will continue to work on your behalf to service all existing property development loans. There will still be opportunities for you to lend to experienced property professionals over the next 12 months.

If you have any questions on today’s news, please get in touch at contactus@fundingcircle.com.

Enjoy lending,

The Funding Circle team

*Past performance is not a guarantee of future returns. Returns shown may change over time as some businesses may not be able to fully repay their loans.

Spring-clean your Funding Circle account

Last week marked the start of Spring—the clocks went forward, the days get longer and with a bit of luck, the weather gets warmer!

For many people, spring represents the time to have a good clean out in their homes, but it is a good opportunity to get your financial house in order as well. Your Funding Circle account is no exception, so here are four tips to help you get the most out of your investment.

1. Give yourself the best chance of earning a stable return

Our data shows that investors who diversify by lending small amounts to many businesses are more likely to earn a stable return. From time-to-time some of the businesses you lend to won’t be able to repay their loans, so lending small amounts minimises the effect this could have on your return. We recommend that you lend to at least 100 businesses, with no more than 1% of your portfolio lent to each one.

Every investor who has followed these two steps for at least a year has earned a positive return. In addition, 91% of these investors are earning at least 5% annually after fees and bad debts. More information on the benefits of diversification can be found on our statistics page. You can see the maximum percentage you have lent to any one business in the My Loan Parts section of your Summary page.

2. Make sure your funds are working hard

You can earn great returns by directly lending to businesses through Funding Circle, but your money earns nothing if it is sat idle. Each month you will receive either a principal and interest payment (the amount you lent plus the interest earned), or an interest-only payment from the businesses you lend to. Ensuring these repayments are lent out to new borrowers can maximise your earning potential.

Doing this regularly can be time consuming, however our Autobid tool will automatically lend your repayments out to new borrowers, leaving you to get on with your day!

3. Check your Autobid settings

It’s good practice to review your Autobid settings regularly to ensure they still meet your lending criteria. While logged in, the Autobid page will allow you to turn the tool on or off and manage your diversification options. The Advanced Settings will also allow you to choose which risk bands to lend to and set the gross interest rates for buying loan parts from other investors. Remember, diversification across both risk bands and businesses can help you earn a stable return.

4. Grow your portfolio for the long-term

Setting up a standing order can be done quickly and allows you to set aside a little each month towards your financial future. Making even a modest regular contribution can have a considerable long-term effect on your Funding Circle account. For example, if an investor with £10,000 in their Funding Circle account was to set up a standing for £100 a month, after 30 years they could have an account worth nearly £200,000.*

Remember, past performance is not a guarantee of future performance, and by lending to businesses your capital is at risk.

We hope you have found this useful, and if you have any questions about your account please get in touch.

Enjoy lending,

The Funding Circle team

*Returns are at our estimated annualised return of 6.9%** (as of 6th March 2017), 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 £199,084.63. Returns are calculated using a compound interest calculator.  

**This estimated return is a weighted estimate of the annual return after fees and bad debts that investors could earn from lending money to businesses seeking loans as of 6th March 2017. It is calculated by taking the gross interest rate less fees and estimated bad debts that will occur in the future for each of the last 3000 loans accepted on the marketplace. The average return is weighted by loan amount, compounded and before tax. The return is updated daily. See the full calculation here.

Read between the lines: What does the Budget mean for you?

Over the next few months we will be bringing you a regular column from Simon Read, a personal finance expert with extensive experience in helping people make the most of their money. Simon has written extensively on personal finance issues for a number of national UK newspapers. Previously he was personal finance editor at The Independent, and is currently an expert on BBC1’s Right on the Money show.

Each month Simon will cut through the jargon to help you understand what is happening in the wider financial world. This month, we caught up with him to get his reaction to last week’s Spring Budget and what it means for you.

 

We’ll be hearing regularly from Simon over the next few months, so watch this space!

Enjoy lending,

The Funding Circle team

The views expressed here belong to the author and do not represent those of Funding Circle. Funding Circle is not authorised to, and does not, provide investment, tax, legal or regulatory advice.

The information and views contained here are provided solely for informational purposes and should not be construed as legal, tax, regulatory, accounting or investment advice, or as a recommendation or an offer or invitation by Funding Circle.

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Improving the way we talk to you

You told us that monthly and weekly updates were a little too much, so to better suit your needs we’ll now be updating you fortnightly with more in-depth information.

In-depth updates, every two weeks

Up first, we’re replacing your current Weekly Lending Review with two monthly blogs, which will still contain all the information you like to read, from the amount lent to businesses each month, how to make the most of your investment, and any recent defaults. However, we’re giving it all a spring clean and adding some new features.

Each month your new round-up will be split into two:

  • Your investment update will focus on the Funding Circle marketplace, from businesses you could lend to, to how much was lent last month, some new statistics and information from our experts.
  • Your lending impact will showcase success stories from recent borrowers, how your lending has helped them achieve their goals, insight into how things work at Funding Circle, and an opportunity to hear from other investors.

These refreshed blogs will be launching later this month.

Coming soon

Quick on the heels of the blog update, you’ll soon notice a refreshed look for your newsletters. Mirroring your new marketplace round-up blogs, the newsletters will be split into two:

  • An update on your investment and a round-up of what’s going on at Funding Circle at the beginning of each month.
  • What impact your lending is having on the UK economy mid-month, and showcase some of the extraordinary business owners you’re helping.

There’s lots of other improvements still to come, but for now we hope you like the new look and feel of our communications.

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.

Digging into the data: How investor returns change over time

Whether you are new to investing, or have many years’ experience under your belt, a well-diversified Funding Circle portfolio can provide you with attractive and stable returns while helping the UK economy to grow.

To help guide you on what you can expect from your lending experience, we wanted to show how a typical investor account could perform over a five-year period.

What data did we use?

We used five full years of historical loan performance data to simulate how the returns in a typical investor’s portfolio can change over time. In our example, 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.

Performance over time

The below chart shows the annualised return, after fees and bad debt but before tax, earned by the example investor over a five year investment period. Past performance is not a guarantee of future returns, however you can see that there are typically three distinct phases involved when lending to businesses.

Phase one – initial returns are at their highest

For the first few months the investor’s annualised return is at its highest, at approximately 7.8% after the 1% annual servicing fee is deducted. This is because the investor has typically yet to experience any borrowers being unable to repay their loans.

Phase two – the impact of bad debt

We robustly assess every business you lend to, however from time-to-time some borrowers will be unable to repay their loans because something significant changes in their business. This is called bad debt. Bad debts generally start to occur approximately six months after the loans are made. This is reflected in the chart above, where our example investor’s return starts to dip after six months. This trend then naturally decreases over time as the rate at which businesses run into difficulties tends to decrease.

While it can be concerning to see bad debt on your account, it’s important to see this as a normal and expected part of lending to businesses. Bad debt is usually more concentrated within this phase of a loan’s life, so returns are unlikely to decrease for good. Learn more about bad debt and loan defaults here.

Phase three – returns stabilise as recoveries arrive

After 18 months the example investor’s return stabilises, then generally increases as recovery payments start to arrive. As of 1st February 2017, 44% of the value of loans defaulted between 2010 and 2014 has been recovered. This trend typically continues for the rest of the investment period, with the example investor ending the five year investment period having earned an annualised return of 6.5% after fees and bad debt.

It’s important to note that past performance is not a guide to future performance, and as you are lending to your own individual portfolio your actual returns may differ. However the above chart provides an indication of how groups of small business loans can perform over time.

Diversification can help you earn a stable return

Over the five year investment period, our example investor earned a stable annualised return of 6.5% after fees and bad debt. This was helped by being especially well-diversified (lending to all loans made in 2012). Diversifying by lending small amounts to many different businesses, for example by using Autobid, can also help you earn a stable return.

You can see this from the above chart. It shows the annualised return earned by 95% of investors lending for at least one year, based on the number of businesses they have lent to. The results show that 95% of investors who have lent to at least 100 businesses for at least a year have earned at least 4% per year. In addition, every investor who has followed this strategy has earned a positive return. Data is correct as of 1st December 2016.

Returns are shown after fees and bad debt but before tax. You can read more about the benefits of diversification on our statistics page.

Growing your portfolio

Each month you will receive either a monthly principal and interest (the amount you lent plus the interest earned) payment, or an interest-only payment from the businesses you lend to. The below chart shows three different scenarios which highlight the positive impact reinvesting these principal and interest repayments can have on your portfolio.

If our example investor had lent £10,000 across all loans made in 2012, but did nothing with their capital and interest repayments, they would have ended the five year investment period with £11,131. However, if they compounded their earnings by reinvesting those repayments on new loans made, for example by using Autobid, this amount would increase to £13,215.

Making a regular contribution each month can also have a considerable effect on the growth of your portfolio. Alongside reinvestment of all principal and interest repayments, if our example investor had also set up a standing order of £100 each month from January 2013 (once the initial £10,000 had been lent by the end of 2012) then by the end of the investment period their account balance would stand at a healthy £18,672.

The power of compound interest

The benefits of regular contributions and compound interest increase exponentially over time. The below chart shows the projected account balance for an investor who lends £10,000 during March 2017, in addition to creating a standing order for £100 per month. Returns are at our estimated annualised return of 6.9%* (as of 6th March 2017), are compounded monthly, and are after fees and bad debt but before tax.

“Someone’s sitting in the shade today because someone planted a tree a long time ago” – Warren Buffett

Building a six-figure portfolio may seem like a daunting goal, but by taking a long-term approach and adding a modest amount each month, you could look forward to a substantial sum in the future. You can see how your own portfolio could grow over time with this compound interest calculator.

It’s important to remember that as this is an estimate, actual returns may be higher or lower and by lending to businesses your capital is at risk.

Conclusion

Our aim at Funding Circle is for investors to earn attractive, stable returns by lending directly to small businesses. Although some bad debt is a normal and expected part of the lending experience, we hope this piece has demonstrated that keeping your account well-diversified and making regular contributions can help your portfolio grow at a stable rate over the long-term. More information on investor returns, including loan performance by year, can be found on our statistics page.

Enjoy lending,

The Funding Circle team

*This estimated return is a weighted estimate of the annual return after fees and bad debts that investors could earn from lending money to businesses seeking loans as of 6th March 2017. It is calculated by taking the gross interest rate less fees and estimated bad debts that will occur in the future for each of the last 3000 loans accepted on the marketplace. The average return is weighted by loan amount, compounded and before tax. The return is updated daily. See the full calculation here.

Not your average small business

We think small businesses are pretty special. From butchers to bakers, IT consultants to accountants, small business owners and their employees across the UK are doing extraordinary things on a daily basis.

Finch House
To open a new cafe and bakery, Finch House borrowed £125,000 back in 2015.

Small companies make big business

Small businesses aren’t actually that small. When it comes to driving the UK economy forward they pack a pretty impressive punch. Small businesses in the UK, usually defined as any business with less than 250 employees, make up half of our GDP and 60% of private sector employment. You can find more small business facts in our Small business, Big impact infographic.

Tri dosha
To create a new product range of skincare products, Tri-Dosha borrowed £21,060 from 152 investors.

Under the umbrella term small business is an incredible array of exceptional people and industries. You can meet borrowers from a range of sectors in our industry insights series, including retail, hospitality and manufacturing. As you’ll see, the average Funding Circle borrower is usually someone quite remarkable.

While we love telling individual stories, in this post we’re taking a step back and looking at the numbers behind the businesses. Not including property specialists, here’s what the average of all our Funding Circle borrowers looks like….

The significance of the number 8

Our average borrower employs 8 people — enough to make a netball team and have a super sub. To apply for a loan, businesses need to have a minimum of 2 years trading history. However, the average Funding Circle borrower has been around for much longer — 8 years. This means our average business was established in 2009, the year Matt Smith was named as the new Doctor Who, Michael Jackson died, and Barbara Windsor retired from Eastenders. It also means many started life during the worst financial crisis for a generation, so our small business owners are clearly made of stern stuff!

Mill View Plant Centre
To expand and open a coffee shop, Mill View Plant Centre borrowed £100,000 in 2015.

 Helping businesses unlock their potential

There’s a variety of reasons businesses need finance. Whether it’s simply to get a cash boost or unlock their potential we’re on hand to help. Our simple application form can be filled out in just 10 minutes.

Over half of businesses take out a loan through Funding Circle to expand, including hiring staff or opening new premises, like Andy Walker from Teasdale Motorcycles. Being able to expand his business when the time was right helped Andy triple his turnover and grow the team by 10!

Teasdale
To expand and move premises, Teasdale Motorcycles borrowed £167,000

The second most popular reason for borrowing at 34% is working capital. This might be businesses buying stock for a busy season ahead or keeping up with increasing demand like Beech’s Fine Chocolates in Preston, who’ve been manufacturing high quality gourmet chocolates in Lancashire since 1920.

Beeches chocolates
To keep up with demand, Beech’s Fine Chocolates borrowed £250,000 in 2016.

As well as covering a wide range of industries, our borrowers are also based all over the country. 24% are in the South East, 14% in Midlands and 12% in North West.

So will 2018 be the best year for small businesses?

We’ve been championing small businesses since 2010, helping more than 20,000 UK businesses access over £2 billion in finance. Now we’re planning how we can help even more in the years to come. We’ve seen businesses are seizing new growth opportunities in 2017, however, with their affinity to the number 8, 2018 could be an even better year for our Funding Circle business community. Watch this space!

Grow your business with a Funding Circle loan today

We offer unsecured loans up to £350,000, with a personal guarantee, for a range of business purposes including expansion, refurbishment, cash flow and stock purchases.

Key loan features include:

  • Rates from 4.9%
  • Loans from 6 months to 5 years
  • ​Funds in as little as 1 week​
  • No early repayment fees​ — if you pay back early you pay back less

If you’re looking for business finance, check your eligibility online in just 30 seconds.

The data in this blog is correct as of February 2017

We’re celebrating £2 billion lent to UK businesses

It’s been six and a half years since Funding Circle was launched with a big idea, to revolutionise the way small businesses access finance. This week we’re proud to announce that we’re celebrating £2 billion in lending to small UK businesses.

£2 billion lent to UK businesses including Celia's

The numbers behind £2 billion

21,000 businesses have benefited from Funding Circle finance since 2010, and an estimated 40,000 jobs have been created as a result of this. Job creation makes a real difference to the economy, showing the direct impact Funding Circle investors are having on the UK. A total of £107.5 million* has also been earned in interest by 58,000 investors, after fees and bad debt.

What it really means

Reaching £2 billion is more than just a milestone. It means investors can get a good return on their money — whether they’re saving for retirement, a new house or for a rainy day.

And it means more business owners can go on to do extraordinary things; like Celia pictured above, who used her loan to open an award-winning cafe in Somerset. Find out what other extraordinary things our borrowers have achieved after accessing finance in this short video. 

 

If you’re interested in lending to companies like Celia’s, you can earn a current estimated return of 7%* per year^. Join the 58,000 people who are already lending.

If you’re looking for business finance, our fast, hassle-free loans can be with you in just one week. You can check your eligibility in 30 seconds. 

Your actual return may be higher or lower as your capital is at risk when lending to businesses.

*Correct as of 16 February 2017

^Correct as of 23 February 2017