Your December Review – Insight and Analysis

Your December Review

Your lending has reached £3 billion in the UK! November was also a record month, with £129 million lent to small businesses in the UK.

While it’s fantastic to keep growing, the important story is the impact we can have on the economy. That’s why we’re very excited to say that in Q3 this year, for the first time more net lending (total lending minus repayments) was done through Funding Circle to small businesses in the UK than the UK’s major high-street banks combined*. Thanks to your support, we can continue to have a positive impact on the economy, helping thousands of businesses expand and achieve their ambitions.

November 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!

November Block

November highlights: launching the Made to do More campaign

At Funding Circle we celebrate the big thinkers and those who decide to get up to tackle something new. Over half of Brits (56%) think they have the skills to run their own business, but only 13% believe they’re entrepreneurial. If everyone believed they were Made to do More, we could boost the economy and ignite even more opportunities. Head to our blog to find out more about our most recent campaign.

MonthlyTrends

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…

 

Volume

Totalling over £650 million lent

Value

November 2017 sector breakdown

Amount lent to each sector

Sector

November 2017 regional breakdown

Amount lent to each UK region

Region

LoansDefaulted

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 recommend lending £2,000 or more, so you can lend to 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 30th November 2017.  For further information on why Funding Circle defaults loans you can read our FAQ here.

Collections

HowItWorks

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

Up next in December 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

*Bank of England data

**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.

How to have Christmas in Lapland in 2022

Christmas is all about tradition. From turkey and cracker jokes to arguing over who gets to be the boot in monopoly, every family has their own. While we all love our favourites, what if one year you did something different? Treat the family to a Christmas they’ll never forget.

Make regular contributions to your Funding Circle account and you could be going to Lapland to meet Santa and Rudolph in their own back yard.

Christmas

According to the Bank of England, a typical household spends over £500 extra in December, so even modest savings can make a difference. With a little planning you won’t need to get anywhere near your credit card. Contribute regularly for a longer period, and you could have the Christmas of a lifetime in a few years.

In just 5 years you could have:

Christmas in a country house

Fancy hosting your own Downton Christmas special? Put away £20 a month and you could have £4,312.57 – enough to rent a country house for your extended family. You could even hire caterers so you can sit back and relax.

Christmas in Lapland

Put aside £100 a month and you could have £10,077.80. That’s enough to treat the whole family with a trip to Lapland! Meet Father Christmas and ride a reindeer-led sleigh under the starlit sky. It will be a Christmas they’ll never forget.

Christmas in Australia

Want to swap your hat and scarves for flip-flops and swimming shorts? Transfer £200 a month and you could have £17,284.33, enough to take the family for a dream Christmas holiday in Australia. Have a beach BBQ on Christmas day, soak up the sunshine, and maybe even watch a winter Ashes series (from behind the sofa).

These figures are estimates based on lending an initial £2,000 deposit through the Balanced lending option, and regular transfers for 60 months. Please note, forecasts are not a reliable indicator of future performance and your capital is at risk.  

By keeping lending active on your account over several years, you’ll see the increasing benefit of compound returns as your repayments are continually lent out again. If you add in a little extra each month it accelerates this process even more, helping to maximise your earning potential. To get started, follow these 3 simple steps to set up your standing order today.

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

Remember, by lending to businesses 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.

The Funding Circle ISA is on its way!

We’re excited to announce that from Thursday 30th November we will start rolling out the ISA account to all current investors. This means soon you will be able to earn attractive, stable returns tax-free.

How will the ISA account work?

The Funding Circle ISA will work just like your existing Funding Circle account, while also providing you with:

  • A boost to your earning power – the interest you earn with an ISA is tax-free. As an example, if a higher rate taxpayer lends £20,000 through the Funding Circle ISA and earns a one-year return of 7.5* after fees and bad debt, their post-tax earnings after one year could increase from £900 to £1,500.
  • Flexibility the ISA account is a flexi-ISA. This means you can withdraw any available funds without affecting your annual £20,000 ISA subscription limit, providing you transfer them back in by the end of the tax year.

     

  • A simple investment experiencecreating an ISA account takes just a few minutes, and can be opened from your existing Funding Circle account using the same login details. Once opened, choose one of our two lending options and start lending.

     

  • An easy way to build a well-diversified portfoliowe recommend lending £2,000 or more, so you can spread your funds across at least 100 businesses for a more stable return. If you would like to start with less, we are introducing an initial minimum card transfer of £1,000 when opening an ISA account or a new Classic account.   

     

  • No fees to access your money – as with your existing Funding Circle account there are no fees for selling your loans

     

As part of this process we’re also renaming existing Funding Circle accounts as the Classic account. Remember, by lending to businesses your capital is at risk, while tax rules and relief can change depending on your personal circumstances.

Providing every investor with the best possible lending experience

Based on the conversations we have had with investors, we expect the ISA to be popular. To manage this interest in the fairest way, and to ensure there are enough lending opportunities on the platform for all investors to continue earning attractive, stable returns, we will be opening up the ISA Account to all current investors (those who created an account before 23rd November) in the following order:

  • Investors who are actively lending (have lent to a business since 1st May 2017)
  • Investors not actively lending but who have previously transferred in funds
  • Investors who have not previously transferred in funds
  • New investors and those who have opened a Classic account after 23rd November 2017

We will open the ISA to each group of investors in the order their account was created. We will keep you updated on our progress over the next few months.

We’ll email you when your ISA is ready to be opened

Once you’ve received your email confirming you can now open your ISA, you’ll be able to login to your account through our website and create an ISA account in a few easy steps, subject to eligibility criteria:

To help manage demand, initially you won’t be able to transfer any existing ISA subscriptions you hold to your ISA account. You will be able to transfer your Funding Circle ISA to another ISA provider, although it’s important to remember that loan parts that can’t be sold won’t be transferred and will no longer be eligible for tax-free interest.

Once all current investors have had an opportunity to create an account, we will launch the ISA to new investors. Following this, we will start to rollout the ability for you to transfer in existing ISA subscriptions.

Although you can manage both an ISA account and a Classic account using the same login, it’s important to remember they are separate accounts that will lend to a separate portfolio of loans.

Transferring loan parts from your Classic account to your ISA account

Due to regulatory restrictions, you are unable to transfer loan parts directly from your Classic account to your ISA account. However you can sell your loans quickly and easily to other investors, providing they aren’t late or experiencing any credit issues, before withdrawing your funds to a UK bank account and then transferring them to your ISA.

We’re pleased to be able to provide you for the first time with attractive, stable returns tax-free. You can find out more about the ISA account, and register your interest if you are not currently lending through Funding Circle, here. More information can also be found in our FAQs. If you have any questions please get in touch.

Enjoy lending,

The Funding Circle team

*The projected return is an estimate of the annual return, after fees and bad debts, that a diversified investor could earn by lending through the Balanced lending option as of 23rd November, 2017. You can see how the return is calculated here. Your actual return may be higher or lower, and by lending to businesses your capital is at risk.

November’s Lending Impact and Borrower Stories

.NovemberInvestorImpact

In this month’s Lending Impact, watch our latest case study video of The Strings Club, check out the article most read by our business community, and find out how you can prepare for The Ashes with five Funding Circle borrowers.

ThisMonthsTopArticle

Do you work harder than Mark Zuckerberg?

Consider yourself a hard worker? Find out how your working week stacks up against the likes of teachers, pilots, professional footballers, small business owners and corporate CEOs in our blog.

NovemberSuccessStory
StringsClub

In our latest case study video, meet Amy, Director of The Strings Club. In 2012, Amy set up the business with one simple mission: to educate and inspire children through music. Watch the video to find out how your lending has helped Amy grow and develop her business, which is now an award-winning musical education group for children aged 4-11. 

Watch The Ashes like a true Lady or Gentleman

With the start of one of sport’s greatest rivalries this Thursday, we’ve put together a list of five businesses that will help you celebrate The Ashes in a true English manner. All of these businesses were able to expand and develop thanks to your lending. Dive in here.

October’s Lending Impact and Borrower Stories

In case you missed it, here’s last month’s post, where we met Tom & Sian, the Founders of Bobbin Bikes, and listed our top five essentials to prepare for Bonfire Night.

Up next

At the beginning of December we’ll publish our Insights and Analysis blog to review November’s activity. This will  include 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 further suggestions we’d love to hear them.

Enjoy lending, the Funding Circle team

Watch The Ashes like a true Lady or Gentleman

Swap your turkey for a duck, your snowman for a nightwatchman, and make sure you’ve got your sledging boots ready to go – it’s time for The Ashes. With the start of one of sport’s greatest rivalries this Thursday, we’ve put together a list of businesses to help you celebrate in a true English manner. Each one has been able to grow or develop thanks to your lending.

Sticky pudding not a sticky wicket

Reaching the tea interval can be crucial for a batsman, and it’s an exciting moment for spectators too. We’d recommend upping your tea time credentials with something suitably scrumptious from Country Puddings in Cumbria. Lynne Mallinson, who borrowed £30,000 in 2012, started out baking from her farmhouse kitchen. Lynne has now gone on to win countless Taste Awards. As they say, the proof is in the pudding…

BritishTea

Bubbles on the boundary

If you find yourself on the boundary or even just at home chatting cricket with friends, celebrate like a true lady or gent with a glass of bubbly from Love Champagne. Established in 2007, the champagne specialists sell types for all occasions from their base in Shropshire. To expand their product range, Love Champagne have borrowed over £150,000 since 2016.

Strawberries as crisp as a new ball

A delight all year round, the great British strawberry will bring a touch of summer to your winter ashes. A traditional staple for any Englishman, they’ll help ease the pain of that inevitable top-order collapse. Stock up on your supplies from Annie’s Fruit Shop, who’ve borrowed over £240,000 across 4 loans since 2015, to create a truly delicious dish. Eton mess anyone?

BritishBulldog

Get yourself a hat-trick

Top off your cricket attire with a traditional hat from Laird Hatters, perfect for the pavilion or the stands. Whether you’re looking for a fedora or a flat cap, you’ll find something to suit your style. With rich colours and top quality British cloth, you’ll not only feel great, but you’ll most definitely stand out. To expand their range of handmade hats, Laird Hatters have borrowed £140,000 across 2 loans since 2013.

Become the next Joe Root

If all the cricket commotion has you feeling inspired, why not buy your own cricket gear from The Cornish Cricket Company? A step up from the sticks of rhubarb they practice with in Yorkshire, they sell a variety of gear and even offer coaching. To expand their business and hire more staff, The Cornish Cricket Company borrowed over £50,000 in 2017.

Are you interested in lending to businesses like these?

Lend alongside 73,000 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 30,000 businesses in the UK have accessed finance from 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.

Autumn Internationals: around the world with Funding Circle borrowers

Rugby fans of the world unite. It’s a long time since a school boy with “a fine disregard for the rules of football” picked up the ball and ran, and the global game is as exciting as ever. Now the Autumn Internationals are in full swing (low, sweet chariot….) we’ve made a list of 4 Funding Circle borrowers to celebrate the coming together of rugby playing nations from around the world. Thanks to investors like you these businesses have been able to grow and prosper.

Eat authentic Argentinian in London

Established in 2007, Buenos Aires has 5 steakhouses in London and the South East which represent Argentina with ‘passion and pride.’ The restaurant serves traditional Argentine cuisine, including meat straight from Las Pampas cooked on an authentic barbecue. They borrowed £80,000 back in 2014 to open a new site in Richmond. Everything you need to be fighting fit to watch a Pumas game!

Sushi

Taste the Orient in Newcastle

Save the airfare and sample hundreds of Japanese dishes at St Sushi in Newcastle City Centre. Dishes range from soup noodles to bento boxes and everything in between. The toon’s favourite sushi spot opened in 2006, and recently borrowed £106,000 to refurbish. Healthy and delicious, it’s tastier than a Japanese World Cup run.

Indulge in an Italian in Windsor

The Quagliozzi family  have been serving fresh and delicious dishes from their native Naples since 2009. They now have 4 restaurants for you to choose from including Viva L’Italia and the Italian Steakhouse. Book a table and talk tactics with your nearest and dearest while enjoying some superb spaghetti. More than 800 investors, like you, have helped the family business open a new Italian supermarket too!

wine

Stock up on South African Sauvignon Blanc

According to the Cambridge Wine Merchants, who borrowed over £200,000 to expand, white wines from South Africa are fast overtaking reds in terms of international respect. Stock up on wines to watch the Springboks this Autumn from one of their 7 shops in Cambridgeshire or buy online. Started in 1993, they’ve won ‘Merchant of the Year’ at the International Wine Challenge (the world’s biggest wine competition) and three times been voted the UK’s No. 1 Independent Drinks Retailer. If you’re South African, maybe get an extra bottle to help forget the defeat to Ireland.

Are you interested in lending to businesses like these?

Lend alongside 72,000 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 29,000 UK businesses have accessed finance through 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.

Digging into the data: Stress testing the businesses you lend to

At Funding Circle, our aim is to build a sustainable platform that allows you to earn attractive, stable returns by lending directly to creditworthy businesses. To help achieve this, we rigorously prepare so you can have confidence in your portfolio remaining resilient during every stage of the economic cycle. Part of these preparations include regular stress-tests of the businesses you lend to, and we wanted to share the results of our most recent test with you.

What is a stress test?

Stress tests allow organisations to estimate how their assets are likely to perform during adverse economic periods. These tests form an integral part of any prudent risk management strategy, as they allow us to simulate what could happen to your returns during tough economic conditions, such as a recession. A recession is characterised by a sustained period ‒ typically two consecutive quarters ‒ of negative GDP growth.

What did we do?

We have built on previous tests carried out on the Funding Circle loanbook, in both 2014 and 2016, to make this year’s test the most sophisticated yet. Using more than 25 years of UK insolvency and macroeconomic data, alongside 7 years of small business lending data, our experienced credit risk management team have created a bespoke stress testing model. By applying the same scenario used to stress test the UK’s leading banks to this model, we can estimate how a major recession might impact the returns earned by Funding Circle investors.

Methodology

The starting point for any stress test is to create a number of example portfolios and establish how we expect those loans to perform if the UK economy remained stable. We call this our base scenario. It’s also important to note that we aren’t stress testing any individual loans, instead looking at how overall portfolios would react under stressed conditions. We created two example portfolios:

  • Portfolio A – representing an existing investor, comprising all outstanding small business loans in the Funding Circle loanbook (as of June 2017).
  • Portfolio B – representing a new investor, comprising all small business loans made on the Funding Circle platform in the first six months of 2017.

In our base scenario we would expect Portfolio A to earn an annual return of 6.7%, and Portfolio B to earn 6.8%, after fees and bad debt but before tax.

We then simulated the effects of a recession to these two portfolios. This simulation is called a stress scenario, and it shows what could happen to returns if the UK were to enter a period of severe recession.

This year we haven’t included secured property loans within our example portfolios. This is because these loans make up an increasingly diminishing proportion of the Funding Circle loanbook (less than 10% as of June 2017). More information on how secured property loans could perform in a downturn can be found in last year’s blog.

Building the Funding Circle stress testing model

It’s important that our model accurately reflects how changing economic conditions impact the returns earned by Funding Circle investors. To do this we established a mix of key economic indicators, including inflation, unemployment and interest rates. Carefully combining the right mix and weighting of indicators allows us to estimate how small businesses react to changing conditions.

The chart below shows how closely the overall UK small business insolvency level (the number of businesses who are unable to repay their debts) tracks the insolvency level estimated by our model. This is especially true when looking at the last two major UK recessions, in 1990 and 2008.

Source: Office of National Statistics

This high degree of correlation gives us confidence that changes to our mix of economic indicators closely estimate how small businesses in the UK would react during a stressed scenario. As the Funding Circle loanbook is well-diversified across regions and sectors, and broadly reflects the overall make-up of small businesses in the UK today, we can expect that businesses you lend to will react similarly.

It’s worth noting that businesses that have been trading for at least two years, like the ones you lend to, experienced a lower than average insolvency level during the 2007/08 recession. Businesses borrowing through Funding Circle are on average 10 years old. In addition, approximately half of the businesses in the Funding Circle loanbook successfully traded through that recession, further highlighting their resilience.

Timing of a recession

It’s also important to consider the timing and duration of any stressed scenario when measuring its impact on small businesses. Defaults are not spread evenly over the life of a portfolio of loans, typically starting approximately four to six months after the loans are made, and decreasing again as the outstanding amount to repay falls. In addition, all of our small business loans amortise. This means borrowers pay back a proportion of their principal along with interest each month. The timing and duration of a recession, along with amortisation, reduces the impact of a recession on older portfolios of loans. You can see this from the illustrative graph below, showing what happens to the base default rate when you apply a recession to a portfolio of loans after 18 months:

You can see that the earlier a recession starts, the more significant impact it has on a portfolio of loans.

PRA scenario and results

We tested our example portfolios against the Prudential Regulation Authority’s (PRA) 2017 stress test scenario. This is the same test currently being undertaken by all major UK banks. The PRA scenario provides a range of macroeconomic changes designed to simulate a severe UK recession. By applying these changes to our stress testing model, we can estimate how our example portfolios would be impacted.

The chart above shows that the PRA scenario (in orange) simulates a recession more severe than experienced by small businesses in 2007/08. This recession would start immediately (June 2017), and last for 60 months. During the stressed period our model estimates that the default rate for small businesses would increase by 1.9x. In addition we have also assumed that the recovery rate on defaulted loans would reduce by 40%. The table below* shows how our two example portfolios would be impacted.

Even during this severe recession both our example portfolios remain resilient, although Portfolio B is affected slightly more due to the timing factors discussed previously.

Looking in more detail at how the returns experienced by Portfolio B change throughout the stressed period, even at the point where defaults are at their highest the projected return remains above 3.5% per year after fees and bad debt, but before tax.

When simulating a recession similar to 2007/08, the projected annual returns for our example portfolios after fees and bad debt but before tax are 5.3% for Portfolio A, and 4.9% for Portfolio B.

Validating our results

We wanted to ensure our stress testing model stands up to scrutiny, so you can have confidence that we’ve approached our work in the right way. To help us do this, we asked a leading financial consulting firm, True North Partners, to conduct an independent review of our stress testing and return forecasting models. They have confirmed that the methodology used was valid, and the results based on this methodology are an accurate representation of how your returns could be affected by an economic downturn.

Actively monitoring the economic climate

The results of our test assume that in a stressed scenario, Funding Circle would take no action to mitigate losses. However, we have a number of processes in place to help anticipate and react to worsening economic conditions. In addition to closely monitoring the performance of the loanbook, we also track external macroeconomic conditions to help us identify when a downturn may be approaching. If there were signs that conditions were worsening, we would adjust our credit assessment process to price in some of its effects of on new loans. You can read more on how we assess businesses on our blog.

Conclusion

We hope you’ve found this information useful. We’re committed to helping you earn an attractive, stable return that remains resilient even during the toughest times. You can read more about the performance of Funding Circle loans on our statistics page. If you have any questions please don’t hesitate to get in touch.

Enjoy lending,

The Funding Circle team

* GDP = Gross Domestic Product

CPI =  Consumer Price Index

BOE = Bank of England

** You can see how projected returns are calculated here.

  

 

Your November Review – Insight and Analysis

YourNovemberReview

Last month was a global record month here at Funding Circle. In the UK alone, over £120 million was lent to businesses thanks to your continued support. We’re also pleased to announce that we’ve been recognised in the LinkedIn Top Companies list for 2017. Read more here or dive into your monthly analysis below.

Each month we bring you a regular column from Simon Read, a personal finance expert with extensive experience in helping people make the most of their money. In this month’s article Simon discusses the recent rise in interest rates and how this will affect your finances.

OctoberLendingFigures

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!

InfographicBlock

 

October highlights: meet two entrepreneurs

Our co-founder and UK Managing Director, James Meekings, met the founder of Sustainable Direction, the first business to borrow through Funding Circle. Watch the video to hear two entrepreneurs discuss the highlights and challenges of running your own business.

MonthlyTrends

These graphs show the most recent activity on our platform.

You’ve helped more than 8,900 small businesses access finance in the last 6 months…

Volume

Totalling over £630 million lent

Value

October 2017 sector breakdown

Amount lent to each sector

Sector

October 2017 regional breakdown

Amount lent to each UK region

LoansDefaultedLastWeek

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 recommend lending £2,000 or more, so you can lend to 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 2nd November 2017.  For further information on why Funding Circle defaults loans you can read our FAQ here.

Collections

HowItWorks

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

Up next in November, 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.

Read between the lines: How can rising interest rates affect your finances?

We regularly bring you a column from Simon Read, a personal finance expert with extensive experience in helping people make the most of their money. In his last piece, Simon provided some pointers on planning for retirement.

The much-anticipated interest rate rise finally hit at the beginning of November. It was interesting for two main reasons.

First is the fact that it was the first rise in the Base Rate for 10 years. Do you recall what it climbed to then, back in July 2007? The base rate actually went up 0.25% to 5.75%. That seems incredible now, when we’ve experienced almost a decade of record low interest rates.

In fact it’s only been for 18 months that the rate has been at its all-time record low of 0.25%. This month’s rate increase saw it climbing back to 0.5%, where most savers and borrowers have experienced it since the Bank of England lowered it to that level to March 2009.

But the second interesting thing about the rate rise is what it tells you about your money. If you haven’t already got the message that it should be a wake-up call for you to check your finances, then now is the time to get your house in order.

It’s extremely likely that the rate increase is just the first of many over the next 12 months or so. The Bank of England will need to act again to protect Sterling ahead of Brexit and to counter rising inflation. So you should be acting to protect your interests, with interest being at the forefront of your mind.

Think about your savings. While a rise should mean better interest offered at banks and building societies, rates are still likely to remain paltry on deposit accounts. That means thinking carefully about where to stash your nest egg and making the most of alternative options such as peer-to-peer lending or, if you’re prepared for greater risk, stock market-linked investments.

What about your mortgage? If you’ve got a fixed rate loan then you won’t notice the effect of any interest rate rise until the end of your deal. But with further increases ahead, by the time you arrange a new deal, charges may be much higher.

For that reason it’s worth looking at switching sooner.

However you need to check if there are any early repayment penalties on your existing deal and do your sums carefully to ensure that switching will actually be worthwhile in the long-term, especially after taking into account any new charges you may incur.

If you have a variable rate mortgage or tracker then you will be hit by the rate rise much sooner.

By how much? The Nationwide building society reckons a 0.25% rate rise would increase monthly payments by £15 to £665 for the average variable mortgage, or an extra £180 a year. Depending on the size of your mortgage, the rate increase could cost you much more.

However much it is, it’s worth checking out fixed mortgage deals to work out if it’s worth changing. If you have a low variable rate, then you should probably stick with that for the moment. If you’re paying 3% or more, however, then you would be better off finding a lower fixed rate.

And in the months ahead keep an eye on rates.

Some lenders priced in the rate rise to their mortgage rates some weeks ahead. If you see a trend for fixed rates to start to rise, that may be the time to act, before the best low deals disappear altogether.

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.

To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, such information contained here.

If you have any questions, please speak to your professional adviser or seek independent specialist advice

How to be a star baker

Just 10 short weeks ago Paul, Prue, Noel, Sandy were joined by 12 nervous amateur bakers in the famous Bake Off tent to find out who would be crowned this year’s winner. It was also an exciting moment for Funding Circle as our latest TV advert, featuring fantastic drummer Victoria, was broadcast during the show.

Bake off

What a series it’s been. We all fell in love with Liam, congratulated Steven on his star baker hat-trick and watched Kate literally drop a clanger. But, as another year of The Great British Bake Off draws to a close and champion Sophie wanders into the sunset, we’ve put together 4 fantastic businesses who could help you create your very own showstopper this Autumn. All these businesses have been able to prosper and grow, thanks for investors like you.

House of Hackney Oven GloveOven glovekitchen textile

Treat yourself to a new apron and oven gloves

Every star baker needs a stunning set of oven gloves. Championing print, colour and texture since 2011, House of Hackney are the perfect place to find something special to bring your kitchen to life. The husband and wife team borrowed £110,000 to purchase stock and cope with demand for their products. Don’t miss the boat!

Hidden gems for creations

Are you looking to create a showstopping Christmas Cake, or simply want to add a little something extra to your bake? Look no further than online specialist Naturally Good Food for a variety of dried fruit, nuts and seeds. More than 900 investors, like you, have helped this environmentally friendly business invest in marketing and upgrade IT systems.

Brush up your skills on a weekend away

Cookery courses can be good for bakers of all standards to get started or brush up on specific techniques. Award-winning Ashburton Cookery School have borrowed £175,000 to expand their cookery school and are hosting a series of Baking Weekends in 2018. Set in beautiful Dartmoor, and covering everything from choux pastry to cakes and muffins, the course is perfect for any budding Bake Off champion.

  flower seal  lion label  Briddon Baker Sticker

Sealed with your own stamp

Every masterpiece deserves to be presented perfectly, so why not seal your packaging with a special sticker. Briddon Baker have been producing labels, seals and stickers from their base in Somerset since 1972. To purchase stock and a barcode machine, they’ve borrowed over £49,000 since 2013.

Are you interested in lending to businesses like these?

Lend alongside 72,000 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 29,000 UK businesses have accessed finance through 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.

 

October’s Lending Impact and Borrower Stories

OctoberInvestorImpact
In this month’s post, we begin with Accountancy Learning, a business introduced by one of our partners, who were able to grow and develop thanks to your lending. Next up, meet the founders of Bobbin Bikes and hear our top tips to prepare for a brilliant bonfire night.

AGreatMonthFor
At Funding Circle we have a number of partners who recommend us to their clients if they’re in need of finance, such as JustEat, and business advisors like ActionCOACH. This month we want to talk about Accountancy Learning, a specialist training provider for accountancy learning qualifications, who were referred to us through ActionCOACH.

After struggling to get a bank loan quickly enough, Accountancy Learning borrowed through Funding Circle. We believe partnerships like this will enhance the future lending opportunities for Funding Circle investors and give more businesses the opportunity to flourish. Head to our blog to read more.

OctoberSuccessStory
BobbinBikes

Meet Tom and Sian, founders of Bobbin Bicycles, in our latest case study video. The two met in Amsterdam and immediately fell in love with The Netherland’s bicycles. After noticing a gap in the UK market for everyday bikes, the pair set up Bobbin Bicycles back in 2007. The business has gone from strength to strength – even David Beckham’s daughter has been seen riding one on Instagram! Thanks to you and other investors, Bobbin Bicycles borrowed back in 2016 to purchase new stock and keep up with the influx of orders. Find out more and watch the video to hear about their passion for their business.

Preparing for bonfire night: our top five essentials

Whether you’re going to a big public display or hosting your own, we’ve put together a list of our top five products to set you up for an enjoyable and warm night under the fireworks. All these businesses have been able expand and achieve their business goals thanks to investors. Read more.

September’s Lending Impact and Borrower Stories

In case you missed it, here’s last month’s post, where we met Christine, founder of The Kite, Surf & Sup Co, and prepared for Oktoberfest with four great London breweries.

Up next

At the beginning of November, we’ll publish ‘Your October Review – Insight and Analysis’ 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 further suggestions we’d love to hear them.

Enjoy lending, the Funding Circle team

Preparing for bonfire night: our top five essentials

Remember remember the fifth of November. With bonfire night fast approaching, it’s time to make sure you’re kitted out and ready to go. Here are our top five essentials for a warm and enjoyable bonfire night with friends and family, whilst also supporting some of our businesses across the country.

1) Indulge with hot chocolate

Enjoy a sweet treat under the fireworks with Choc Affair. With a range of six delicious hot chocolate flavours, there’s something for everyone. Why not try Salted Caramel? Or luxuriate in something a little different with Raspberry and Rose? To keep up with company growth and relocate to a larger premises, Choc Affair borrowed £60,000 in 2013.

HotChocolate

2) Sip on mulled cider

Looking for something a little stronger? Ashridge Cider has the perfect winter warmer for you. With bursts of flavour that will match the colours in the sky, their mulled and spicy artisan cider will warm you up on a cold bonfire night. To keep up with anticipated growth and invest in a cider mill, Ashridge Cider have borrowed over £76,000 across two loans since 2014.

CiderApples

3) Keep your drinks piping hot with a flask

Worried about your drinks getting cold? Chilly’s Bottles keep your drinks hot for 12 hours! These reusable bottles are not only practical, but also stylish. From the Dots & Dashes to the Galaxy edition, the bottles come in a variety of different colours and patterns to accommodate all tastes. To raise funds and buy more stock, Chilly’s Bottles borrowed £20,000 in 2016.

Flask

4) Cosy up with cashmere

With the hot drinks sorted, make sure you’re dressed for the occasion with Turtle Doves cashmere accessories. With everything from cashmere hats to leg warmers, you’ll be cosy and warm from head to toe. To increase stock in preparation for their peak winter season and to grow their online presence, Turtle Doves borrowed £90,970 in 2017.

Scarves

5) Ignite the sky with fireworks

Finally, make it a night to remember with Jubilee Fireworks, the UK’s most awarded fireworks company and double winners of the Montreal International Fireworks competition. With an outstanding range of products, you’ll be able to host your very own dazzling fireworks display. To boost working capital and import more goods, Jubilee Fireworks have borrowed just over £328,000 over multiple loans with Funding Circle since 2013.

Fireworks

Are you interested in lending to businesses like these?

Lend alongside 72,000 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 29,000 UK businesses have accessed finance through 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 October Review – Insight and Analysis

Your October Review
Last month Funding Circle investors, like you, lent over £100 million to UK businesses to help them grow and develop. Dive in below for your monthly analysis.

We’re excited to be shortlisted for the Moneyfacts Consumer Awards. If you’ve received great service from Tom, Sophie, Fran or any of the Funding Circle team, please vote for us.

September 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!

October stats

September industry news

Thanks to investors, last year over £1 billion was lent to 10,000 businesses through Funding Circle, helping to create 25,000 new jobs. CEO and co-founder Samir Desai discusses our growth and future plans. Read about this and much more in last month’s Industry news.

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

You’ve helped more than 8,300 small businesses access finance in the last 6 months…
October volume of loans

Totalling over £589 million lent

October value of loans

September 2017 sector breakdown

Amount lent to each sector

October sector

September 2017 regional breakdown

Amount lent to each UK region
October 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 recommend lending £2,000 or more, so you can lend to 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 28th September 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 October, 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.

September’s Lending Impact and Borrower Stories

SeptemberInvestorImpact
In this month’s post, find out how your lending has helped businesses across the UK achieve their goals. See borrower Jim in a BBC documentary next week, watch investor Jan meet up with a kitesurfing business she lent to, and read our ideas for an amazing Oktoberfest.

A great month for
Jim, Managing Director at Channel Group, who’ll feature on Saving Lives at Sea on Tuesday next week. The BBC documentary series follows the Royal National Lifeboat Institution and the ordinary men and women who race to the rescue within minutes of a cry for help. We caught up with Jim last month to find out how Funding Circle investors, like you, have helped grow his outdoor activity business.

SeptemberSuccessStory
Watch our new video as Jan, a Funding Circle investor, heads to Worthing to meet Christine and have her first kite surfing lesson! Find out how your lending helped Christine pursue her dreams and set up The Kite, Surf & Sup Co.

Kitesurf Jan

Oktoberfest: raise a glass to these 4 glorious breweries!

Need some inspiration this Oktoberfest? Read about some great breweries which, thanks to the help of Funding Circle investors, were able to grow their business and continue offering a fantastic service for all of us to enjoy.

August’s Lending Impact and Borrower Stories

In case you missed it, here’s last month’s post, when we met husband and wife team Peter Robinson and Tracy Pound, and enjoyed the last of summer at Britain’s best beaches.

Up next

At the beginning of October, we’ll publish ‘Your October Review – Insight and Analysis’ 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 further suggestions we’d love to hear them.

Enjoy lending, the Funding Circle team

Read between the lines: pensions and retirement

Each month 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. In his last piece, Simon looked at the impact of making small savings each month.

Do you know when you’re going to retire? It may seem a long way off, but if you don’t get your finances in order, it’ll be even further away. Why? Because if you don’t have a decent nest-egg to draw on, you won’t be heading for a happy retirement – just a struggling one.

And if you think you can rely on the state to support you when you give up working, think again. At present the state pension payout is just £159.55 a week. That works out at £8,296.60 a year.

Do you think you could survive on that when you retire? Some people have to, but you won’t if you save some extra cash to see you into a reasonably wealthy retirement.

Before I suggest some ways to do that, it’s also worth pointing out that the state retirement payout age is rising. What age do you think you will qualify, bearing in mind that the age is now the same for men and women?

Yes, it did use to be 65 for men and 60 for women but that’s changed. If you’re not due to retire before November next year the qualifying age will be 65 for both genders.

By October 2020 the age climbs to 66 and it rises again to 67 by 2028, that will hit anyone who is 56 or older already.

For younger folk the age is likely to climb again to 68 from 2037 – which means anyone born after 1969 will have to wait an extra year for the state pension. And there will be continual rises in the future which could mean your kids will have to wait until age 70 or older to qualify.

What that process underlines is that it’s up to you to ensure you have enough money in retirement to ensure a decent quality of living. How you do that is up to you. But don’t be put off by the word ‘pension’ – it’s simply a savings scheme with a specific purpose, to give you some cash when you get older and stop working.

You don’t have to save for retirement into a traditional pension scheme. Indeed if you want some flexibility about when you retire there’s an argument for saving elsewhere. In fact many people fed up with the returns from traditional pension managers prefer to invest their retirement cash themselves, whether that’s in stocks and shares, property, peer-to-peer or other type of opportunity.

Saying that, if you work for a company, it has to offer you a workplace pension and that is almost certainly worth using. That’s because many companies match your own contributions as well as there being tax relief on every pound you put in. So if you’re a 40% taxpayer, your pound is matched by your company and taking account of the tax benefit, every pound is immediately worth £2.40 to your pot.

But even though that sounds great, you should be planning other ways to build up your retirement pot. Think about it this way: how much do you want to live on when you give up work? Would £30,000 do?

Earlier this year, consultants at Hymans Robertson worked out how much you’d need to save a month to achieve that target. Because of the earnings you make from compound interest, the amount climbs dramatically the older you are when you start saving.

The actuaries reckoned a 25-year-old would need to save £342 a month, while a 35-year-old would need to stash away more than £500. If you’re 45 and haven’t started saving for retirement, your figure would be more than £1,000 a month.

Sobering, isn’t it? The simple truth is that the sooner you start planning for your retirement, the better life you’ll be able to have when you give up work.

Your pensions planning checklist:

1 – Pick the age you’d like to retire

2 – Plan how much you’d like to live on when you retire

3 – Work out how much you need to save per month

  • Check your state pension age, but remember this may change if you are still young
  • If you have a company pension, find out what their contribution is and how it is managed
  • Use a pensions calculator to see what savings you need to make
  • If you need a boost, look at your investment options, and how much interest you could earn

Other resources:

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.

To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, such information contained here.

If you have any questions, please speak to your professional adviser or seek independent specialist advice.

We’ve launched your new lending experience

Last month we announced plans to launch an improved and upgraded version of our existing Autobid and Autosell lending tools, and the decision to withdraw the option to manually choose which businesses to lend to and sell.

Today these changes have come into effect, and we’re pleased to launch our new lending experience to make lending through Funding Circle simpler, better and fairer for all investors.

Your new lending options

You can now lend using one of two new lending options:

The rates shown are the projected returns, after fees and bad debts (but before tax), that a diversified investor could earn with either lending option. These rates may change over time, and your actual return may be higher or lower. Remember, by lending to businesses your capital is at risk.

Over the past four weeks, you will have received an email from us letting you know:

  • If you used Autobid – which lending option you have been transitioned to. You are now lending to businesses through your preferred option and do not need to do anything.
  • If you didn’t use Autobidhow to login to your account and select your preferred lending option. You will need to select a lending option if you would like to continue lending to businesses, although you will continue to receive repayments from your existing loan parts if you don’t select an option.

If you haven’t yet picked a lending option or would like to change which option you chose, you can do so easily by logging in now and navigating to your new Lending settings page. You can also pause your lending at anytime:

Changing your lending option will only affect any new lending on your account, and won’t affect any existing loan parts you own.

Updates to your investor account

When you next login you will also notice that we’ve made a few improvements to your investor account:

  • You can now manage your portfolio from your new Lending settings page – change your lending option, pause or resume your lending from here.
  • You can sell loan parts quickly and easilywe launched our new sell page on 21st August (including removing our sale fee), and from today the option to sell individual loans has been withdrawn. We expect liquidity to remain strong on the platform so you can access your money quickly, although this can’t be guaranteed.
  • The loan request and loan parts page have been withdrawn
  • We’ve updated some of the terms we useto reflect your new lending experience, bids are now called orders, and your Funding Circle total is now your Portfolio total.

Your new lending experience will make lending through Funding Circle simpler, better and fairer for everyone, and we hope you continue to enjoy lending through Funding Circle. If you have any questions about today’s changes, or you need any help with your account, please see our Q&A blog or get in touch.

Enjoy lending,

The Funding Circle team

Your September Review – Insight and Analysis

Your September Review

On 18th September we’re launching an exciting new lending experience to make lending to businesses through Funding Circle simpler, better and fairer for all investors. Read about the two new lending options on our blog or dive in to your monthly analysis below.

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!

August industry news

Written up in Bloomberg, Funding Circle co-founder and CEO Samir Desai met borrower By the Horns brewery to find out how the EU referendum has affected their business. Read this and more in last month’s industry news.

Monthly trends

These graphs show the most recent activity on our platform.

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

Number of loans September

Totalling over £605 million lent

Value of loans

August 2017 sector breakdown

Amount lent to each sector

August sector

August 2017 regional breakdown

Amount lent to each UK region

Region August

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 31st September 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.

 

New lending experience – your questions answered

Last week we announced some improvements to how lending and selling through Funding Circle will work, with the aim of making lending simpler, better and fairer for all investors. 

Since then, we’ve been listening to your feedback and have put together answers to the most frequent questions you’ve been asking.

Your account from 18th September

If I don’t choose a lending option, can I still use my Funding Circle account from 18th September?

If you are an Autobid user, you will automatically continue to lend to businesses from 18th September and you do not need to select a lending option.

If you do not use Autobid you will need to select a lending option in order to continue lending to businesses from 18th September. If you do not select a lending option you can continue to login to your account, view your existing portfolio and withdraw your available funds, however you will no longer lend to any more businesses.

From 18th September, you will need to accept the new Terms and Conditions in order to continue using your Funding Circle account.

Will I be able to pause lending, or will it always be turned on?

You will be able to pause your lending at anytime. Your repayments will not be lent to more businesses until you turn lending back on.

What happens to my existing loan parts?

The changes we are making will only affect lending to businesses from 18th September, and will not affect any existing loan parts you own. You will continue to receive repayments from existing loan parts from 18th September, even if you do not choose a lending option.

How can I change my lending option?

  • Before 18th September: If you are not being transferred to a lending option (for example if you don’t currently use Autobid) you will be able to select an option the next time you log into your Funding Circle account. You can change your lending option by navigating to the Autobid page and following the link.
  • On and after 18th September: you will be able to change your lending option at anytime. Your choice of lending option will only affect any new lending, and will not change existing loan parts you own.

Selling loan parts

How will the secondary market work?

  • Before 18th September: On 21st August we launched a sell page that simplifies how investors buy and sell loan parts. You can sell your loan parts by going to the sell page and telling us how much you’d like to withdraw. We’ll list a selection of your loan parts for you approximate to that value. Once they’ve sold, the loan parts will appear as available funds which you can transfer to a nominated bank account. We have also removed the 0.25% fee to sell your loan parts. You will be able to sell individual loan parts and set a premium or discount up until 18th September.
  • On and after 18th September: Any remaining loan parts listed for sale at a premium or discount will be delisted and the option to sell loan parts individually will be withdrawn. All loan parts listed from 18th September will be sold at par value. All investors will buy existing loan parts sold by other investors, based on their lending preference.

Can I still buy or sell individual loan parts?

From 18th September you will no longer be able to buy individual loan parts from other investors, or sell individual loan parts to other investors.

Will I be able to sell loan parts that are larger than £100?

Yes. The new tool will only split your lending to a single business into smaller parts of £100 when lending to new businesses. You may still sell loan parts larger than £100 to other investors, providing they are no larger than 0.5% of the buyer’s portfolio.

Your new lending options

Will I be well-diversified by lending 0.5% of my portfolio to each business?

Since 2010, every investor who has lent no more than 1% of their portfolio to a single business for at least a year has made a positive return, with 92% earning at least 5% a year after fees and bad debt. This increases to 93% when an investor lends no more than 0.5% of their portfolio each time.

There are no guarantees with any form of investment, but lending 0.5% to each business will provide you with a very well-diversified portfolio. You can see this from the graph below, which shows the annualised return earned by 95% of investors lending for at least one year, by the number of businesses lent to.

Data is correct as of 1st July, and past performance is not a guarantee of future returns. Remember, by lending to businesses your capital is at risk.

Will I be able to choose the loan term of the business I lend to?

Our aim is for you to build a well-diversified portfolio and have the best chance of earning a stable return by lending to a wide range of businesses. Over the past seven years we have built up a large database of historical loan performance and have found there to be no significant difference in how businesses perform by loan term. In addition, if you do want to access your money early you can sell your loan parts to other investors and there is no cost to do so.

Will I now be investing in a fund?

No. By lending through Funding Circle you always lend directly to your own individual portfolio of businesses and no investor account is the same. This will not change as you will continue to enter into loan contracts directly with each borrower you lend to, so you are only exposed to the performance of those borrowers. This is very different to a fund where your money would be pooled together with all other investors and the return investors receive depends on the overall performance of the fund.

Funding Circle ISA

When are you launching a Funding Circle ISA?

We will be launching the Funding Circle ISA this tax year. Given we expect the Funding Circle ISA to be popular, we plan to launch it at a time to suit demand from both investors and borrowers. This will allow us to manage liquidity on the platform and help investors to earn attractive, stable returns.

Can I transfer my existing loan parts into the Funding Circle ISA?

No. For regulatory reasons, you will not be able to transfer any existing loan parts you own into a Funding Circle ISA. You will need to withdraw funds to your nominated bank account, before transferring them into your Funding Circle ISA.

If you can’t see your question here, you can find more information about your new lending experience in our FAQ.

Enjoy lending,

The Funding Circle team

August’s Lending Impact and Borrower Stories

August Investor Impact
In this month’s post, find out how your lending has helped businesses across the UK achieve their goals. First up, meet husband and wife team Peter Robinson and Tracy Pound who borrowed this month. Then we’re headed to the beautiful Exmoor National Park to meet adventure activities specialist the Channel Group and finally we’re enjoying the last of summer at Britain’s best beaches. Dive in below.

A great month for rebrand
Peter RobinsonThis month we had the pleasure of meeting Peter Robinson, who runs award-winning insurance broker business Prizm Solutions in Staffordshire. The business was formed in 2006 when Peter saw an opportunity to radically change the way insurance was transacted.

Today, they have countless recommendations of how they’ve helped clients with their insurance needs; from motor insurance, to liability insurance and employee benefits to name a few. Prizm has also been recognised by their peers, being shortlisted for Community Broker of the Year at the UK Broker Awards 2017.

During our conversation, Peter told us that his wife, Tracy Pound who runs IT training and consultancy specialist Maximity, has been shortlisted for Business Role Model of the Year in the Women in IT awards 2017. On behalf of the Funding Circle community we’d like to wish Peter and Tracy the best of luck in their upcoming awards!

You and other investors helped Prizm Solutions borrow over £150,000 this month to acquire another business and they’ll be increasing their team to 16 people.

August's success story
Jim Channel Training

Outdoor enthusiast goes for growth

The Channel Group was started in 2012, when Managing Director Jim Whittaker and his friend Darren quit their day jobs to found a business with a simple mission: to get more people out and about in the beautiful outdoors.

Five years on, Jim and his team now offer a diverse range of adventurous activities, outdoor education and personal development programmes on the edge of the beautiful Exmoor National Park. You and other investors helped the Channel Group keep up with high demand for their courses and progress with their growth plans.  In this short video meet Jim and hear his story.

Support local this August
Make the most of the final few weeks of summer and head to one of our Britain’s beautiful beaches. From stunning north-east Scotland to the Cornish coast, join our tour of six local businesses where you can go for a bite to eat, have a refreshing drink or stay the night in these top spots.

July’s Lending Impact and Borrower Stories

In case you missed it, here’s last month’s post, when we caught with our first ever borrower on the Isle of Alderney and met business owner Christine Johnson in Brighton to find out how investors, like you, have helped take her business to the next level.

Up next

At the beginning of September, we’ll be publishing ‘Your September 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